Hiring internationally comes with a variety of legal, compliance, and benefit-based hurdles that drastically differ from what in-house counsel see in the U.S.
By Nancy Cremins, General Counsel, Globalization Partners
If you are an in-house lawyer for a company that has employees across various states, you are familiar (in some instances, painfully familiar) with the challenges of staying informed of and complying with the various employment laws at the federal, state, and, with increasing regularity, city level that regulate your workforce.
Just when you think you have mastered the relevant legal provisions, your company hires in a new state, or Massachusetts passes the Equal Pay Law, or Washington, D.C. enacts paid parental leave, or yet another state or city adopts new paid sick leave or minimum wage standards.
Depending on the size of your workforce and geographic distribution, these compliance efforts can take a considerable amount of time and resources. Once your company starts to expand globally, your employment compliance challenges expand exponentially.
Not only must you learn a new country’s employment laws, but you also need to fully grasp the local laws of the town or county in which your new employee(s) will potentially work.
The model agreements that you use across your U.S. workforce will not fit for your global team. In fact, depending on the country, the benefit expectations of your global employees will be very different from your U.S. team.
Can you provide health care benefits? Are health care benefits even an expectation? What is the mandatory parental leave in the country of hire? And what will you do if an international hire doesn’t work out?
Global employment comes with infinite questions and if done incorrectly, with expensive penalties. To mitigate these challenges and avoid legal penalties, an organization’s general counsel/in-house legal team should keep this simple concept in mind so that managing the process becomes as simple and efficient as possible.
When hiring internationally, the legal team must work in lockstep with HR.
For example, legal needs to know if HR is looking to make an international hire so the legal team can start issue spotting and obtain a local expert before an offer has been extended. Now, depending on the size of a company and the company’s structure, the HR team’s practice may be to not involve legal in the hiring process.
The HR team needs to be informed and reminded that if your company is considering an international hire there must be open and consistent communication with the legal team.
To maximize effectiveness and mitigate errors, a clear process should be in place so that HR recognizes when the legal team’s counsel is necessary. Establishing a process in advance will ensure that the relevant stakeholders are on the same page and it will decrease confusion throughout the process. Companies have been forced to pay significant sums in severance pay because HR agreed to grant more seniority to a new hire in an employment contract without the knowledge that such seniority automatically increased the severance pay entitlement. If the legal team was consulted in the contract/ negotiations phase, such expenses could have been mitigated or avoided altogether.
There are three other key steps to consider to avoid legal headaches. If you know you’ll need help with an international expansion give us a call at 617-340-3023 or send us an email.