Last week a group of our favorite European colleagues joined us in the Bay Area for a few special client visits. Even if you weren’t in the room, we’ll share a few key headlines here. (And, here’s link to listen in to our recent webinar: Global Employment Law Fastpass — Spotlight on Europe!)
From practical tips on the best ways to implement employee redundancies to the expected impact of the recently-passed EU Directive on Pay Transparency, here’s five things to know:
1. The EU Whistleblowing Directive (WBD) Requires Private Employers with 50 or More Workers to Establish a Local, Entity Level Reporting Hotline
The WBD was supposed to be implemented by the EU’s 27 member states by December 2021, but we are still waiting for around 8 EU member states to do so. For example, France, Belgium and Austria have transposed the WBD, Germany has not but is close. Spanish companies with at least 250 employees have until June 13, 2023 to comply. (For more, read our alert here.)
While legislation is still awaited in a number of jurisdictions, we are now in a much better position to see the challenges the WBD poses for global employers. . . and there are several.
- It can be tricky to implement the new requirement for a local channel alongside a centralized group level reporting system (e.g., through a global “hotline”). Under the WBD, employers are not prevented from maintaining and encouraging the use of their central reporting hotline; however, now, entities with more than 50 workers, must establish a local, entity level, channel. This means employers who meet the threshold will need to establish local entity level reporting systems alongside existing global channels.
- The second key challenge is where companies have multiple entities in one jurisdiction, whether one internal reporting channel can be established at a country level or whether the channel must be established in each entity. The implementing legislation in some countries is unclear on this point but, where the requirement is for entity level channels, this raises challenges for companies which have multiple entities within a jurisdiction but only one HR or Legal function which operates across multiple entities.
Fortunately, we have a multijurisdictional analysis matrix covering five key areas of WBD compliance at a local level available at a fixed fee per jurisdiction so that companies operating in the EU can wrap their arms around this new requirement. The matrix answers questions about the Directive’s scope and implementation requirements for internal procedures, protection of whistleblowers and data privacy issues. Our experienced team of lawyers can then assist with implementing the changes, as well as with training, communications and more.
2. The EU Pay Transparency Directive is Coming and as the Kids Say, It’s Extra
Last month the European Parliament formally adopted the Pay Transparency Directive and its provisions are likely to enter into force in most EU member states in 2026. It’s sort of a big deal, requiring significant attention and touching on many aspects of the employment lifecycle (read our detailed alert here).
A preview: there are pre-employment pay transparency requirements, and broad worker and representative rights to workforce pay information. The impact may be more muted in countries like France where works councils already have access to pay data, though the access will become much more granular under the Directive.