New Minimum Wage Requirements
Many countries have for the first time passed, or are considering, a minimum wage. Germany has passed a minimum wage law effective Jan. 1, 2015. The new German minimum wage will affect all companies, even if they already pay their staff well over the hourly minimum, because the statutory minimum is a component part of every wage paid.
Paying late or not at all constitutes an administrative offense which
may carry a fine of up to EUR 500,000. The legislation will impose significant record-keeping obligations, including not only lower wage workers, but also what we call in the United States "white collar exempt" employees. Failure to comply with the new legislation could also render a company criminally liable
for not remitting social insurance contributions and/or withholding
payment for work performed and usury. If the company contracts work or
services to subcontractors, it is also responsible for ensuring that the
subcontractor and its subcontractors pay the statutory minimum wage.
Restrictions on Incentive Compensation
The United States and Europe have imposed variations on "say on pay" rules, requiring non-binding shareholder approval of compensation for senior executives of publicly traded corporations
and for compensation packages payable in connection with a change of
control. Many of these rules have direct and indirect international
application and effect.
The European Parliament is regulating certain investment firms to ensure financial viability,
including restrictions on bonus payments by credit institutions and
investment firms. Implementation of these restrictions has created challenges for multinationals that face conflicting rules regarding compensation of key executives, and create competitive challenges
for multinational talent across jurisdictions-a European bank that is
limited by CRD IV's bonus restrictions may find itself unable to recruit
in the United States, where American banks do not have these
restrictions.
The Volkswagen Organization Drive
Volkswagen
has engaged with Works Councils-organizations of workers that represent
employees in various employment disputes and negotiations in almost all overseas jurisdictions where it manufactures cars.
In Europe, there exist three distinct levels of formal employee representation. First, trade unions
can represent employees. These generally act on a sectoral basis, for
all workers in an industry, including workers who are not in an
organization that has a union. Their operations are governed by local
countries' laws.
Second, local works councils
receive information from a company's management, and consult with them
on a range of issues. Again, the operation of works councils is governed
by local countries' laws.
Finally, European Union law has established "European Works Councils".
The law applies to any company employing over 1,000 Europeans with at
least 150 employees in each of two Member States. A request by 100
employees from two countries or an initiative by the employer triggers
the process of creating a new European Works Council. These receive
information from employers and consult regarding company-specific issues
that apply Europe-wide.
In
Tennessee, the United Auto Workers (UAW) claimed a union was necessary
for the formation of a works council. Representatives of the Global
Works Council supported the recognition efforts of the UAW through a secret ballot election process recognized in the United States. Nonetheless, the UAW lost the election.
Efforts persist, however, for the UAW and another employee organization, the American Council of Employees, to achieve some kind of "representation" rights
among the VW employees. This "experiment" is receiving worldwide
attention as VW attempts to blend corporate culture and a European
system of representation with a legal system in the United States that,
arguably, does not embrace such concepts, while keeping in mind the
paramount desires of its U.S. employees in the process.
Some believe that this initiative marks a major turning point for unions, certainly in the U.S., and perhaps throughout the world. Clearly it presents unique challenges,
not confined to VW, but for many other worldwide enterprises subject to
an extremely complex array of laws, cultures, brand identity issues,
attack points, political considerations and practical strategies as
organizations attempt to achieve their economic goals.
Data Privacy
The European Union (EU) likely will approve broad changes in its data protection framework
by the end of 2015. The Safe Harbor (a streamlined process for U.S.
companies to comply with the EU Directives on the protection of personal
data) likely will change in some respects in 2015. Further, many
countries have recently enacted data protection regimes and there likely will be new guidance, case law, and/or enforcement actions in 2015.
Article source: http://www.littler.com/publication-press/press/top-10-international-employment-law-issues-2015
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