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You’re invited to our live Annual California Employer Update on December 14 in Millbrae, California to discuss the adventures ahead for California employers.

Join us as we sit around the proverbial campfire to discuss the most significant legal developments in 2017 and how to prepare for 2018.

Covered topics will include:

  • New wage and hour updates
  • California’s new salary history ban and what it means for recruiting
  • New transgender protections and guidelines for preventing workplace harassment
  • California’s new statewide ban-the-box law
  • Immigration changes affecting California employers
  • And much more!

We will also share a few international trends, such as:

  • The spread of global gender pay gap reporting regulations
  • New data privacy regulations in the EU effective in 2018
  • Pitfalls to avoid in outsourcing projects
  • What to know about protecting company trade secrets globally

See the invite and RSVP HERE!

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The Tax Cuts and Jobs Act proposes sweeping changes to the taxation of executive compensation and employee benefits. It aims to be effective as of January 1, 2018 – which means limited time to react.

This week our friends over at the Compensation Connection published a helpful alert regarding the proposed tax reform bill.

Click HERE to read a detailed outline of the key proposed changes.

Contact your Baker McKenzie lawyer for more details and stay tuned!

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On October 12, 2017, California Governor Jerry Brown signed a landmark new law barring California employers — and their agents — from inquiring about applicants’ previous salaries and benefits.

The law goes into effect on Jan. 1, 2018.

Here are 3 steps to take now to prepare:

  1. Remove all salary questions from hiring forms (including job applications, candidate questionnaires and background check forms)
  2. Update interviewing and negotiating policies and procedures
  3. Train recruiting, hiring managers and interviewers on the new law to include instructions regarding the importance of ensuring that candidates are not pressured (even indirectly) to disclose salary history and how to respond to requests for pay scale information

Read more here and reach out to your Baker McKenzie lawyer for more details.

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Slavery and human trafficking has become a priority for many governments around the world.

The UK Government passed the Modern Slavery Act 2015 to simplify and bring up to date the criminal law in relation to modern slavery and human trafficking. The Act (section 54) imposes a new obligation on UK businesses to publish an annual slavery and human trafficking statement setting out the steps it has taken to ensure slavery and human trafficking is not taking place in any part of its business or supply chain.

What businesses does this impact?

The requirement applies to all businesses that supply goods or services in the UK provided that it has an annual turnover of £36m. It does not need to be a UK registered entity. The turnover does not need to be UK turnover, provided it supplies some goods or services in the UK. The turnover of subsidiary entities (but not parent entities) is included in assessing whether the threshold is met. There is no requirement for the organisation to have a minimum number of employees, a minimum balance sheet total, or to be incorporated (or formed, if it is a partnership) in the UK. As a result, these rules will have extraterritorial effect and apply to a much wider range of organisations than just large companies under the UK Companies Act.

For more, read the informative alert (here) authored by our colleagues in London, Monica Kurnatowska and John Evason.

Reach out to your Baker McKenzie lawyer for the steps businesses should be taking to ensure compliance with the Modern Slavery Act,  as well measures to consider taking with both suppliers and within your own business to address issues of modern slavery.

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In July 2017, amid political turmoil and protests by the opposition and the labor unions, president Michel Temer sanctioned a new law implementing the controversial labor reform in Brazil.

Some of the law’s most significant changes impacting US multinationals include:

  • Labor Rights Negotiation: Agreements negotiated between companies and employees may override statutory requirements relating to labor rights such as: vacation usage, work shift, flextime arrangements, reduced meal breaks and remote work, among other points. However, some labor protections, such as FGTS deposits, minimum wage, 13th salary and vacation pay cannot be subject to negotiation.
  • Waivers and Releases of Labor Rights: Employees with college degrees who receive monthly salaries greater than or equal to twice the limit of benefits from the National Social Security Institute (INSS) will be able to negotiate valid release agreements and waive labor rights.
  • Outsourcing: It is now possible to hire service companies to provide services and activities even for those that fall within the company’s core business.
  • Remote Work: The parties to a remote work agreement shall agree on the use of equipment and payment of related business expenses (such as for electricity and internet access). The employee does not have to keep time records.
  • Dismissal for cause: Possibilities of discharge for cause by the employer are expanded beyond the situations under the current rules. Among these are loss of qualification necessary to the employee’s profession, such as a driving license, if caused by the employee’s intentional misconduct.
  • Termination by Mutual Agreement: Termination can be agreed between the parties, in which case severance will be reduced.
  • Mass layoffs: Collective terminations, also known as mass layoffs, will no longer need the agreement of the labor union. The same rules applicable to individual terminations shall apply to collective terminations.
  • Litigation: Employees will have to pay for court costs relating to any pleas that later are deemed groundless. Requirements for filing labor lawsuits are stricter and it will be easier to impose penalties against plaintiffs for litigating in bad faith by filing frivolous suits.

We thank our friend Leticia Ribeiro, a partner at Trench, Rossi e Watanabe (a Brazilian law firm with a cooperation agreement with Baker McKenzie), for her valuable contributions to this post. And, for more information, please contact your Baker McKenzie lawyer.

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The TLDR on the new UK pay gap reporting regs:

New Requirements

  • From April 2017, employers with at least 250 employees (which may include some contractors) in the UK will need to publish details of their gender pay gap on an annual basis.
  • The gender pay gap reflects the difference between what women are paid, on average, compared to what men are paid, looking across the company as a whole.
  • Employers must publish six different metrics, including the differences in hourly pay and bonuses between men and women and the proportion of women in each pay quartile.
  • The information will be publicly available and is likely to be considered by employees, potential job applicants, the media and in some cases by clients / customers.
  • Employers will have until April 4, 2018 to publish their first set of data, but it must be based on a “snapshot” of pay data as at April 5, 2017.

New Challenges

  • CALCULATION – The rules are complex and not always clear. Being compliant may require employers to make judgment calls on tricky issues such as whether particular payments or employees are in scope. Employers need to find practical solutions but also want to ensure their calculation approach and their pay gap figures are in line with their peers.
  • PRESENTATION – The government is encouraging employers to explain the causes of their gender pay gap and what they are doing about it. Employers will need to consider carefully what to include in this narrative to best manage multiple stakeholders.
  • CLOSING THE GAP – The Regulations shine a light on the challenges for employers seeking to close the gender pay gap. Considering existing diversity and inclusion initiatives, and considering how to achieve further progress, is a good first step.
  • CLAIMS & AUDITS – The new requirements may prompt more equal pay claims, either because employees misinterpret the figures or because they expose areas of potential discrimination. Some employers are therefore taking a more in-depth look at the discrimination and equal pay risks within their business.

Multinationals Take Note!

  • Outside of the US, legislation either mandating or encouraging gender pay gap reporting is on an uptick (see e.g. Germany and Switzerland)
  • Unfortunately, a one-size-fits-all approach is not a solution. The legal requirements, types of data involved and comparator groups all vary by jurisdiction which means you may end up with very favorable numbers in one country, and something substantially different in another.

Contact your Baker McKenzie lawyer to prepare an action plan to address key potential risks and meet your compliance obligations globally.

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If your plan year coincides with the calendar year, the time to review your commission / bonus compensation plans is NOW.

We’re getting down to the wire. Friendly reminder that if you hope to make changes to 2018 commission / bonus compensation plans, act fast!

Recall that in most jurisdictions OUS, changes to terms and conditions of employment cannot be made unilaterally and require consent. For this reason, best practice is to keep commission plan details separate and apart from employment agreements. Because once the details are in, the practical effect is that you can’t just change the plan without employee consent.

For more on commission and comp plans, contact your Baker McKenzie lawyer.

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Life starts all over again when it gets crisp in the fall.
– F. Scott Fitzgerald

After two years of blogging to our friends in the Lone Star state, we are excited to announce that we are embracing the opportunity for new beginnings this fall. We are turning over a new leaf and expanding our blog to reach all US employers, including those managing operations outside of the US.

The new Employer Report provides legal updates and practical insights about the latest labor and employment issues affecting US multinationals, at both the domestic AND global level.

The original site will be redirected, so no action necessary on your part (other than to spread the word!). The Employer Report will be updated regularly by our US Employment and Compensation lawyers with insights covering a wide range of labor and employment topics, including wage and hour updates, new compliance obligations outside the US, trends concerning the gender pay gap, and much more!

We appreciate your continued support and hope you enjoy the Employer Report.

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Last Wednesday, the United States Court of Appeals for the Seventh Circuit held that the Americans With Disabilities Act (“ADA”) does not require employers to provide additional unpaid leave as an accommodation to employees who have expended their Family and Medical Leave Act (“FMLA”) leave. Although the Seventh Circuit’s ruling upheld its prior decision in Byrne v. Avon Productions Inc., the decision is significant because it directly contradicts the Equal Employment Opportunity Commission (“EEOC”)’s position that granting additional, long-term unpaid leave to employees is a reasonable accommodation under the ADA. Continue Reading Seventh Circuit Holds that the ADA Does Not Require Additional Unpaid Leave After FMLA Leave Is Exhausted