Labor Laws and Regulations Shifts in the Face of COVID-19
It’s hard to fathom the impact of the COVID-19 pandemic on the global labor market. Entire industries worldwide have ground to a halt due to health concerns, and the globalization that powered the business world has now become an Achilles heel. In essence, many industries across the world depend on human mobility and migration. This includes migrant workers in the farm industry, tech support professionals in Asia, entrepreneurs traveling across the globe.
We are already seeing the impact of this change in action, with unheard-of amounts of unemployed people across the world. However, we are in the midst of an unprecedented amount of labor, tax, migration, and payroll changes. Failing to react could leave your company in a position of non-compliance. What should these companies do next?
COVID-19 Updates And The International Labor Market
The major thing that needs to be mentioned here is that while all countries are making some type of change to their laws to account for the pandemic, they are not all the same. Different countries are dealing with different levels of outbreaks and economic concerns, and this is reflected in the shifts.
So, with all this said, here’s a profile of 10 countries making major adjustments to their taxation, labor, migration, and payroll legislation in response to the ongoing pandemic.
- United Kingdom: Companies lower than 250 employees can be reimbursed for sick leaves. Notably, employers selecting workers as “redundant” need to be able to prove they are making their decisions not based on discrimination.
- Mexico: Mexico and the United States have come together to restrict non-essential land travel across the border to stop virus transmission. This means that travelers may be denied at the border if they cannot supply proper proof. Mexico has also enforced laws requiring companies to pay full salary/benefits to employees during the shutdown.
- USA: COVID-19 U.S. statistics point to the country being one of the most impacted in the world by the pandemic. Perhaps one of the biggest recent developments is the halting of most types of immigration. This is specifically designed to keep foreign workers from taking American jobs, so you need to keep that in mind. Also, many state governments are implementing plans for major tax reform to help with recovery in the coming months.
- Canada: Canada recently passed a law subsidizing up to 75% of employee wages to avoid mass layoffs, but qualification is contingent on the business structure and percentage of income lost since March of 2020.
- Chile: Work contracts are being amended to allow employees to access their unemployment insurance quicker in the event of financial uncertainty.
- Brazil: Brazil has suspended payment of its Severance Pay Fund for April and May. One notable change is that teleworking is now allowed regardless of any existing labor agreements or changes in employee contracts.
- Germany: Germany is at the forefront in terms of changing business policy for public health. If a business is closed due to a formal ban, all employees are still entitled to up to six weeks of compensation.
- Ukraine: In March, work from home was stipulated for the first time by Ukrainian law. Work permits are also suspended for certain activities.
- Russia: A flat travel ban has been instituted on all foreigners entering Russia, with some exceptions. Any employees returning from abroad need support from their employers with quarantine for 14 days. New visa applications for foreigners are also temporarily suspended. Employers are also required to pay at least 2/3 of their employee’s salaries even if they are forced to shut down.
- Cote d’Ivoire: All regular passenger flights have been suspended for an indefinite period. Changes to the existing employment law are minimal as of this date, though there has been talk of suspending import duties for materials being used to help with fight the pandemic.
Empowering Your Global Expansion
With COVID-19 causing companies to adjust their labor laws compliance, payroll schemes, and migration rules at a rapid rate, does this mean that companies have to put their international expansion plans on hold? Not at all, if you use the right support. A global PEO provider is more important than ever during this time to ensure that you keep your plans moving internationally, without any compliance issues. Global PEO services like Acumen International take a lot of the struggle out of international expansion by serving as the technical employer of your foreign teams. What are some of the key benefits we offer?
- By using a global PEO service, you can do business in a new country without incorporation. The pandemic has halted a lot of incorporation efforts, so this is likely the only way to start a business quickly.
- We make sure that you have total legal compliance in over 190 countries for the workers you already chose. As you can see, employment law is changing even faster than usual. Our services keep you protected from legal fallout.
- We also help with payroll and benefits programs for your employees. When the dust settles, a lot of people are going to be reentering the workforce. You need an appealing salary/benefits package to draw in top talent.
As more and more COVID-19 updates come in, expect immigration rules to see more change. However, our services can help with hiring and paying foreign sales reps, as well as other professionals you want to bring in.
Things You Can Do Next
As a result, while COVID-19 is causing changes for those trying to enter new foreign markets, that doesn’t mean you are paralyzed as far as options. It’s still very possible to:
- Employ overseas sales forces in key markets
- Begin your operations and get presence in the host countries
- Expand without incorporation
- Begin with a small team of remote workers in a new country and add any headcount later
The key, though, is having a service/partner that can help you stay flexible and compliant as this situation evolves. Global PEO solutions and a global employer of record are the exact methods you need. Be sure to keep following the Acumen International blog for more COVID-19 updates as well
Reach out to us today for more information.