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The Globalization of Labor and Employment Law April 22, 2010


The Globalization of Labor and Employment Law April 22, 2010 Michael W. Hawkins, Esq. Colleen P. Lewis, Esq. Dinsmore & Shohl LLP 255 East Fifth Street, Suite 1900 – PowerPoint PPT presentation

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Title: The Globalization of Labor and Employment Law April 22, 2010

The Globalization of Labor and Employment
LawApril 22, 2010
Michael W. Hawkins, Esq. Colleen P. Lewis,
Esq. Dinsmore Shohl LLP 255 East Fifth Street,
Suite 1900 Cincinnati, OH 45202 Phone
513.977.8200 Email
Michael W. Hawkins, Esq.
  • Michael Hawkins is a partner with the
    Cincinnati, Ohio ALFA International law firm of
    Dinsmore Shohl, LLP. He received his J.D. from
    the University of Kentucky, College of Law
    (1972), Order of the Coif, Lead Article Editor,
    Kentucky Law Review and his B.A. from the
    University of Kentucky (1969). He serves as a
    Mediator and Arbitrator on the American
    Arbitration Association Commercial and Employment
    Panels and for the National Arbitration Forum. He
    is a frequent speaker and writer on mediation and
    arbitration. He taught Conflict Resolution and
    Mediation at Xavier University where he was an
    Adjunct Professor. Mr. Hawkins' practice includes
    representing employers in all aspects of
    employment law and litigation and labor relations
    as well as business competition litigation. Mr.
    Hawkins currently serves as Chair of ALFA
    International. Mr. Hawkins has been listed since
    1992 in The Best Lawyers in America and selected
    as an Ohio Super Lawyer. He argued National Labor
    Relations Board v. Kentucky River Community Care
    and Humphries v. CBOCS West, Inc. before the
    United States Supreme Court.

Colleen P. Lewis, Esq.
  • Colleen P. Lewis is a Partner in the Labor
    and Employment Law Department. Colleen's practice
    includes the defense of private and public
    employers on a wide array of traditional labor
    and employment issues, including discrimination
    and civil rights issues, Family and Medical Leave
    Act compliance, Americans With Disabilities
    compliance, breach of employment contracts,
    employment-at-will, wage and hour, and National
    Labor Relations Act. She handles collective
    bargaining and arbitrations. She also has
    extensive experience reviewing and drafting
    Affirmative Action plans and representing
    companies before the OFCCP. Colleen's practice
    encompasses both national and regional
    representation of clients in state and federal
    courts and she has handled labor and employment
    matters in 13 states. Colleen is former Chair of
    the firm's Recruiting Committee. Colleen is Chair
    of the Firm's Workplace Harassment Committee. She
    is a member of the firm's Professional
    Development and Diversity Committees.

The Globalization of Labor and Employment Law
  • To keep up with competitors, businesses have been
    expanding around the globe. These expansions
    offer unique but exciting human resources
    opportunities and challenges.
  • Language barriers are not the only issue a human
    resources representative may encounter when
    attempting to set up operations in a different
  • Cultural differences in recruiting, compensation,
    laws and daily procedures may present difficult
    challenges and require unique solutions.

Involvement of Human Resources Representatives
During Potential Mergers and Acquisitions
  • Companies have historically focused on the mere
    financials of a merger or acquisition to
    determine whether it would be a good fit with
    another company for expansion.
  • Unfortunately, this philosophy tends to ignore
    the largest asset of the merger the acquisition
    of the workforce and the people involved.

Hiring Local Executives Rather Than Transferring
Company Executives
  • Eliminating this us-vs-them approach early
    helps demonstrate the companys confidence in the
    newly formed or acquired branch.
  • These local executives are typically more
    familiar with the local workforce (who will be
    the backbone of this local office) and can
    connect more easily.

Advantages of Hiring a Local Executive
  • Cheaper
  • Knows local market customs so they can better
    spot emerging trends
  • Understands how to motivate other local national
  • Increasingly knows English and are more available
    and qualified

Disadvantages of Hiring a Local Executive
  • Takes time to be brought up to speed on highly
    technical product lines
  • Lacks the personal connections at corporate
  • Demand for local executives typically exceeds

Advantages of Transferring a Company Executive
  • Knows the Companys products and culture
  • Unlikely to steal propriety knowledge and set up
    competing business
  • Does not put country ahead of company
  • Easily communicates with corporate headquarters

Disadvantages of Transferring a Company Executive
  • High cost (relocation, housing, training)
  • Difficulty in moving spouse, children
  • Concern for life-style changes and security
  • Concern for negative out-of-sight, out-of-mind
    impact on career development

Global Employment Policies
  • Rather than creating different policies for every
    country where a company is located, companies
    have began to establish a global approach to
    employment policies and procedures.
  • These policies serve as a global framework for a
    companys practices and help in integrating the
    companys beliefs about issues that are
    applicable across the globe.

Global Employment Policies
  • Poverty Alleviation. Give priority to productive
    employment to the working poor as basis for all
    development strategies and policies.
  • Sustainability. Integrate economic, social and
    environmental objectives in all global strategies
    and national policies and give priority to new
    technologies, production methods and consumption
    patterns, through which economic growth can be
    decoupled from pressure on national resources.

Global Employment Policies
  • Gender Equality. Mainstream equal opportunities
    between men and women in all global strategies
    and national policies and ensure that women are
    enabled to fully contribute to and benefit from
    economic and social development.
  • Employability and Adaptability. Give priority to
    life long learning to make people ready for
    existing and future jobs, and strengthen social
    dialogue to facilitate flexibility of enterprises
    and to promote workers security in employment.

Developing Global Compensation and Benefits
  • Having a universal philosophy eliminates the
    potential for disparate treatment between
    different locations or the establishment of a
    precedent that may be impossible to attain as the
    company continues to expand.
  • Competitive comparisons would be made against
    other leading companies in each country.
  • Base salary policies normally would be
    established at the median, or 50th percentile.

Developing Global Compensation and Benefits
  • Management incentive plans would be structured to
    provide total compensation at the upper quartile,
    or 75th percentile, provided performance targets
    were met or exceeded.
  • Benefit plans would be established not to exceed
    market median.

Safety in the Workplace
  • Dealing with everything from civil wars to global
    terrorism, companies recognize the safety
    concerns of both its local workers and when
    sending employees from its headquarters to
    another location.

The Current Economy
  • Frequently, local divisions are more expensive to
    run, but companies feel a sense of commitment to
    its own economy, thus creating a difficult
  • In response to these economic times, companies
    are creating unique solutions, such as having
    employees work four longer days and then have
    three days off.

Checklist for International Expansion
  • Employment/Immigration Issues
  • Ensure labor laws do not transcend employment
    agreements. Understand mandatory bonus,
    vacation, termination payment laws.
  • Does at-will employment exist
  • If not, employer responsible for payment after
    employee termination.

Checklist for International Expansion
  • Must a training program be created and
  • Native hiring
  • Does the country have this requirement?
  • How many citizens must be hired?

Checklist for International Expansion
  • Are noncompete agreement recognized?
  • Employee inventions
  • Level of employee right to ownership

Checklist for International Expansion
  • Visa requirements for U.S. workers (personal tax
  • Employment Agreements, policies, handbooks
  • Expatriate package, tax and estate planning, tax
  • Mandatory profit sharing requiring the
    consideration of alternate structures

International Labor and Employment Checklist
  • Terms and Conditions of Employment
  • Contracts
  • Written employment applications, contracts,
    handbooks and statements of employment
  • Lifetime employment, severance indemnities
  • Modification/Absence of Employment At Will
  • Form agreements for Senior and employees
  • Independent Contractors/Distributors
  • Staffing Agencies/Temporary Workers

  • Codes of Conduct
  • Employee Handbooks
  • Disciplinary Procedure
  • Notification
  • Grievances
  • Appeal

Unionization/Collective Bargaining
  • Right to Organize
  • Organize Workers Freedom of Association
  • Power of Unions
  • i.e. All-China Federation of Trade Unions

  • Process (Notice)
  • Grievance Procedure
  • Arbitration
  • Severance
  • Lay Off/Shutdown Procedure

Legal Concerns
  • Application of American Discrimination Laws
  • Alien Tort Claims Act
  • Railway Labor Act
  • Choice of Law
  • Simultaneous Application of U.S. and foreign law
    to U.S. workers abroad
  • U.S. and other Export Control Laws

Legal Concerns
  • Immigration/Naturalization Laws
  • Sales agents deemed employees?
  • Independent contractors deemed employees?
  • Employees income tax/equalization and estate tax
    issues for dual nationals
  • Restrict authority/ability to bind through local
    powers of attorney or otherwise?

Legal Concerns
  • Authority over bank accounts limited?
  • IP ownership/inventions?
  • Mandatory profit sharing, bonus and vacation
  • Mandatory native hiring schemes?
  • Tax incentives for local hiring?