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A Primer on International Labor and Employment Issues

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A Primer on International Labor and Employment Issues The Global Employer: A Primer On International Labor 2016 and Employment Issues The Global Employer: A Primer On International Labor and Employment Issues 2016 © Baker McKenzie 2016 All rights reserved. This publication is copyright. Apart from any fair dealing for the purpose of private study or research permitted under applicable copyright legislation, no part may be reproduced or transmitted by any process or means without the prior permission of the editors. Save where otherwise indicated, law and practice are stated in this volume as of December 2016. IMPORTANT DISCLAIMER: The material in this volume is of the nature of general comment only and is not intended to be a comprehensive exposition of all potential issues arising in the contest of a cross-border or multi- jurisdictional transaction, nor of the law relating to such issues. It is not offered as advice on any particular matter and should not be taken as such. Baker McKenzie, the editors and the contributing authors disclaim all liability to any person in respect of anything done and the consequences of anything done or permitted to be done or omitted to be done wholly or partly in reliance upon the whole or part of this volume. Before action is taken or decision not to act is made, specific legal advice should be taken in light of the relevant circumstances and no reliance should be placed on the statements made or documents reproduced in this volume. Baker McKenzie International is a Swiss Verein with member law firms around the world. In accordance with the common terminology used in professional service organizations, reference to a "partner" means a person who is a partner, or equivalent, in such a law firm. Similarly, reference to an "office" means an office of any such law firm. Editor's Note For today's employers, managing a global workforce requires complying with local labor and employment laws in multiple jurisdictions, staying abreast of rapidly changing regulations, handling the growing demands of labor unions and works councils, and moving talent quickly across borders. It also means developing strategies to retain high-potential employees, especially during reorganizations and spinoffs. To achieve these objectives, it's essential for employers to stay up-to-date on the latest employment trends in areas such as workforce restructuring, global compensation practices, and integrating global operations following a multinational acquisition. The challenges of expanding your global footprint cannot be underestimated. Do you phase in your operations, and if so where first? How do you structure your overseas operations? Will you - can you? - relocate employees or only hire locally? How should you structure your employment relationships? What are the immigration, tax and social security implications? What are the local employment and labor requirements and restraints? How do those sit with your global strategy? What are the local cultural norms? How can you maximize the potential of your new workforce? And what if things don't work out - what is your exit plan? Before establishing a non-US presence, or adding new territories to your company's portfolio, or making significant employment and labor decisions in relation to existing international workforces, it is vital to consider the employment-related issues. The key to success is to plan ahead and understand not only the legal requirements, but also, and most importantly, the local cultural norms. Only then can real benefits be derived from the international operations. This Primer is a collection of articles written by attorneys in our North America Compensation & Employment Law Practice Group over recent months and years to help multinationals navigate some of the labor and employment challenges unique to cross-border operations. The subject matter of the articles reflects some of our clients' most common questions. The articles - like the expertise of the North America Compensation & Employment Law Practice Group - cover the life span of international expansion from set-up to exit, and some of the more complex and significant issues that can arise along the way. To learn more about how we may be able to assist you and your organization, please visit our website at www.bakermckenzie.com/employment or reach out to any of the contributing authors. Contributing Baker McKenzie Authors Narendra Acharya Erik Christenson +1 312 861 2840 +1 415 984 3844 narendra.acharya erik.christenson @bakermckenzie.com @bakermckenzie.com Louise Balsan Nadege Dallais +1 650 856 5581 +33 1 44 17 53 60 louise.balsan nadege.dallais @bakermckenzie.com @bakermckenzie.com Anne Batter Douglas Darch +1 202 835 6171 +1 312 861 8933 anne.batter douglas.darch @bakermckenzie.com @bakermckenzie.com Denise Broussal Joseph Deng +33 1 44 17 53 93 +1 650 251 5937 denise.broussal joseph.deng @bakermckenzie.com @bakermckenzie.com Christopher Burkett Valerie H. Diamond +1 416 865 6995 +1 415 576 3086 christopher.burkett valerie.diamond @bakermckenzie.com @bakermckenzie.com Caroline Burnett Jeff Dybdahl +1 415 591 3270 +1 312 861 4207 caroline.burnett jeff.dybdahl @bakermckenzie.com @bakermckenzie.com Susan F. Eandi Benjamin Ho +1 650 856 5554 +1 415 591 3248 susan.eandi benjamin.ho @bakermckenzie.com @bakermckenzie.com David W. Ellis Jonathan Isaacs +1 312 861 3072 +852 2846 1968 david.ellis jonathan.isaacs @bakermckenzie.com @bakermckenzie.com Elizabeth Ebersole Georgia Jolink +1 312 861 8272 +1 713 427 5040 elizabeth.ebersole georgia.jolink @bakermckenzie.com @bakermckenzie.com Jordan A. Faykus Sinead M. Kelly +1 713 427 5050 +1 415 591 3241 jordan.faykus sinead.kelly @bakermckenzie.com @bakermckenzie.com Denise M. Glagau Barbara Klementz +1 415 576 3067 +1 415 591 3211 denise.glagau barbara.klementz @bakermckenzie.com @bakermckenzie.com Jeremy Hann Barbara J. Mantegani +1 416 865 2322 +1 202 835 6166 jeremy.hann barbara.mantegani @bakermckenzie.com @bakermckenzie.com Emily P. Harbison Angela McIsaac +1 713 427 5045 +1 415 984 3817 emily.harbison angela.mcisaac @bakermckenzie.com @bakermckenzie.com T. Scott McMillen Carole Spink +1 312 861 8292 +1 (312) 861 8065 scott.mcmillen carole.spink @bakermckenzie.com @bakermckenzie.com Scott M. Nelson Ryan H. Vann +1 713 427 5027 +1 312 861 2588 scott.nelson ryan.vann @bakermckenzie.com @bakermckenzie.com David Serwer Kerry Weinger +1 (312) 861-7990 +1 312 861 2785 david.serwer kerry.weinger @bakermckenzie.com @bakermckenzie.com Aimee Soodan +1 (312) 861 7515 aimee.soodan @bakermckenzie.com The Global Employer: A Primer on International Labor and Employment Issues Table of Contents Part I: Expanding Your Global Footprint ....................................... 1 Planning for Global Expansion ...................................................... 2 Boots on the Ground: Employment Considerations for Companies Expanding Abroad ...................................................... 6 Part II: Managing a Multinational Workforce .............................. 17 HR Fundamentals......................................................................... 18 Global Employment Handbooks: One Size Does Not Fit All .......................................................................................... 18 Top Global & Domestic Employment Issues in an Uncertain Economy ............................................................... 24 Managing an International Workforce Through Global Employment Policies ............................................................. 77 The Essentials of Managing Global Compensation Practices................................................................................. 81 Singing the Siren Song of Unlimited Vacation Policies ........ 86 How to ‘Get Away' with Global Criminal Background Checks ................................................................................... 95 A Closer Look at OUS Employment Laws ................................ 101 Avoiding Employment Traps in China ................................ 101 Labor Day Origins: Examining US and Canada Labor Laws .................................................................................... 117 4 Major Differences Between US and French Employment Laws ............................................................... 124 Mobile Employees ..................................................................... 132 The Accidental Expat: A Guideline for Employers on Employee Cross-Border Travel ........................................... 132 When Employees Cross Borders – Does the Compensation Deduction Cross With Them? ..................... 137 Baker McKenzie I The Global Employer: A Primer on International Labor and Employment Issues What To Do When Your Board Goes Global...................... 151 Striker Provides Guidance Relevant to Structuring International Employee Secondments ................................. 156 Global Immigration ............................................................. 170 Compliance and Human Rights ................................................. 175 Anti-Bribery Compliance Traps in International Framework Agreements ...................................................... 175 Reporting Obligations Imposed by FATCA on Foreign Retirement Plans and U.S. Participants in Such Plans ........ 181 Equity Considerations ................................................................ 200 Securing a Tax Deduction Globally for Equity Awards ...... 200 Taxation of Dividends and Dividend Equivalents Paid on Stock Awards Granted by U.S. Corporations ...................... 212 The Global Side of Option
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