Can My Company Have the Same HR Policies in Multiple Countries?

Recently a client called Terese M. Connolly, who advises companies with workforces in multiple countries, with a request.

“They have operations and entities in 15 different countries, and their new HR person was updating all of their policies globally,” says Connolly, an international labor and employment partner with Barnes & Thornburg in Chicago. “They wanted to see if they could be more aligned in what they offer. For example, they were looking at their pregnancy and maternity leave in the U.S. and looking at their overseas policies to figure out what to offer.”

As you can imagine, that’s not a simple task. In the UK, for example, someone on maternity leave can seek as much as 52 weeks, whereas in the U.S., it’s more commonly 12 weeks of time off.

Countries Vary in Many Aspects of Employment Law

But parental leave is far from the only area of the employment relationship with potential complications. There are several conflicting rules from country to country regarding:

• Remuneration
• Work hours
• Overtime exemptions
• Part-time and full-time benefits
• Health care benefits
• Vacation entitlements
• Severance pay

And much more. Without consulting a legal professional with experience in international employment, you might create some serious problems. “Especially now, as much as people try, I don’t think that there’s a one-size-fits-all,” says Connolly.

Legal Differences Make It Hard To Create Universal Employee Handbook Policies

Another common desire from employers is to create an employee handbook that applies worldwide.

“But even within the United States, things fluctuate,” Connolly says. “There used to be a time when you could do it more easily because federal law was really dictating employment. But right now, state laws are. When you look at sick leave, federal law has not caught up to implement something that would be as generous as some states.

“Or take privacy, for example. California was the first state with the California Consumer Privacy Act that everyone’s got to get up to speed on now. So the answer to, ‘Can we do this?’ is, ‘It depends, and it might be difficult.’”

Example 1: Termination of Employment

The rules about firing employees is a classic example.

“Termination is very different outside the United States, where they don’t have employment-at-will,” Connolly says. “There are some jurisdictions where the details that need to be followed in a termination, if you miss one step, you can completely invalidate the termination—when a decision can be made, who needs to be consulted, what notice needs to be provided and sometimes even mailed.”

The jurisdictional differences are a reason to be wary of any template human resources policies or documents you find on the internet. “That may lead you to offer benefits that are far beyond industry standards in, say, the U.S.,” Connolly says. “That also could include term contracts [specifying a period of time of employment] as opposed to keeping them at-will. And then, when you want to terminate an employee, I have to say, ‘We can change it going forward, but we have to use what your contract said.’”

Example 2: Non-Compete Agreements

Another difficult example is noncompete agreements.

In some U.S. states, employers must provide an offer of employment or restrictive covenant at the start of a job. If an employee has been there a few years and is then given one, it might not cut it.

“So, just within the United States, you have to be cognizant of what jurisdiction you’re operating in and what the law is in that state,” Connolly says. “The same concept applies globally. You have to know that jurisdiction’s laws for that specific inquiry, and then apply the facts of the situation, which can turn on even a local law.”

While she has a high-level knowledge of worldwide employment laws, Connolly says she’s constantly in touch with local counselors to “sign off on any advice and advise on the more in-depth legal issues.” The same principle sometimes applies to translators—if, for instance, you require a dual language contract.

Why Seek Out International Counsel

“What I have found, and my clients have found, is that they’ve tried making changes on their own, and it’s an absolute mess because that’s what happens is if someone’s not used to advising on the various laws and the various jurisdictions worldwide,” Connolly says.

Besides that, the reason to seek out an attorney experienced in international business law is they can be the point person on local governments, federal governments, and all the statutory limitations therein.

“Having one person to go through as opposed to having to deal with 18 different counsels, clients appreciate that. The same goes for a business deal. The relationship partner talks to the company, and all the worker bees stay in the background,” Connolly says.

“Say a client calls because they want to take their independent contractor contract and make it usable across jurisdictions,” she continues. “So I highlight the fact that while I didn’t think that was possible, we might be able to get one for Europe, and then one for the U.S., and so forth. And when you expand in a new jurisdiction, I can say, ‘Here are things that might need to change,’ which usually has to do with non-competes and some other matters. And they’re like, ‘OK, forget it. We don’t want that. We’ll just do one in Europe.’ And then we go from there. But that took one phone call instead of six.”

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For additional information on these areas of law, see our overviews of international law, business organizations, and employment law.