This article was updated on August 13, 2018.
One of the biggest challenges HR leadership faces is managing an international workforce. In particular, dealing with global overtime legislation and the nuances between various countries. Where local regulations differ from those in the U.S., especially in the case of the Fair Labor Standards Act (FLSA), there can also be inconsistencies between blue and white collar workers and even between European Union (EU) countries.
There is a variety of legislation across the EU that, in itself, can make implementing any global overtime policy difficult, especially when local laws differ from the regional regulations. For example, France limits their workweek to 35 hours, whereas the EU directive is a maximum of 48 hours per week. Essentially, any attempt to enforce global policy must be subject to the local wage and overtime laws, rather than the requirements of the FLSA.
Understanding compliance in relation to global overtime legislation means having an awareness of the regulations that impact workers in each international region.
Here's but a small sample of potential regulatory differences you'll encounter across the globe:
EU regulations include the Working Time Directive, (WTD) and the Acquired Rights Directive (ARD). The WTD protects workers' health and safety by requiring paid breaks, a rest period of 11 hours in any 24 hour period and a right to work no more than 48 hours per week. An individual business can opt out of the 48-hour restriction, as long as the worker agrees with no detriment for not agreeing, records are kept and the authorities are notified. The ARD allows for employee contracts and existing terms and conditions pertaining to location and hours worked to remain intact when organizations merge or are acquired.
Since 1995, China has had the Labor Law of the People's Republic of China, which covers a number of employment issues. Overtime laws and provisions are particularly stringent, requiring prior approval from local labor authorities to implement a working hours system outside of the standard eight hours per day, 40 hours per week. Such an exception requires strict monitoring to ensure compliance.
The Employment Contract Law No. 20, 744 in Argentina requires the registration of all employment relationships to be in the Special Payroll Book, which is controlled by the Ministry of Labor. Although not strictly an overtime issue, failing to comply could result in significant compensation being awarded to employees.
Effective management of global overtime policies should not only be compliant with each country's current legislation, but should also include the localized key payroll issues of hours worked, pay level loading and rest periods. A one-size-fits-all mentality, even for specific regions, should be avoided. Some countries (Canada, France, Korea, etc.) have even criminalized wage and hour violations, and in rare cases managers can be held responsible and face jail time, according to Lexology.
For non-exempt workers who travel outside the U.S. on business, the FLSA overtime rules will still be in effect for the time they are outside the country, as long as the worker has worked at least one hour on U.S. soil in a workweek. State laws need to be adhered to, as well, and in some areas these will still be applicable even if the worker is outside the scope of the FLSA.
Business travelers based outside of the U.S. will be subject to their home country legislation. Venezuela and Brazil extend their overtime law extra-territorially and Spain has a strict 40-hour workweek, which applies regardless of what country the employee is working in. Saudi Arabia limits the working hours of women and those laws can also be applied to inbound female business travelers. Local mandatory prayer breaks in Muslim countries and regulated rest times will also apply to inbound business travelers.
Ensuring accuracy when it comes to global overtime legislation can, to some extent, be managed with time and labor management software and country specific expertise; however, guidance and direction should come directly from organizational leadership in order to be certain any global policy will align with the organization's values and mission.
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