Navigate legal complexities and stay compliant while mobilising a global workforce.
Oct 18, 2023
Navigating the Legal Implications of Managing a Global Workforce
Today’s employees expect the flexibility to ‘work from anywhere’ after years of workplace changes. However, mobilising a global workforce is far from straightforward, as international teams must navigate complex legal, tax and immigration implications to avoid compliance issues.
EY data shows that nine out of ten employees want flexibility in where and when they work. Companies must act swiftly and decisively around global mobility law to make this a reality against globally disparate regulations and legislative changes.
In this article, we’ll explore the legal implications of global workforce management and the key to staying compliant while growing a globally distributed workforce.
The Importance of Understanding Legal Requirements
Failure to comply with local legal requirements can have catastrophic effects on a company’s growth. These effects may include the risk of substantial fines – and the associated reputational damage – and/or disqualification from applying for or fulfilling contracts. Failure to comply with immigration requirements can even lead to the deportation of key personnel.
Therefore it is imperative businesses know where they stand on legal requirements and have simple but effective processes and partners in place to ensure total compliance, including on payments and paperwork.
These processes and partners can deliver benefits beyond simply complying with global mobility law, not least saving your team time and your business money.
International Employment Laws to Consider
Compliance with global mobility law requires an in-depth knowledge of specific rules and regulations relating to immigration, data protection, employment law (payroll, working hours and discrimination), and intellectual property (patents, trademarks, and copyrights) across various jurisdictions.
Cooperating with multiple countries’ global mobility laws and legislations can seem complex, but the right technology partnerships can simplify and streamline the process.
Working Hours and Overtime Laws
Each country has different rules regulating a standard work week, and international working hours for the average employee can vary wildly, from 29.5 hours for the average Austrian to 52.6 hours for a worker based in the United Arab Emirates. Monitoring and managing the working hours of your global workforce is vital to ensuring compliance.
Laws also apply to overtime. Most countries have legislative or collective agreements governing overtime pay, with provisions for maximum overtime allowances. Total working time limits vary from country to country, with many European countries like Italy, Sweden and Germany capping overtime allowance.
If you allow your global workforce to exceed legal working hours and overtime limits, you run the risk of fines, penalties, and even criminal sanctions. This costly headache can be easily avoided by overlaying employee activity data with relevant working hours and overtime legislation.
Minimum Wage Legislation
The cost of living, economic development and the labour market differ significantly by country. However, minimum wages are used by most nations, varying from a unique rate applied to the whole country to more complex systems with differing rates depending on factors such as sector, geography, and enterprise size. Operating in a country with no legal minimum wage requirement doesn’t let employers off the hook. These countries may still have wage minimums set through collective bargaining contracts.
Since each country uses different logic for setting its minimum wage, language can be unclear, even for professionals. For example, the UK’s national minimum wage has been rebranded as the National Living Wage (not to be confused with the independently set Real Living Wage).
HR and payroll experts must keep up to speed, nonetheless, because in many countries, it’s against the law for an employer to pay less than the minimum wage. Employees are entitled to take legal action, which can result in the costly resolution of back-dated non-payment. Accurate records should be kept for this reason; HR and business leaders must also track minimum wage increases that can impact bottom-line profitability.
Employee Benefits and Entitlements
Minimum levels of employee benefits and entitlements vary by region. Modern businesses also often go beyond mandatory benefits required by local law, offering additional perks to attract and retain international employees. 78% of employees agree that benefits are significant in their decision to accept a job, according to research by EBRI. However, an employee perks package should always be developed on top of a clear understanding of the legal baseline.
For example, a condition of residence and employment in some countries is a subscription to a minimum compulsory health insurance plan, which may be salary deducted. An employer may also seek to offer private health and medical insurance across the board to its global workforce. Monitoring local healthcare laws in various regions against the globally expanding costs of providing medical treatment (which is expected to rise by 12.3% in 2023, according to People Management) allows employers to review and adjust additional benefits accordingly.
Paid leave is another employee benefit that has many different laws across jurisdictions. Annual leave, sick leave, maternity/paternity, parental leave, and bereavement leave vary significantly by country.
Of course, healthcare and paid leave are just two possible benefits for many. Others include pension contributions, flexible work schedules, professional development and even gym memberships.
Complying with global mobility laws around benefits and entitlements in the countries you operate in is non-negotiable. It also provides a useful baseline for adding additional benefit packages so that you can provide pay and benefits parity across countries or in the case of an international assignment.
Discrimination and Equal Opportunity Laws
The global workplace has become more diverse in the last few decades due to many countries introducing regulations governing equality and diversity. However, it’s worth noting that different territories experience varying challenges and successes.
In the UK, for example, employers are legally bound by the Equality Act 2010. Many British companies also understand diversity presents an opportunity to increase skills and engage a wider range of views.
There are some barriers to progress on equality. In gender equality, for example, just 12 countries have legal gender parity and over 50 countries maintain laws that discriminate on the basis of sex. Appreciating how regional laws affect your global workforce steers your equality and diversity strategy in the right direction while allowing you to protect your business from legal action and reputational damage.
The Role of Technology in Ensuring Compliance
Compliance issues often arise in global mobility programmes because tracking all the moving parts of global mobility law is difficult. Keeping up with multiple employment laws and cross-border tax obligations whilst meeting the needs of individual employees makes sense strategically but can prove tricky operationally.
Technology alleviates compliance pressures by allowing teams to track and analyse worker and compliance data, acting as a single source of truth that cuts out time, costs, and the risk of human error. Historically, multiple vendors were involved in ensuring a compliant global mobility programme. Today, powerful AI and cloud-based compliance management systems play a role in centralising the resources of global mobility management programmes.
Compliance Management Systems
A compliance management system is a helpful centralised hub for accessing the resources required to deliver a compliant global mobility management programme. Up-to-date compliance data is available at the click of a button, allowing users to make quick decisions on cross-border projects, which are all tracked and managed in the same place.
In the past, global mobility teams would have accessed information from various channels and vendors, inputting it into their plan manually. But when compliance information must be continually reviewed and updated, manual updates are laborious, prone to human error and potentially costly when issues occur.
Compliance management systems take international teams to the next level by removing the need to firefight against administrative duties, freeing them to focus on strategic global mobility risk management or talent recruitment instead.
A perfect compliance management system is Centuro Global’s Centuro Connect. The platform offers instant access to up-to-date information and solutions without the expensive cost or time delay in moving your employees or business to new markets. Its features include;
- Case Management – Manage your expansion plans and project status instantly.
- Concierge Service – Our Concierge team helps you through complex processes or queries.
- Cost of Living Calculator – Quickly compare cost of living information across countries, areas and cities in seconds.
- Expert Connect – Local experts from around the world at your fingertips.
- Custom Dashboard – Initiate a case and track all your respective cases and data in one easy-to-use dashboard.
- Global Blueprints – We make starting up in more than one market easy. Our blueprints are available for over 170 countries.
Blockchain for Secure Documentation
Sensitive documents relating to individuals should always be handled securely. But how do you store, organise, and manage them when you need secure access to thousands of files? Blockchain is the obvious choice for maintaining documents securely and safely.
The decentralised nature of blockchain, which is a distributed database that maintains a growing list of ‘blocks’ (records), makes it simple to retrieve documents while removing the risk of accidental deletion or misplaced files – records are connected in a way that’s impossible to tamper with.
Securely and transparently handling essential legal documents is integral to staying compliant while streamlining global mobility processes.
Case Studies: Companies Navigating Legal Complexities Successfully
Many businesses today are already expanding globally with a high degree of legal compliance. A couple of examples of businesses navigating legal complexities successfully are:
- A-Gas, a prominent supplier of refrigerants and environmental services, sought to acquire an established refrigerant company in the UK (therefore solidifying its presence in the competitive UK market). The acquisition process involved intricate legal and immigration considerations, including the sourcing and timely submission of relevant visa documents, to ensure employees entering the UK were compliant.
- SNC-Lavalin – Saudi, a renowned engineering and construction firm, aimed to establish a subsidiary in the UK to expand its international operations. Saudi and UK business registration is vastly different. Still, SNC-Lavalin successfully negotiated registration, tax laws, labour laws and data protection standards to register successfully and capitalise on the European market’s potential.
In both cases, these businesses succeeded by partnering with a global mobility expert. This partnership kept their operations compliant while enabling growth.
Best Practices for Managing Legal Risks
As the businesses above demonstrate, common legal risks, such as breach of contract, employment law claims, underreported taxes, and immigration breaches, are largely avoided with best practices in place. Considerations when managing legal risks are:
- Be proactive. Develop a comprehensive global mobility risk management framework that mitigates regulatory changes and challenges.
- Build a risk mindset into your strategy and operations. Encourage your leaders to build risk adherence into everything they do.
- Value local expertise. Understand local laws and legislation by working with on-the-ground experts.
- Refine your information flows. Regularly review data and amend policies and contracts to reflect current legislation.
- Underpin your programme with accurate data. Use a single source of truth for all your data, using integrated technology to reduce multiple touchpoints.
- Train employees on compliance. Educate your employees on compliance procedures and policies.
In a global workforce management programme, your people are your best asset. Get your team’s buy-in when it comes to managing legal risks, and lean on best-in-class global mobility partners to save time and money.
Regular Legal Audits
Regular legal audits are vital to keeping a global mobility risk management programme on track. Companies should:
- Conduct regular risk assessments.
- Implement efficient policies and procedures.
- Provide employee training.
- Monitor compliance.
Regulations around the world change constantly, and identifying and preparing for changes to local regulations has an ongoing impact on short and long-term employee mobility.
It’s simpler to conduct assessments in the regions where your workforce operates, understanding who in your organisation will be affected by local legislative or environmental changes (and what can be done to support them) if you have technology that will alert you to changing regulations.
Partnering with Experts
If you have multiple territories to account for, the evolving nature of legal compliance can seem like a never-ending obstacle course. That’s why strategy-focused global workforce management teams often outsource their mobility requirements to partners with on-the-ground HR, legal, tax, accounting, and immigration expertise.
An expert partner helps to get global mobility programmes across the line in multiple locations by delivering up-to-the-minute details in easy-to-access technology platforms, allowing leaders to focus on the strategy behind cross-border projects, entity setup and employee relocation.
Imagine how much easier it would be to establish a compliant presence in multiple countries if you had a centralised case management system that tracks all cases and manages all assignments in one place. That’s what an expert partner provides.
Centuro Global has years of expertise and knowledge in strategically partnering with companies to refine global mobility programmes. Learn more about our bespoke solution today.
Of all the challenges associated with global mobility, employment law and compliance are some of the most complex to navigate. An evolving legal landscape containing hundreds of differing local regulations makes tracking and managing people, legislation, and data challenging. However, this can be done compliantly by drawing in all the available complex data and reverse-engineering simple processes and policies.
It’s down to business leaders to enable the quick deployment of people – without the risk of legal penalties, reputational damage, and financial losses from non-compliance – by making the case for a simple, centrally managed system backed by local knowledge. Are you ready to make the case?
For personalised advice on navigating international employment laws and compliance, contact us.