A Guide to International Employment Law

International employment law refers to the regulations applied by private and public sectors regarding the rights and duties of employers, employees, unions, and governments in the workplace.

With advancements in technology, more organizations have been able to expand across borders and recruit diverse talent from other countries. However, research suggests that many workers in the developing world have not benefited from globalization, with over half remaining in the informal sector. Expanding hiring territories can fuel business growth by bringing in new skills and perspectives. But as companies seek to branch out internationally, understanding international labor and employment laws becomes critical to operating legally across borders.

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What's covered under international employment laws?

International employment laws are the regulations governing workplace rights, responsibilities, and standards across different countries. These laws cover everything from hiring and contracts to wages, benefits, and termination policies that companies must follow when employing people globally.

To oversee global employment, international law is regulated by the United Nations (U.N.) through an agency known as the International Labour Organization. This regulatory body sets standards in 187 member territories to advance social justice and promote decent work, and in two thirds of the ILO's Member States, this "Decent Work Agenda" has been at least partly implemented. Member nations agree upon the organization's terms and must then adopt and implement the regulations as part of their local laws.

Under this sweeping international law, the agency regulates employment in great detail. Here's a high-level overview of some of their policy goals:

• To prohibit child labor

• To prohibit forced or compulsory labor

• To prohibit discrimination at work, a principle that is part of the eight ILO Fundamental Conventions which also cover equal remuneration, forced labor, and child labor.

• To ensure the right to collective bargaining, including the ability to join unions

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Legal entity requirements for global hiring

So, do you really need to set up a legal entity in every country where you want to hire? Traditionally, yes—but that meant dealing with slow, expensive processes involving local lawyers and unfamiliar red tape.

Here's what entity setup typically involves:

• Legal complexity: Navigate local business registration and compliance requirements

• Time delays: Wait months for approvals before you can hire anyone

• Ongoing costs: Maintain local accounting, legal, and tax obligations

The good news? You no longer need to open an entity to hire internationally. A global employment platform with an Employer of Record (EOR) service lets you hire compliantly in new countries quickly, handling all the legal employer responsibilities for you.

Hiring and onboarding compliance internationally

Found the perfect candidate? Now comes the tricky part—bringing them on board compliantly. Each country has its own rules that go way beyond sending a standard offer letter.

Here's what varies by country:

• Contract language: Some require agreements in the local language

• Probation periods: Length and terms differ significantly

• Required documents: Right-to-work verifications and mandatory policies vary

• Offer restrictions: What you can and can't include in job offers

A streamlined process guided by local expertise helps ensure every new hire has a positive, compliant experience from day one.

What are some common international employment law issues?

Aside from the policies outlined by the International Labour Organization, there are also regional labor standards which are a form of international employment law. For instance, European labor law applies to all territories within the European Union (EU) and covers rights such as:

• Prohibition of workplace discrimination

• A minimum of four weeks' annual leave for employees

• A written employment contract, either fixed-term or indefinite

• The ability to move freely across states in the EU

Likewise, the U.S., Canada, and Mexico have their own labor standards, which are outlined in the North American Agreement on Labor Cooperation. These regulations cover:

• Workers' compensation

• Protection for migrant workers

• Equal pay for equal work

• The right to collective bargaining and strikes

• Prohibition of child labor

• Health and safety standards

Here's the bottom line: you need to follow local labor laws in every country where you do business. That means understanding not just international standards from the U.N., but also regional agreements and country-specific rules.

Let's look at some common compliance areas that apply across many territories:

Benefits

In some areas, employers are obligated to contribute to health insurance, retirement plans, workers' compensation, and unemployment insurance—which are critical, as work-related incidents are estimated to cause 2.8 million fatalities globally each year.

Minimum wage

Certain territories, such as the U.S., Canada, France, Ireland, and Australia (among others), have a minimum wage requirement. Companies seeking to expand into these territories must ensure they're paying a compliant rate, keeping in mind that the impact of minimum wage can be amplified by restrictive standards or softened by policies like employment protection laws that help to offset these effects.

Employee contracts

Many nations also have laws that require written employment contracts to define the terms of employment. Such agreements may outline the details of an employee's job description, working hours, pay, and time off.

Termination

Employee termination policies vary from one territory to the next. In the U.S., employers can terminate workers "at will," but in nations like France, they must have proper cause. In nations with such policies, fair processes must take place when an employee is terminated.

Payroll

In most countries, employers need to withhold payroll taxes and submit them to the proper authorities. Typically, this is only required for workers who are classified as employees and does not apply to freelancers or other independent contractors.

When it comes to hiring across borders, international employment law is clearly one of the most complex and challenging aspects of workforce management. Yet, it's also among the most important, as failing to comply with international labor and employment laws can lead to fines, penalties, and reputational damage. For this reason, any company seeking to expand into new territories must be diligent about compliance with all applicable regulations.

Navigating international employment law compliance

Look, international employment law is complex—but it shouldn't stop you from building an amazing global team. The key? Stay informed about the basics and use tools that handle the heavy lifting for you.

With the right partner, you can manage these complexities confidently and focus on what matters most: supporting your people. Oyster's global employment platform helps you start hiring globally, handling the intricacies of local laws so you don't have to.

FAQs

Are there international labor laws?

Yes, but they're more like guidelines. The International Labour Organization sets global standards, but actual employment laws are enforced by individual countries where employees work.

What is the international employment policy?

An international employment policy is a company's internal guidelines for managing global teams fairly while respecting local labor laws. It typically covers compensation, benefits, remote work, and conduct standards.

What is the right to employment in international law?

The right to employment is a fundamental human right from the Universal Declaration of Human Rights. It establishes everyone's right to work freely with fair wages and safe conditions, influencing national labor laws worldwide.