Three Ways to Effectively Guide an Organization Through Global Expansion
When companies begin the process of expanding to different countries, one of the first things they must consider is how to staff the new roles in a way that is seamless, efficient and, most importantly, compliant. Staying up to date on the variances in employment laws, at both the federal and local level, can take a considerable amount of time and resources.
July 27, 2017 at 11:45 PM
4 minute read
When companies begin the process of expanding to different countries, one of the first things they must consider is how to staff the new roles in a way that is seamless, efficient and, most importantly, compliant. Staying up to date on the variances in employment laws, at both the federal and local level, can take a considerable amount of time and resources. Consider how different employment laws can be from state to state and then imagine how that is compounded on a global scale. For example, the General Data Protection Regulation (GDPR), an initiative aimed to protect the data of individuals and businesses in the European Union (EU), will go into effect in May 2018. U.S. businesses with overseas operations must comply with the new regulation as well or face serious penalties—which could include fines up to 4 percent of the organizations' global revenues.
In order to mitigate these challenges and to avoid legal and financial penalties, an organization's general counsel/in-house legal team should keep the following suggestions in mind in order to make your global expansion as simple and efficient as possible:
• Be in close coordination with HR—Human resources and legal should work hand in hand when it comes to international employment law. Depending on the organization's internal structure, how closely the two teams work together may differ, but lines of communication should remain open and consistent. To maximize workflow and effectiveness, a clear process should be in place so that HR recognizes when and where the legal team's counsel is necessary. Severance requirements are particularly complex for U.S. teams. As a result, negotiating severance in international employment contracts needs input from legal counsel. For example, there are instances of organizations being forced to pay tens of thousands of dollars more in severance pay because the HR team agreed to additional seniority during the contract phase. If legal is involved in the process from the beginning, the differing policies can be taken into account and acknowledged when the employee is let go. Keeping an open dialog between HR and legal will ensure everyone is on the same page and decrease confusion throughout the process.
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