With January in full swing and your first new year’s resolution already broken, here’s one goal you can keep: stay abreast of developments to get ahead of the curve, beginning with the top 14 trends impacting multinational employers in 2014.
1. Global expansion to new jurisdictions
As the global economy revives, companies will continue expanding globally. According to surveys, 76 percent of US CFOs reported overseas activity in 2013. While many companies going global still initiate expansion through standard jurisdictions such as the UK, the trend is to venture beyond. In Latin America, Brazil is still a hot spot, but Colombia, Mexico and Costa Rica are catching up. Africa and the Middle East are growing markets, while companies are expanding into South East Asia. In Africa, where financial indicators have more than tripled since 2000, Nigeria is earmarked to become the continent’s biggest economy. Overall, we predict more focus on the MINTs – Mexico, Indonesia, Nigeria and Turke – and CIVETS – Colombia, Indonesia, Vietnam, Egypt, Turkey and South Africa. These jurisdictions bring opportunities and challenges, which will be increasingly important for multinational employers to understand.
2. Greater competition for talent
The global competition for talent is increasing. Surveys rank Switzerland and Singapore at the top of the worldwide talent competitiveness indices (that is, the ability to attract and incubate talent) – the US ranks 9th. For the global employer, recruiting worldwide talent means investing in and retaining employees while complying with applicable laws and while granting financial incentives, such as equity grants.
3. Stronger need to protect the company
Companies looking to hire globally mobile talent need to be alive to the risks and opportunities as well as the potential for complex cross-border litigation involving those workers. They also need to protect confidential information and trade secretshttp://viewer.zmags.com/publication/453f6ae3, drafting strong post-termination non-competes (globally and locally) and assuring proper assignment of IP. Case law and legislation in this area are constantly evolving – one example is the new Korean Invention Promotions Act.
4. Extra focus on alternative workers
Around the globe, contingent employment is on the rise, and the desire for flexible workforces will only increase in 2014. In turn, alternative work arrangements – from agency workers and independent contractors to part-timers and temps – are being scrutinized more by governments, enforcement agencies, unions and international labor organizations. The EU Agency Worker Directive, for instance, is now in full swing. On July 1, 2013, China implemented new regulations limiting use of dispatch employees, which is anticipated to profoundly impact many employers in China.
5. A more high-tech, mobile office
With the advent of the high-tech mobile world, today’s workplace bears little similarity to those of even the recent past. Issues emanating from Bring Your Own Device options, cloud computing, work-from-home arrangements and process automation will become increasingly important for global employers. Labor and employment as well as data privacy laws can impose limitations that may be unfamiliar.
6. Expanding employee data privacy protection
Data privacy remains an issue of great public interest and one of growing concern to global employers regarding corporate activities, obligations to third parties and employees’ data. Stringent data privacy rules initially originated in the EU, which is still revising its data privacy rules. Other jurisdictions have implemented major data privacy laws that affect how companies conduct business and treat employees. These include the Malaysian Personal Data Protection Law (effective November 15, 2013), Singapore’s Personal Data Protection Act (effective January 2, 2013), Colombia’s Data Protection Law 1581 (effective June 27, 2013) and Mexico’s Privacy Guidelines (effective April 17, 2013).
7. Updates to social security, benefits and pension regulations
With today’s demographic comes an increasing need to update social security contributions or increase workers’ retirement age. Japan, Ireland and Spain have recently amended their retirement age, and China’s new administration recently announced plans to do the same. We expect this trend to continue across the globe. Companies need to remain alert of any changes, since – as in Japan – there may be obligations to amend policies and procedures to address new rules.
8. New discrimination, harassment and gender equality laws
Legislation addressing discrimination, harassment and gender equity increased in 2013. This included:
New stringent anti-bullying rules in Australia and British Colombia
India’s new sexual harassment rules
The rise in power-harassment/bullying claims in Japan
The EU’s proposed directive for gender equity on boards of directors
Argentina’s gender identity law
To ensure compliance, employers need to review and refresh their policies and procedures, carefully train employees and increase their efforts for workplace equity.
9. Eyes on wage and hour and misclassification
In the US, wage and hour enforcement is always a hot topic. But employees’ awareness of these concerns, and of their employer’s obligations to them, is growing worldwide. Case law is keeping up as well, with a very recent Korean Supreme Court case finding that certain bonuses need to be included in the regular wages used to determine overtime pay, resulting in a possible billion-dollar additional cost of doing business in Korea.
10. Ongoing workforce evaluation and restructuring
While there appear to be fewer large-scale redundancies, companies continue to evaluate and restructure their workforces. Internationally, due to the lack of at-will employment, this can pose fresh challenges to those unfamiliar with overseas jurisdictions. However, 2013 saw a relaxation of some of the more stringent rules to extend greater flexibility to employers and revive flagging economies. Recent developments include the reduction of the consultation period for large-scale collective layoffs in the UK and changes to the collective redundancy rules in France.
11. More cross-border litigation and investigations
Overseas employees appear to be more aware of possible co-employment claims against US parent companies. US employers aiming to counter this trend and avoid non-US workers lodging claims in the US must strike a careful balance between global policies and local management. Cross-border investigations and litigation trigger yet another set of challenges, including the international limitations of the attorney-client privilege.
12. Global focus on anti-corruption and whistleblowing
Regulatory authorities in many jurisdictions are more aggressively enforcing global companies’ compliance with anti-corruption and corporate misconduct laws. Some countries, such as the UK, are considering introducing financial incentives to encourage employees to expose corporate wrongdoing. Robust compliance programs are more important to reduce employment legal risk. This challenge grows when multiple jurisdictions are involved, bringing into play myriad laws, regulatory requirements and distinct cultural approaches across mature and developing markets.
13. Increasingly global M&As
Few mergers and acquisitions are solely domestic these days; the trend indicates more cross-border M&A activity. With that comes an ever-growing need for companies to understand the labor and employment requirements for global transactions, as well as relevant developments and trends, such as the UK’s proposed TUPE reform.
14. Increasingly global unions
Unions are increasingly global as well, and global campaigns are on the forefront of union activity. A global employer must understand whether it could be a target of such activity or demands from a local union, works council or employee representative, and carefully plan its global labor strategy.
Click here to view DLA Piper's corresponding Infographic.