The term multinational company (MNC) is no longer limited to big enterprises, as technology and remote work have leveled the playing field for emerging organizations to compete for business, talent, and opportunity at scale.
Regardless of size, MNCs are grappling with a dynamic, unpredictable employment law landscape characterized by rapid legislative changes, geopolitical uncertainty, and technological disruptions, particularly AI. These challenges stem from divergent national regulations, the acceleration of remote work, and heightened emphasis on worker rights, transparency, data protection, and ethical practices.
Compliance is complicated and growing more complex
As we enter 2026, the global regulatory landscape is being defined by the long-tail effects of the historic 2024 election cycle. In 2024, an estimated 49% of the world's population, from 64 countries and the European Union, headed to the polls to vote in major elections. Time magazine called 2024 “The Ultimate Election Year", with the results likely to prove consequential for years to come.
Elections always bring new legislative change, regardless of the outcome. Countries like the United States, India, Mexico, and the European Union, as well as emerging economies, are now seeing the results of their votes manifest in political shifts that have ushered in a wave of new legislation and labor laws, heightening the complexity of global compliance and risk to multinational businesses.
Some of the notable labor-related legislation examples that are quickly making headlines since that election cycle include:
The United States: The passage of the One Big Beautiful Bill Act (OBBA) has introduced a variety of significant compliance hurdles for U.S. employers, including new tax treatment rules for overtime pay and tip income, with nuanced definitions of "qualified" overtime and tip-eligible roles.
Plus, expanded workplace immigration audits and I-9 compliance reviews mean employers face heightened risks of audits, fines, and labor shortages. Not to mention the new executive order impacting the H-1 B visa, raising costs, barriers, and risks to accessing foreign talent.
Mexico: legislated a new worker category for app-based platform workers (e.g., Uber), granting eligible gig workers treatment more like that of a regular employee. Including access to social security, minimum-wage protections, profit-sharing, union rights, and other core benefits.
Applicable to any organization that uses platform labor or contracts with platform-based service providers to reassess worker classification, benefit eligibility, payroll and social security obligations, and related reporting requirements. Next, the Mexican government plans to gradually reduce the standard workweek from 48 to 40 hours by January 2030, signaling significant changes in compliance on the horizon.
European Union: employers in member states are already racing to implement the EU Pay Transparency Directive by June 2026. Additionally, the Platform Workers Directive by December 2026, which introduces enhanced protections for gig economy workers, including rights to fair pay and algorithmic transparency, raises further classification risk and expands compliance obligations across payroll, social security, data governance, and worker rights.
Argentina: recent reforms have deregulated employment laws to foster flexibility, marking a significant pivot in labor policy. Similarly, countries like Brazil and Chile have bolstered laws on equal pay and harassment. Illustrating a fragmented regulatory environment, compounded by geopolitical tensions, AI governance, data sovereignty, and climate-linked labor mandates, turning global workforce management into a minefield riddled with risks.
This surge in regulatory complexity underscores why global EOR services are evolving from mere administrative tools into strategic growth engines and organizational agility levers. As multinational companies navigate this landscape, global EOR providers can derisk strategic plans, enabling businesses to expand, acquire talent, and innovate while avoiding compliance pitfalls.
Global EOR's Role in Derisking Strategy
At its core and through its past, global EOR has always been about compliance and risk management. Global EOR is also a business partner and shield against the escalating risks of operating globally. Increasingly, embedded in the HR strategy, enabling workforce agility, and mitigating risks. Soon, it will be fully enabled by AI and predictive insights.
By embedding EOR's compliance expertise and insights into the fabric of workforce strategies, global EOR becomes a vehicle for compliant employment and an engine for growth. Empowering businesses with the infrastructure (people, process, tech, entities) and insights to shield strategic plans from unforeseen legal risk or the organization's lack of experience with the targeted location and opportunity.
Global EOR ultimately fosters organizational agility by enabling companies to access talent anywhere, anytime, and on demand, compliantly. More importantly, to engage that talent in the flow of business, shielding it from the risks associated with operating in new locations, and accelerate strategic outcomes by aligning human capital with business priorities.
Global EOR Will Act as a Compliance Layer in the Future
Looking ahead, global EOR is poised to mature into an intelligent, adaptive compliance layer that orbits the business and its workforce needs. Leveraging AI and predictive analytics, it will shift from reactive risk mitigation to proactive anticipation of regulatory changes, talent needs, and strategic opportunities.
Global EOR of the future will leverage AI to monitor global legislation, flag updates on emerging laws or labor requirements before they impact operations and strategy. This compliance layer will model scenarios for key decisions, such as entering a new market or integrating the workforce post-merger, providing prescriptive insights to avoid missteps.
Pay and money movement will evolve with continuous earnings calculations, automated processing and tax management, and instant cross-currency settlements and digital money movement. All powered, orchestrated, and enabled by AI.
As a data fabric, global EOR will weave disparate HR, payroll, compliance, and performance data into a unified view. This hyper-connected intelligence will unlock hidden insights, predict talent shortages and compliance risks, and enable fluid workforce models in which talent is sourced and deployed on demand. For multinational organizations, this means simulating mergers, acquisitions, and divestitures with AI-driven precision, derisking decisions, and amplifying strategic growth.
Global EOR insights with agentic AI could monitor, interpret, and surface legislative changes. With approval, update employment contracts, job descriptions, or payroll and HR systems, and test and confirm compliance-related changes.
Global EOR is becoming a cornerstone of business resilience and agility. By acting as this forward-looking compliance layer, it not only navigates the minefield but also clears the path for sustainable growth.
About the author
Pete A. Tiliakos
Principal Analyst, Strategic Advisor, & Chief Payroll Champion at Payroll Influences LLC
Pete leverages unique market expertise from over 30 years in HR and payroll technology, services, and transformation. Pete is globally recognized for his extensive knowledge, coverage, research, and strategic advisory of leading and emerging solution providers across the payroll, employer of record services, payments, and HCM technology marketplaces. Both practitioners and providers widely leverage his research and perspectives as he is a regular contributor to industry associations, podcasts, publications, and events and the co-host of the HR and Payroll 2.0 podcast, and host of The Source podcast by DailyPay.
