Understanding Employment & Labor Laws
Employment and labor laws have a profound impact on how organizations operate in the U.S. When a U.S. company chooses to operate on a global scale, international labor laws become a major topic of concern and require a further understanding of how these international labor laws operate. Companies must maintain employment and business practices that meet new standards of legal compliance, ethics, and transparency. With increasing public scrutiny of employment and business practices, multinational organizations face significant challenges. All businesses that operate within a global environment must understand and comply with numerous legalities.
U.S. Labor Laws
Any organization that employs people must understand federal and state labor laws in the U.S. When conducting business overseas, businesses must have an understanding of international labor laws and the specific countries/regions they operate within. There are four primary concepts (with many sub-concepts) related to U.S. labor laws:
- The first concept relates to wages and hours worked. This includes minimum wage and overtime, wage garnishment, protections in agriculture, child labor laws, and the rights governing workers with disabilities.
- The second concept relates to the safety and health standards, which includes occupational safety and health (OSHA), mine safety and health, workers protection in agriculture, and child labor laws for both agricultural and nonagricultural work.
- The third concept in U.S. labor laws concerns health benefits, retirements standards, and workers compensation, including employee benefit plans, black lung compensation, Longshore and Harbor Worker’s Compensation, Defense Base Compensation, and the Family and Medical Leave Act.
- Finally, there are miscellaneous standards that include such things as lie detector tests, immigration authorizations, contract workers, and standards in construction contracts.
One of the most significant legislature that was created from the US government was the National Labor Relations Board (NLRB) in 1935. The NLRB is the administrative agency responsible for the enforcement of the National Labor Relations Act (NLRA). The NLRA guaranteed workers the right to join unions without fear of management reprisal. The NLRA was created to enforce workers’ right and prohibited organizations from committing unfair labor practices that might discourage organizing or prevent workers from negotiating a union contract. The NLRA’s was the impetus for labor unions. The most important element of the NLRA defines protected activity and reads: “Employees shall have the right to self-organization, to form, join, or assist labor organizations, to bargain collectively through representatives of their own choosing, and to engage in other concerted activities for the purpose of collective bargaining or other mutual aid and protection.”
International Labor Laws
International labor laws present an entirely new set of challenges. In addition to having a comprehensive understanding of U.S. labor laws, operating globally means extending that understanding to international labor laws. Ideally, there would be a world labor act that regulates laws and governs all countries business operations. Although the probability of a global uniform labor laws is unlikely, the International Labor Organization (ILO) was created that comprises more than 170+ nations. The ILO aims to ensure that it serves the needs of working men and women by bringing together governments, employers, and workers to set labor standards develop policies and devise programs. The ILO formulates conventions and recommendations for labor legislation that can be adopted by all countries, which include minimum specifications and often provisions for national or traditional variations. Enforcement procedures are generally left to the individual nations. The ILO has promulgated 182 conventions and 190 recommendations, and there have been over 6,500 ratifications of these. Although there are still more differences than similarities in labor laws from country to country, the ILO has generated some harmonizing of international labor laws.
U.S. Export Dependency
Nearly half of all jobs in the U.S. depend on exports and many jobs are being outsourced to other countries to reduce costs; however, foreign operations are not subject to U.S. labor laws. On the contrary, most countries have labor laws of their own which U.S. companies must follow. Trade treaties will make the international dimensions of the legal environment more important to U.S. firms. Secondary boycotts, strikes, and picketing are becoming increasing common in global industries, and these activities are governed by the NLRA when occurring on U.S. soil and governed by international labor laws when occurring outside the U.S.
The U.S., Canada, and Mexico created the North American Free Trade Agreement (NAFTA) to lower trade barriers among themselves. The U.S. and 17 Pacific Rim nations created the Asian Pacific Economic Cooperation (APEC) to ease trade barriers among themselves and create a free trade zone from Chili to China. The European Union continued to add new members to its organization and the World Trade Organization (WTO) continues to lower trade barriers among the 160 nations it comprises. With the advent of sophisticated telecommunication systems and computer networking, economic globalization is rapidly expanding in the 21st century.
Working Outside the U.S.
Employers increasingly work across international borders. At the same time, employers must maintain employment and business practices that meet new standards of legal compliance, ethics, and transparency. With increasing public scrutiny of employment and business practices, multinational employers face significant challenges. Labor and employment law can no longer be considered a purely local issue. With the internet and the global media, business and employment practices that are challenged in an isolated location can reverberate around the globe.
Globalization has led nations to seek more effective governance in international labor laws. International labor law needs the capacity to change the benefits for states related to core labor standards compliance. In today’s political economy, international labor law must seek to alter the economic payoffs to labor standards to work correctly.
Domestic and international labor laws have a profound effect on the way organizations operate. When operating an organization with employees, companies must be experts at understanding and adhering to these laws, otherwise they may face lawsuits, protests, bad publicity, and corruption. There are other considerations such as economic sanctions and boycotts, export controls, anti-terrorism, and corrupt practices that must be evaluated when conducting global business. One of the main changes that labor law has had to face is the proliferation and continual growth of new people and organizations. A multi-level regulation of labor rights is necessary in a global economy to regulate rights.
Employees of multinational corporations are increasingly working across borders. Employment and labor laws profoundly influence how an organization operates, both domestically and internationally. When a U.S. company operate on a global scale, international labor laws become a pivotal element and require a comprehensive understanding of how international labor laws operate. All businesses that operate within a global environment must understand and comply with multiple legalities.
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