Labor laws have evolved a lot over the years, and whether it’s laws protecting the individual worker, or collective laws that protect a whole workforce, labor laws are one area that any business needs to be on top of.
Treat this article as your cheat sheet for the different kinds of labor laws you should be aware of, and how you can stay compliant with labor laws in a growing international workforce.
What Kinds of Labor Laws Are There?
Let’s look at the two main kinds of labor laws, individual and collective.
Individual labor laws
For individuals, labor laws include any legal issues that relate to the individual worker and their employer. Before there were labor laws in place, the employer had control over how they compensated and treated their workforce, and could enforce 16 hour working days, unfair payment for services, or discriminate against who they wanted to hire. With the evolution of labor laws, this is no longer the case. Individual labor laws include:
- Terms of employment: When you start working with an employee, a consultant or a contractor, you need to have certain laws in mind. For example, is the candidate authorized to work in that region? Is the compensation fair, and are the health and safety standards safe for them to complete their role? What is the agreement around overtime, and how will you end the relationship keeping in mind fair dismissal or notice periods? Make sure you’re familiar with the rules for your region, as well as abroad, as you may hire candidates remotely and need to align with different labor laws, too. For example, in Greece, 43 weeks maternity leave is offered, which includes a mandatory 8 weeks before birth, while a US based company may be expecting 6-12 weeks maximum, starting from birth.
- Discrimination laws: As well as domestic labor laws around discrimination, the International Labor Organization lays out standards for equality of opportunity and anti-discrimination. These dictate laws such as the Equal Remuneration Convention, stating that women and men must be paid the same wages for the same work, and the Discrimination Convention, which calls out “any distinction, exclusion or preference made on the basis of race, colour, sex, religion, political opinion, national extraction or social origin, which has the effect of nullifying or impairing equality of opportunity or treatment in employment or occupation”.
- Benefits: These vary widely from one country to another, for example in the US, health insurance is mandatory for businesses with over 50 full-time employees or equivalent, while in the UK, as there is a National Health Service, health insurance is not a common benefit, let alone a mandated one. Benefits such as pension contributions, sick days, parental leave and more all need to be checked closely depending on where your workers reside. In some countries, it’s also common to offer gym memberships, food vouchers, lunch stipends, and more, and while these are rarely laws, they will certainly be cultural conventions which could ensure you attract top talent.
- Minimum wage: Minimum wage is another area which is different depending on the location. Australia has the highest minimum wage in the world, at $21.38/hour, while Cuba is currently offering the lowest. Even within the United States, minimum wages are not always set at a Federal level, which means you can have States which share borders and yet have vastly different expectations around pay. If employees are exempt from the FLSA, in Georgia they can be paid as little as $5.15 per hour. In contrast, Washington DC has a State minimum wage of $16.10.
Collective labor laws
In some cases, labor laws protect a group, offering collective bargaining or action that an individual could not achieve. For example, in the United States, the NLRA offers US workers the right to organize unions, and then bargain as a group for changes to wages, working hours, improvement to health and safety conditions, or other benefits, and without being discriminated against for this action.
Trade unions and other kinds of unions are independent of any employer, and instead usually function for specific kinds of workers. For example, nurses may have a different union from doctors, and there will usually be local unions as well as national or regional unions in different countries.
How Can Companies Remain Compliant with International Labor Laws?
In today’s complex working landscape, it’s normal for businesses to have a wide range of different workers, from full-time and part-time employees, to consultants, agency workers, independent contractors and more. Since the remote working revolution, it’s likely that these workers will be distributed around the globe, whether that’s in multiple offices or sites, or working from home.
Being compliant with international labor laws is no easy task. That’s why it’s become common for businesses to work with a strategic partner who can support them in managing different kinds of workers compliantly, often with automation or technology in place to make it even simpler. Here are a few examples of how a partner can make all the difference.
When hiring abroad: Using an Employer of Record can make it easier to hit the ground running when hiring in a new location. The EoR will have in-depth knowledge of the new region, and be able to help you sidestep labor laws like having a local Board of Directors or incorporating locally before you can enter into commerce and contracts.
When consolidating data: If your workforce is siloed in different regions, you can’t look at your business as one cohesive whole. Technology can support you in bringing all of your data into a single stream, including normalizing different currencies, languages and expectations into one, even where you need to treat employees and other workers differently as they live and work in disparate locations. Data-driven decision making becomes simple, and human error is taken out of the equation.
When working with freelancers: Misclassification is a real risk when taking on freelancers, and you need to make sure you’re working compliantly from day one. Each region will have its own labor laws for compliantly working with freelancers, and compliance regulations around misclassification change all the time. A Freelancer Management System like Fiverr Enterprise can offer support with hiring freelancers, onboarding them with all the right documentation, acting as an extra layer of checks for compliance, managing their workload, and even paying them across borders.
Look out for the following must-haves in a Freelancer Management System:
- Hiring: The ability to compliantly find and hire pre-vetted talent that is within budget and suits specific requirements
- Onboarding: Automated workflows, aligning collection of tax, compliance and legal documents with local labor laws, and ensuring streamlined system access
- Management: Visibility and control over budgets and tasks, so you’re never held back waiting for approvals, and if labor laws change, you’re two steps ahead.
- Payments: Automatic payments on approval, simplifying different regions, currencies, or payment methods down to one.
Want to see how Fiverr Enterprise FMS works for yourself? Get in touch to schedule a demo.