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Global Employment and Labor Law Update - February 2020

Welcome to the fourth edition of our quarterly Global Employment and Labor Law Update. Drawing on our international team's experience, our aim is to inform you of workplace developments on the horizon as well as recent changes of significance. We hope you find the practical information useful in managing your global employment challenges. Please do not hesitate to contact us if you wish to find out more.

Diane Gilhooley Diane Gilhooley
Global Head of Employment and Pensions
dianegilhooley@eversheds-sutherland.com

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South Africa

Subject Matter/Name of Development

Employers’ obligation to validate prospective employees’ qualifications prior to their appointment

Summary Employers must authenticate the qualifications of prospective employees and ensure that they are registered on the National Learners’ Records Database prior to appointment. If the qualification is not registered on the National Learners’ Records Database, such qualifications must be referred to the South African Qualifications Authority for verification and evaluation.
Impact Date Unknown at this time, expected later this year
Employer Implications/Action Needed Employers must introduce and implement measures in order to comply with this provision.
Employer Risk There are no penalties or sanctions applicable to employers for failing to comply with this obligation. However, failure to authenticate or verify the qualifications of prospective employees could put the employer at risk of employing someone who has falsified their qualifications.
Subject Matter/Name of Development Commissioning parental leave for surrogate mothers
Summary A new form of statutory leave has been established for employees who are commissioning parents in a surrogate motherhood agreement. The new form of leave gives an entitlement of at least 10 consecutive weeks leave; or parental leave. An employee may commence commissioning parental leave on the date that the child is born and where there is in place a surrogate motherhood agreement. If a surrogate motherhood agreement has two commissioning parents, one of the commissioning parents may apply for commissioning parental leave and the other may apply for parental leave, selection to be decided between the two commissioning parents.
Impact Date 1 January 2020
Employer Implications/Action Needed Employers should amend their leave policies and/or contracts of employment in order to include the possibility of commissioning parental leave.
Employer Risk Since this is an automatic and mandatory form of leave, employers must give effect to it. Failure to do so would entitle employees to lodge complaints with the Department of Labour who may, in turn, send labour inspectors to the workplace and/or issue compliance orders to the employer. Employees may also refer a dispute to the CCMA (dispute resolution body) regarding any non-compliance with the new right.
Subject Matter/Name of Development Adoption Leave
Summary A new form of statutory leave has been established for employees who are adoptive parents of a child below the age of two. This leave entitles a qualifying employee to (i) adoption leave of at least 10 consecutive weeks ; or (ii) parental leave. An employee may commence adoption leave on the date that (i) the adoption order is granted; or (ii) a child is placed by a court in the care of the prospective adoptive parent, pending the finalisation of an adoption order in respect of that child, whichever date occurs first. It is worth noting that if an adoption order is made in respect of two adoptive parents, one of the adoptive parents may apply for adoption leave and the other may apply for parental leave, selection to be decided between the two adoptive parents.
Impact Date 1 January 2020
Employer Implications/Action Needed Employers should amend their leave policies and/or contracts of employment in order to include the possibility of adoption leave.
Employer Risk Since this is an automatic and mandatory form of leave, employers must give effect to it. Failure to do so would entitle employees to lodge complaints with the Department of Labour who may, in turn, send labour inspectors to the workplace and/or issue compliance orders to the employer. Employees may also refer a dispute to the CCMA (dispute resolution body) regarding any non-compliance with the new right.
Subject Matter/Name of Development

Parental Leave

Summary An additional form of statutory leave has been established, mainly targeted at persons who have become fathers. An employee, who is the parent of a child, is entitled to at least 10 consecutive days parental leave (this provision does not concern mothers who give birth to a child, as they have other statutory entitlements to leave). An employee may commence parental leave on (i) the day that the employee’s child is born; or (ii) the date that an adoption order is granted by a court to an employee/the date that an adoption order is granted by a court to an employee/ the date that the child is placed in the care of a prospective adoptive parent by a court pending the finalisation of an adoption order in respect of that child, whichever date occurs first.
Impact Date 1 January 2020
Employer Implications/Action Needed Employers should amend their leave policies and/or contracts of employment to include the possibility of parental leave.
Employer Risk Since this is an automatic and mandatory form of leave, employers must give effect to it. Failure to do so would entitle employees to lodge complaints with the Department of Labour who may, in turn, send labour inspectors to the workplace and/or issue compliance orders to the employer. Employees may also refer a dispute to the CCMA (dispute resolution body) regarding any non-compliance with the new right.
Subject Matter/Name of Development Clarification of automatic unfair dismissal rights for individual employees
Summary The Labour Relations Act 1995 (“the LRA”) states that a dismissal by reason of ”refusal by employees to accept a demand in respect of any matter of mutual interest between them and their employer.” will be automatically unfair. The Labour Court has recently determined that this provision is not applicable in a dismissal dispute concerning an individual employee seeking to challenge an employer’s legitimate exercise of collective bargaining under the LRA.
Impact Date Immediately
Employer Implications/Action Needed Employers should be aware that individual employees may not claim automatically unfair dismissal in dismissal dispute cases.
Employer Risk None
Subject Matter/Name of Development Liability for employer’s obligations
Summary The Labour Court recently held that the definition of employer under the LRA can apply more widely than the traditional understanding of employer and can extend liability under the LRA to others who conduct an associated or related activity or business by or through an employer. However, such liability will only apply to this wider group if they are in an associated or related business with the employer which is intended to defeat, or has the effect of defeating, the purposes of the LRA (or any other employment law), either directly or indirectly as it applies to employers.
Impact Date Immediate
Employer Implications/Action Needed Organisations with complex contractual and other arrangements with employers which are intended to or could be perceived as being intended to avoid employer obligations under labour legislation are likely to be found subject to those employer obligations in practice.
Employer Risk Employers need to be vigilant over where LRA obligations could apply. For example, whilst the LRA contemplates that a single person may be the employer, it does not provide criteria for determining clearly in what circumstances that may arise, other than a simulated arrangement or sham.

Contact:

Sandro Milo
Partner
+27 834 4403 20
sandromilo@eversheds-sutherland.co.za

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China

Subject Matter/Name of Development New social insurance measures released for Hong Kong, Macao and Taiwan residents working in mainland China
Summary

On 29 November 2019, the People’s Republic of China (PRC) Ministry of Human Resources and Social Insurance released the Interim Measures on Social Insurance Contributions for Hong Kong, Macao and Taiwan Residents (“New Measures”) effective from 1 January 2020. Key highlights of the New Measures include: (I) Employers in mainland China are legally required to make social insurance contributions (including pension , medical , work-related injury, unemployment and maternity insurance) for their employees who are Hong Kong, Macao and Taiwan residents (“HMT Employees”); (II) Employers in mainland China must apply for social insurance registration for HMT Employees based on, for example, their valid travel certificate and employment contract; and (III) HMT Employees who have already been subject to local social insurance contributions in Hong Kong, Macao or Taiwan, with such status remaining unchanged, can be exempted from contributions of pension and unemployment insurance in mainland China based on appropriate evidence issued by local authorities.

Impact Date 1 January 2020
Employer Implications/Action Needed Employers in mainland China must comply with the New Measures. In particular, in the cities where historically employers have not been legally required to make social insurance contributions for HMT Employees (e.g. in Shanghai), such practice will need to be changed.
Employer Risk N/A

Contact:

Jack Cai
Partner
+862161371007
jackcai@eversheds-sutherland.com

Hong Kong

Subject Matter/Name of Development Taxation of employee termination payments clarified (case law).
Summary

The Court of Final Appeal confirmed the principle that: termination payments in a settlement agreement which are received in satisfaction of the employee’s rights under his contract of service are subject to Salaries Tax, while termination payments received in abrogation of an employee’s rights under his employment contract are not subject to Salaries Tax.

 

Impact Date 14 November 2019
Employer Implications/Action Needed Parties to a settlement agreement for a termination of employment should carefully structure the payments if the goal is to minimise taxation. It is recommended that the rationale behind each payment item be clearly recorded in the settlement agreement to facilitate Salaries Tax assessment by the Inland Revenue Department.
Employer Risk

The employee may incur unexpected Salaries Tax liability if the payments are not appropriately structured. The employer may be required to provide further information to the Inland Revenue Department for Salaries Tax assessment purposes if the rationale behind the termination payments has not been clearly recorded in the settlement agreement.

Read more here

Subject Matter/Name of Development Proposed legislation to increase paid statutory maternity leave from 10 weeks to 14 weeks introduced
Summary

The government has introduced the Employment (Amendment) Bill 2019 in the Legislative Council which proposes to increase paid maternity leave for pregnant employees from 10 weeks to 14 weeks. The extra four weeks of maternity leave will be reimbursed by the government. The Bill will also provide maternity leave to female employees who suffer a miscarriage or stillbirth after 24 weeks of pregnancy and relax documentation requirements for sickness allowance for medical examinations in relation to pregnancy.

 

Impact Date Expected to be in 2021
Employer Implications/Action Needed Employers will have to pay the extra four weeks of maternity leave payment to the employee at four-fifths of the employee’s average daily wages, capped at HK$36,822, before an application can be made to the government for reimbursement. The government will provide further details on the reimbursement procedure at a later stage.
Employer Risk

Employers should review their maternity leave policy to ensure compliance when the legislative amendments come into effect.

Read more here

Contact:

Jennifer Van Dale
Partner
+852 2186 4945
jennifervandale@eversheds-sutherland.com

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Austria

Subject Matter/Name of Development Supreme court reduces potential employer fines under the Law against Wage and Social Dumping (case law)
Summary The European Court of Justice (ECJ) held that the sanctions provided by the Law against Wage and Social Dumping (“Lohn- und Sozialdumping Bekämpfungsgesetz”, LSD-BG) for not keeping or not providing payslips when posting or transferring employees to Austria infringe EU freedom of services. The Austrian Supreme Administrative Court considered the ECJ ruling and held that, in the event of a failure to keep or provide payslips, only one single fine may be imposed (up to the maximum amount provided by law and disregarding any minimum amount) - even if the non-compliance involves several employees.
Impact Date 15 October 2019
Employer Implications/Action Needed Administrative fines must no longer be imposed cumulatively for each employee. Employers that have recently received formal requests/ orders and penalty decisions for noncompliance with the LSD-BG may see a considerable reduction in the imposed fines.
Employer Risk Despite lower penalties, employers must ensure that wage documents (payslips) are kept available at workplaces. The Austrian legislator is likely to take corrective action to ensure compliance with EU law, as required by the ECJ.
Subject matter/Name of Development Nursing (or carers’) leave/part-time working
Summary Employees in companies with more than five employees are now entitled to nursing (carers’) leave, or part-time working, for a maximum of four weeks. There are eligibility requirements including: a minimum employment period of three months; that the care is for a close relative; and criteria around the level of care involved. The leave can be taken unilaterally by the employee without the consent of the employer. However, the employee has no enforceable claim for nursing leave exceeding four weeks (although this can be agreed mutually between the employee and employer).
Impact Date 1 January 2020
Employer Implications/Action Needed Employees who are entitled to this leave have to notify their employer of its intended commencement as soon as they know the date. The employee has to evidence the need for care and their status as a close relative of the person in need, within one week upon the employer’s request.
Employer Risk Generally only a single period of leave may be taken in relation to a particular relative. A further period is only permitted if the level of care for that person is increased.
Subject matter/Name of Development Strengthening termination protection for older employees (case law)
Summary The Austrian Supreme court has strengthened termination protection for employees who are over 50 years at the time of hiring. Previously, when challenging a termination for being socially unfair, the employee’s age did not have to be taken into account when assessing the impact on the employee. Contrary to existing case law, the Austrian Supreme court decided that the age of the employee must not be disregarded and the employee’s chances on the labour market have to be assessed based on the actual age of the employee.
Impact Date 30 October 2019.
Employer Implications/Action Needed A termination will be considered socially unfair if it impairs the employee’s interests. This is the case if the employee will not be able to find a new job within a reasonable period after termination of his/her employment. If the employee’s interests are impaired, the employer must be able to prove (i) personal reasons for the termination relating to the employee or (ii) operational reasons, in order to justify the termination of the employee.
Employer Risk A termination will be considered socially unfair if it impairs the employee’s interests. This is the case if the employee will not be able to find a new job within a reasonable period after termination of his/her employment. If the employee’s interests are impaired, the employer must be able to prove (i) personal reasons for the termination relating to the employee or (ii) operational reasons, in order to justify the termination of the employee.

Contact:

Silva Palzer
Partner
+43 15 16 20 12 5
silva.palzer@eversheds-sutherland.at

Czech Republic

Subject matter/Name of Development Court clarification of employee liability for goods (case law)
Summary The Supreme Court of the Czech Republic has recently ruled that an employee’s personal liability for goods and items of the employer, for which they have accepted responsibility in writing, also applies to goods that are accessible to customers ( e.g. goods on shelves on shop premises). The legal requirement that an employee has personal control over the goods is not lost merely because the goods are freely accessible to customers.
Impact Date N/A
Employer Implications/Action Needed Employers should ensure employees are aware of the extent of their obligations.
Employer Risk No direct client risk.
Subject Matter/Name of Development Increase of minimum wage
Summary

The minimum wage for a full-time worker (40 hours) has risen to CZK 14,600 (approx. EUR 580) per month or CZK 87.30 (approx. EUR 3.50) per hour. In addition, the minimum guaranteed wage for the respective 8 groups of work has been increased (applying to all employees whose wage is not covered by a collective agreement) and now ranges between 14,600 to CZK 29,200.

Impact Date 1 January 2020
Employer Implications/Action Needed Employers must provide their employees with a minimum wage corresponding to their type of work.
Employer Risk A fine may be imposed.
Subject Matter/Name of Development Electronic sick notes now in force
Summary Doctors will no longer provide sick notes supporting employee absence in a paper form. Instead, doctors will load details of the employee’s medical conditions onto a new electronic system that employers will have direct access to.
Impact Date January 2020
Employer Implications/Action Needed Employers should ensure that they communicate this change internally and have relevant online access to receive electronic sick notes.
Employer Risk No direct client risk

Contact:

Radek Matouš
Managing Attorney
radek.matous@dhplegal.com

Denmark

Subject Matter/Name of Development  New Holiday Act - transition period
Summary

As the new Holiday Act takes effect on 1 September 2020, whereby concurrent holiday is introduced, Denmark is currently five months into the transition period (which ensures employers are not obliged to provide more than five weeks’ paid holiday to any employee). During the transition period, holiday accrued under the current Holiday Act from 1 September 2019 to 31 August 2020 will be “frozen”, meaning that the accrued holiday cannot be taken nor paid out. The accrued and frozen holiday will be administrated by a special Danish Fund and paid out to the employee when the employee leaves the Danish labour market, e.g. due to retirement or by moving abroad.

 

Impact Date 1 September 2019 to 31 August 2020
Employer Implications/Action Needed Employers should use the transition period to review holiday wording in employment agreements and company policies etc. Employers should also consider how to handle contractual holidays both during the so-called “short holiday year” from 1 May 2020 to 31 August 2020 and from the effective date of the new Holiday Act from 1 September 2020.
Employer Risk Failure to update the wording for contractual holidays in policies and contracts etc., will result in the employer granting employees the same amount of contractual holidays in the “short holiday year” as a full holiday year.

Contact

Anne Marie Abrahamson
Partner
+45 35252858
AMA@Lundgrens.dk

EU

Subject Matter/Name of Development Whistleblowing directive
Summary

A new directive provides EU-wide standards to protect workplace whistleblowers who reveal breaches of EU law in a wide range of areas. Whistleblowers are defined widely, including the self-employed, shareholders and those working for contractors and suppliers. Certain organisations, including private companies with 50 or more employees, will need to provide an internal confidential reporting channel and respond to reports within a defined time frame. The directive encourages internal reporting by whistleblowers while also permitting external reporting to competent authorities where, for example, the person considers there is a risk of retaliation. Reporting publicly is more limited. Qualifying whistleblowers, together with some third parties such as colleagues, are protected against work-related retaliation and dismissal. Whistleblowers are also immune from liability in certain circumstances.   A new directive provides EU-wide standards to protect workplace whistleblowers who reveal breaches of EU law in a wide range of areas. Whistleblowers are defined broadly, including the self-employed, shareholders and those working for contractors and suppliers. Certain organisations, including private companies with 50 or more employees, will need to provide an internal confidential reporting channel and respond to reports within a defined time frame. The directive encourages internal reporting by whistleblowers while also permitting external reporting to competent authorities where, for example, the person considers there is a risk of retaliation. Reporting publicly is more limited. Qualifying whistleblowers, together with some third parties such as colleagues, are protected against work-related retaliation and dismissal. Whistleblowers are also immune from liability in certain circumstances.

 

Impact Date Member states have until 17 December 2021 to transpose the directive into national law (there is a phased implementation for private sector employers with 50-249 workers to establish internal channels).
Employer Implications/Action Needed Less than half of EU countries (such as France, Hungary, Ireland, Italy, Netherlands and Sweden) provide comprehensive legal protection for whistleblowers. In other EU countries, protection is limited or applies to specific sectors or categories of employee. In addition, some EU legislation already regulates whistleblowing, such as in the financial services sector, and those rules will continue to apply. As a result, employers should anticipate significant change in some member states and should review their whistleblowing policies and procedures.
Employer Risk Once the directive is implemented, it will be more important than ever for employers to have confidential, responsive and trusted internal whistleblowing procedures which are managed by a named individual or department. If not, employers risk penalties and reputational damage, for example, where whistleblowers bypass internal channels to report their concerns externally. It will be for each individual member state to decide how the directive should be enforced and what the legal sanctions should be for non-compliance.
implemented, it will be more

Read more here

important than ever for
employers to have confidential,
responsive and trusted internal
whistleblowing procedures
which are managed by a named
individual or department. If not,
employers risk penalties and
reputational damage, for
example, where whistleblowers
bypass internal channels to
report their concerns externally.
It will be for each individual
member state to decide how the
directive should be enforced and
what the legal sanctions should
be for non-compliance.
Subject Matter/Name of Development Transparent and predictable working conditions directive
Summary

The directive updates and extends existing EU legislation on written statements for employees. It requires employers to expand the categories of workers who must be provided with a written statement, provide it earlier on in the employment relationship (key content must be provided within 7 days of commencing work) and increase the information contained in the statement. It also establishes new minimum rights for workers in an employment relationship (including zero hour contracts and contracts to work more than 3 hours on average per week), including: a right to reasonable advance notice of work for those working unpredictable patterns as well as compensation for any work cancelled with late notice; a right to request ‘more predictable and secure working conditions’; a 6 month limit on probationary periods (unless otherwise justified); limits on employers unjustifiably restricting employees from working for another employer; a right for compulsory training to be provided free of cost and to count as working time; and, protection from dismissal and retaliation for exercising these new rights.

Impact Date Member states have until 1 August 2022 to transpose the directive into national law.
Employer Implications/Action Needed All employers should expect to change their current practices relating to the provision of written statements to employees upon commencing work, as well as ensuring that those working abroad are provided with minimum additional information. In addition, those employers who are heavily reliant on casual and ‘gig’ workers should monitor how the new minimum rights are implemented locally in member states, given that the directive provides some flexibility as to how certain measures are transposed.
Employer Risk

 It will be for each individual member state to decide how it should be enforced and what the legal sanctions should be for non-compliance. The new provisions are expected to increase workers’ rights, as well as employer administration, costs and reduce flexibility. Whatever the legal consequences, there will also be reputational risks for defaulters. Employers should also be aware that the new EU Commission has expressed support for ensuring that ‘gig’/ platform workers have the same rights, including collective bargaining, as other workers.

Read more here

Subject Matter/Name of Development Work-life balance directive
Summary

A new directive has been agreed which covers paternity, parental and carers' leave as well as flexible working including: 10 working days' paternity leave (paid at least at the level of state sick pay), 4 months' parental leave (2 months are non-transferable and paid at a rate set by member states), 5 days' unpaid carers' leave per year and a right to request flexible working.  A new directive has been agreed which covers paternity, parental and carers’ leave as well as flexible working including: 10 working days’ paternity leave (paid at least at the level of state sick pay), 4 months’ parental leave (2 months are non-transferable and paid at a rate set by member states), 5 days’ unpaid carers’ leave per year and a right to request flexible working.

Impact Date Member states have until 2 August 2022 to transpose the directive into national law.
Employer Implications/Action Needed Employers should review any gaps between their existing work life balance policies and the new rights offered by the directive and consider how they will address any differences. Given the need to overlay the directive on top of existing provision in some member states, it will also be necessary for employers to understand how the directive will be implemented locally before finalising their response.
Employer Risk

Many EU states already offer family leave rights and the directive sets a new floor of minimum rights which can be enhanced and also allows for some flexibility on implementation (including certain details over the scope and conditions of the new leave rights). It will be for each individual member state to decide how it should be enforced and what the legal sanctions should be for non-compliance. Whatever the legal consequences, there will also be reputational risks for defaulters.

Read more here

Contact

Constanze Moorhouse
Partner
+44 122 344 3803
constanzemoorhouse@eversheds-sutherland.com

Finland

Subject matter/Name of Development New Working Hours Act
Summary The new Working Hours Act has entered into force. The new Act has a wider scope of application than the previous one and more employees are now included, with a list of positions falling out of scope (in those cases, provided that a new requirement of working time autonomy is fulfilled). The Act increases flexibility for agreements on working hours. 
Impact Date 1st January 2020
Employer Implications/Action Needed Employers should take into account the wider scope of the new Act in order to comply with its provisions. The new Act adds flexibility in working hours arrangements. More hours can be used to lengthen the regular daily working hours and flexitime can be used more flexibly. A new alternative working time arrangement – flexible working hours – has also been introduced, which can be applied by agreement between the employer and the employee. In addition, employees may decide on the place of work for at least half of the working hours and working hours banks can now be introduced in all work places.
Employer Risk The widening of the scope of application poses an increased risk of possible claims against employers for any breaches of the legislation.

Contact:

Timo Jarmas
Partner
+35 81 06 84 15 14
timo.jarmas@eversheds.fi

Germany

Subject matter/Name of Development Minimum wage for apprentices (Auszubildende)
Summary

As a result of the “Reform of vocational training for higher-skilled workers”, apprentices will now receive a minimum monthly allowance of € 515 in their first year of training, regardless of whether the training is provided internally or by an external training provider. This monthly rate is then set to increase from next year: to € 550 in 2021; to € 585 in 2022 and to € 620 in 2023. In subsequent years of training, this minimum rate will increase by an additional 18% in the second year, 35% in the third and 40% in the fourth year of training.

Impact Date 1 January 2020
Employer Implications/Action Needed The minimum wage only applies to apprentices who start their apprenticeship after 1 January 2020 . Employers should therefore amend their future apprentice contracts and ensure that the minimum wage is paid.
Employer Risk Non-compliance may lead to administrative fines of up to EUR 5,000.00
administrative fines of up to

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EUR 5,000.00
Subject matter/Name of Development Minimum wage increase
Summary

As of 1 January 2020 the minimum wage for employees has increased from EUR 9.19 gross to EUR 9.35 gross per hour.

Impact Date 1 January 2020
Employer Implications/Action Needed Employers must ensure that employees are paid a minimum of EUR 9.35 per hour worked.
Employer Risk Employers who do not comply with the minimum wage requirement may face administrative fines of up to EUR 500,000.00. In addition this may be a criminal offence, resulting in penalty fines and / or imprisonment of the responsible representative of the legal entity.
administrative fines of up to

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EUR 5,000.00
Subject matter/Name of Development  Changes to Data Protection Requirements
Summary

 From 21 November 2019 several changes have been made to the German federal regulations that implement the European General Data Protection Regulations (GDPR). Particular changes of note are:

– The requirement to have an operational data protection officer now excludes many smaller businesses. It is now mandatory to appoint an in-house data protection officer only where the employer’s workforce exceeds 20 employees

– Consent to data processing can now be given by e-mail

Impact Date 21 November 2019
Employer Implications/Action Needed Employer policies and practices should reflect these changes.
Employer Risk Despite the slight relaxation of data protection requirements made by these latest changes, employers need to ensure they comply with the legislation as potential penalties for breach can be significant.
administrative fines of up to

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EUR 5,000.00

Contact:

Frank Achilles
Partner
+4948 54 56 52 7
frankachilles@eversheds-sutherland.de

Hungary

Subject Matter/Name of Development  Employment of children under the age of 16 – changes to permission requirements
Summary The Labour Code no longer requires formal permission to be sought from the guardianship authority to employ those aged under 16 for any job meeting cultural, artistic, sport or advertising activities as legally defined. As of 1 January 2020, all that is required is a notification at least 15 days prior to commencement of employment.
Impact Date 1 January 2020
Employer Implications/Action Needed N/A
Employer Risk

No risk 

More info here

Subject Matter/Name of Development Amendments to eligibility for maternity/ adoption leave and unpaid parental leave under the Labour Code
Summary

A father can become eligible to take the 24 weeks’ maternity leave previously reserved for a mother who gives birth to or adopts a child, where a court order granting parental responsibility has been obtained following the mother’s death or because she has a health condition. Adoptive parents are now entitled to the same unpaid leave as birth parents for the purposes of taking care of the child. The duration of such unpaid leave is from the placement date until the child reaches the age of 3. Where a child is older than 3 years when placed for adoption, however, 6 months’ unpaid leave is available.

Impact Date 1 January 2020
Employer Implications/Action Needed Employers should review their maternity, adoption and parental leave policies to ensure they remain compliant with these changes to the Labour Code.
Employer Risk

Non-compliance may lead to the employer being fined.

More info here

the employer being fined.
Subject Matter/Name of Development Part-time employment for parents
Summary From the 1st January, employers are obliged to agree to a working parent’s request to work part-time hours. The right to make such a request lasts until the child reaches the age of 4, where there is 1 child and until the youngest child reaches the age of 6, where there are 3 or more children.
Impact Date 1 January 2019
Employer Implications/Action Needed Employers should be prepared to respond promptly to any such requests which meet the revised criteria.
Employer Risk

Non-compliance with labour regulations may result in the employer being fined.

More info here

Subject Matter/Name of Development Minimum wage increase
Summary

From 1 January 2020, the minimum wage has increased by 8% to HUF 161 000 (approx. EUR 485) per month. The minimum wage for employees who are working in a position that requires at least secondary school level education or training is now HUF 210 600 (approx. EUR 635) per month.

Impact Date 1 January 2020
Employer Implications/Action Needed Employers must ensure compliance with the new minimum wage rates. Modifications to individual employment contracts are not required if the changes are beyond the parties’ control (i.e. changes to the law).
Employer Risk

 Non-compliance with the updated minimum wage requirements may result in a fine of up to 10 million HUF (approx. EUR 30,000) by the labour authority upon inspection.

More info here

 Contact:

Katalin Varga
Partner
+36 (1) 394 31 21
varga@eversheds-sutherland.hu

Ireland

Subject Matter/Name of Development Update to National Minimum Wage
Summary The minimum wage in Ireland has increased from €9.80 to €10.10 for employees aged 20 and over. Employees below the age of 20 are entitled to receive between 70-90% of this amount dependent on age.
Impact Date 1 February 2020
Employer Implications/Action Needed Employers must ensure that employees are in receipt of the national minimum wage.
Employer Risk

Failure to provide the updated national minimum wage is a criminal offence under the National Minimum Wage Acts 2000 and 2015. Employees can make a complaint to the Workplace Relations Commission (“WRC”) in respect of such a failure and can also request that an inspection is carried out.

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Subject Matter/Name of Development Workers without a valid work permit may not be able to take cases to the WRC or the Labour Court (case law)
Summary

A recent Labour Court decision has found that non-EEA nationals who do not have a valid work permit cannot take claims to the WRC and the Labour Court as their contracts of employments are “tainted with illegality and therefore unenforceable in law”. The decision found that the only course of action available to workers is to seek compensation through the civil courts.

Impact Date December 2019
Employer Implications/Action Needed This decision could reduce the risk for employers who terminate an employee’s contract due to a lapse in their work permission. It further reduces the risk of WRC claims by any non-EEA nationals where they do not have a valid work permit.
Employer Risk N/A
Subject Matter/Name of Development

Draft legislation governing staff tipping expected to be enacted soon

Summary Draft legislation is progressing through the legislative process. It is proposed that: employers will be prevented from using tips to satisfy a person’s contractual wages; employers must display a policy on tips; workers will be entitled to receive tips paid in electronic form and employers must distribute tips in a fair, transparent and equitable manner.
Impact Date Not yet known
Employer Implications/Action Needed If enacted, employers in industries in which tips are commonplace will need to review their current tipping policies to ensure they are compliant.
Employer Risk This is yet to be outlined. It is likely that the consequence of failure to comply with the legislation will be claims to the WRC and/or criminal sanctions.
Subject Matter/Name of Development Legal representation in disciplinary proceedings (case law)
Summary

The matter of whether legal representation should be granted in a disciplinary process has been the subject of a number of decisions in recent years. The Supreme Court has now confirmed that legal representation during disciplinary proceedings will be required only in exceptional circumstances. The Court referred to various factors which should be considered before legal representation is warranted e.g. whether any points of law are likely to be raised, the seriousness of the charge or procedural difficulty.

Impact Date November 2019
Employer Implications/Action Needed Employers should consider the factors referred to in the Supreme Court decision if an employee requests legal representation in disciplinary proceedings.
Employer Risk Failure to provide legal representation, where warranted, could result in a finding that fair procedures have not been followed. This could potentially be fatal to a defence in an unfair dismissal case. Equally, granting legal representation where it is not warranted can make a disciplinary process very difficult.
Subject Matter/Name of Development Employment Permits (Amendment) Regulations 2019
Summary

The salary threshold for eligibility for a Critical Skills Employment Permit increased from €30,000 to €32,000 where an occupation is on the highly skilled occupations list and the individual has a relevant degree or qualification and from €60,000 to €64,000 where the individual has relevant experience. Additionally, to obtain a General Employment Permit or a Contract for Services Contract, the employer must advertise the vacancy on various networks for 4 weeks. (This had previously been 2 weeks). Employment permit applicants must now hold a passport valid for 6 months from the date of filing an employment permit application (previously, 12 months).

Impact Date 1 January 2020
Employer Implications/Action Needed Employers should take note of the changes to the monetary thresholds and advertising timeframes as these may impact future permit applications.
Employer Risk

Employers run the risk of employment permit applications being rejected if the increased remuneration thresholds are not met, or if advertisements for the purpose of the labour market needs test do not meet the increased duration thresholds.

More info here

Subject Matter/Name of Development Introduction of Parent’s Leave
Summary

Legislation governing a new type of family leave, parent’s leave, was signed into law in November 2019. The legislation provides that each parent may receive up to 2 weeks of parent’s leave which is to be taken within the first 12 months of the birth of the child. It applies to children born on or after 1 November 2019 and State Parent’s Benefit is available in respect of such leave.

Impact Date 1 November 2019
Employer Implications/Action Needed An increased number of employees may seek to take parent’s leave and employers must ensure that it can adequately resource for absences. The new state benefit does not preclude employers from enhancing the statutory pay or voluntarily paying employees during other family leave.
Employer Risk Failure to grant parent’s leave could lead to a claim to the WRC which could lead to an award of compensation of up to two weeks’ remuneration and/or an order that the leave be granted. Employers must ensure that employees are treated equally with regard to the provision of parent’s leave, and in particular with regard to any payment in respect of such leave, to mitigate the risk of an employment equality complaint to the WRC.

Contact:

Joanne Hyde
Partner
+35 31 66 44 25 2
joannehyde@eversheds-sutherland.ie

Italy

Subject Matter/Name of Development Deletion of former employees’ e-mail account.
Summary

The Italian Privacy Guarantor has recently determined that it is unlawful to retain company e-mail accounts of ex-employees.

Impact Date 21 December 2019
Employer Implications/Action Needed Employers should ensure that prompt deletion of ex-employees’ company e-mail accounts takes place as soon as the employment relationship ends.
Employer Risk Non-compliance may result in a warning from the Privacy Guarantor, followed by more severe sanctions in the event of continued noncompliance.
Subject Matter/Name of Development Employment regulation for so-called “riders”.
Summary Recent legislation has introduced a new legal definition of so-called “riders”, hired to deliver goods through delivery instructions given via digital platforms. These workers are described as “self-employed workers who deliver goods on behalf of others, in urban areas and with the help of bicycle or motor vehicles, through platforms, including digital platforms”. The legislation provides stronger measures to increase protection for such riders. Those protections include a mandatory written form of the employment contract and the determination of the minimum compensation remitted to collective bargaining agreements (which, however, do not exist to date). Riders will also receive a supplementary allowance of not less than 10% for work performed at night, during holidays or in adverse weather conditions.
Impact Date 3 November 2019
Employer Implications/Action Needed Employers should ensure that they review employment practices concerning workers who may come within the definition of riders and ensure they are compliant with the new provisions.
Employer Risk Employers may be at risk of possible claims for non-compliance with the rules regarding subordinate employment contracts.
Subject Matter/Name of Development  Reduction in social security contributions for new hires.
Summary Budget Law 2020 has provided a reduction in employer’s social security contributions for new hires, if certain requirements are met. In particular: (i) companies with up to 9 employees: 100% reduction of contributions for the first 3 years of the contract for 1st level apprentices; (ii) private-sector employers: 50% reduction of contributions up to a maximum of EUR 3,000per year , when hiring employees under 35 years old on open term contracts; and (iii) private-sector employers: 50% reduction of contributions up to a maximum of EUR 8,000 per year, when hiring employees under 30 years old that fall within the definition of “outstanding graduates”. The reductions are subject to implementation measures.
Impact Date 1 January 2019
Employer Implications/Action Needed Employers should make use of applicable reductions once implemented
Employer Risk In order to safeguard against companies dismissing existing workers and replacing them with “subsidised workers”, certain safeguards are included in the new legislation. In particular, the reduction of the cost of the social security contribution is excluded or nullified in certain circumstances where dismissals are made.
Subject Matter/Name of Development Reduction to contributions paid to “Inail” (National Institute for Insurance against Accidents at Work).
Summary  Budget Law 2020 has extended the reduction of premiums and contributions for compulsory insurance against accidents at work and occupational diseases until 2022. The reduction amount will be established by Decree of the Minister of Labour and Social Policy, in agreement with the Minister of Economy and Finance.
Impact Date 1 January 2019
Employer Implications/Action Needed Employers should make use of applicable reductions once implemented.
Employer Risk None
Subject Matter/Name of Development Extension of the so-called “A.P.E. sociale”.
Summary

Budget Law 2020 has extended the so-called “A.P.E. sociale” for the current year. This is a fully state subsidised scheme which allows certain categories of employees, including those who are disabled or undertaking heavy duties, to retire early. The following criteria must be met to be eligible: (i) must be at least 63 years old; and (ii) have at least 30 years of social security contributions (or 36 years of social security contributions for employees that have been assigned to “heavy work” for a certain number of years)

Impact Date 1 January 2020
Employer Implications/Action Needed Employers should ensure that their pension arrangements take account of the extended scheme.
Employer Risk None
Subject Matter/Name of Development Compulsory paternity leave for private sector employees.
Summary

The Budget Law 2020 has stated that, in the private sector, compulsory paternity leave will be further extended for 2020 with an increase from the current five days to seven days.

Impact Date 1 January 2020
Employer Implications/Action Needed Employers operating in the private sector should ensure that paternity leave policies are reviewed and updated as appropriate to ensure compliance with the extended right.
Employer Risk None

Contact:

Marcello Floris
Partner
+39 02 892 871
marcellofloris@eversheds-sutherland.it

Valentina Pomares
Partner
+39 02 892 871
valentinapomares@eversheds-sutherland.it

Netherlands

Subject Matter/Name of Development

Implementation of the Revision Posting of Workers Directive

Summary A draft legislative proposal has been published to implement the new European “Revision Posting of Workers Directive”. The changes in Dutch law will include provisions on accommodation and supplementary allowances for posted workers, with additional provisions applying if a posted worker has worked in the Netherlands for more than 12 months (which can be extended to 18 months under certain conditions).
Impact Date 30 July 2020 (expected at this time)
Employer Implications/Action Needed Employers should be aware of the expected upcoming changes regarding cross-border posted employees.
Employer Risk Failure to comply may result in fines imposed by the Inspectorate SZW of (currently) EUR 21,750 gross, which may be increased by 100-200 % for each repeated breach and/or depending on the seriousness of the breach.
Subject Matter/Name of Development Online notification of cross-border posted employees
Summary For secondments commencing on or after 1 March 2020, employers who second an employee from a country within the European Union, Liechtenstein, Norway, Iceland, Croatia or Switzerland to the Netherlands, must submit advance online notification to the Ministry of Social Affairs about where, when and with whom the seconded (‘posted’) employee will provide services. The website dedicated to the notification is expected to be launched on 1 February 2020. Certain exceptions and exemptions apply to the notification requirement.
Impact Date

1 March 2020

Employer Implications/Action Needed Employers must ensure that they submit notifications for cross-border posted employees in time.
Employer Risk Failure to comply risks fines imposed by the Inspectorate SZW of (currently) EUR 21,750 gross, which may be increased by 100 - 200 % for each repeated breach and/or depending on the seriousness of the breach.
Subject Matter/Name of Development New unemployment benefits premium
Summary The Minister of Social Affairs and Employment has announced a grace period until 1 April 2020 for the implementation of the administrative requirements which follow from the new system of a high and a low unemployment benefits premium. Employers now have until 1 April 2020 to ensure that for employees employed prior to 1 January 2020 under an indefinite term employment contract (not an on-call contract) that has not been agreed upon in writing, they have in place either a written indefinite term employment contract or a written addendum to the employment contract signed by both parties. Provided that the administrative requirements are met prior to 1 April 2020, employers can in the meantime apply the low unemployment benefits premium to these employees.
Impact Date

1 January 2020

Employer Implications/Action Needed Employers should review whether the grace period applies to current employment contracts, ensure that the administrative requirements for the low unemployment benefits premium rate are met prior to 1 April 2020 and apply the low unemployment benefits premium, if applicable.
Employer Risk Failure to review whether the grace period applies may result in higher costs due to a higher unemployment benefits premium rate being paid instead of the low unemployment benefits premium.
Subject Matter/Name of Development State pension age (“AOW”-age) remains 67 years in 2025
Summary The Minister of Social Affairs and Employment recently confirmed that the state pension age (“AOW”-age) will remain at 67 years in 2025.
Impact Date

1 January 2025

Employer Implications/Action Needed If the employment contract includes a pension clause referring to the state pension age as the retirement age, this may involve a change in the retirement date for the employee. Employers should review any references made to pensions within their employment contracts
Employer Risk As the AOW-age will not increase at the expected pace, failure to check which AOW-age applies to employees may result in employees continuing to work after they have reached the AOW-age. In that event, the employee could seek to maintain that the employer has implicitly given the employee a new employment agreement and cannot terminate the employment agreement for the reason that the employee has reached the AOW-age. The employer must then turn to the court (or the UWV) to request permission for termination.
Subject Matter/Name of Development Minimum Rate of Pay for Independent Contractors Act
Summary Draft legislation has been published (“Minimum Rate of Pay for Independent Contractors Act”), which states that independent contractors will be entitled to a minimum wage of EUR 16 per hour. Independent contractors earning more than EUR 75 per hour will be able to work under an independent contractor's certificate. Further, the draft legislation includes several administrative requirements to give more certainty in the arrangement, including the provision of a written overview, including expected costs for the work and invoice timing.
Impact Date

1 January 2021 (expected at this time)

Employer Implications/Action Needed Employers must ensure that independent contractors are reimbursed at the correct (minimum or above) rate and comply with the applicable administrative obligations.
Employer Risk Failure to pay the correct rate or to comply with the administrative obligations risks fines imposed by the Dutch Inspectorate SZW which can vary from EUR 4,150 - 83,000 gross and/or retrospective levies imposed by the Dutch Tax Authority.

Contact:

Ingrid van Berkel

Wijnand Blom

Partner Partner
+31 10 24 88 04 6 +31 20 5600 608
ingridvanberkel@eversheds-sutherland.com wijnandblom@eversheds-sutherland.nl

Norway

Subject Matter/Name of Development Repeal of the Restructuring Act
Summary The Restructuring Act currently requires companies that are closing down their business to notify the county authority before the closure process can begin. From 1 January 2020 this Act (and consequently the notification requirement) is repealed and the applicable redundancy provisions for business closures will be as set out in the Employment Act.
Impact Date 1 January 2020
Employer Implications/Action Needed Employers who plan to close down their business will no longer have to notify the county authority.
Employer Risk None.
Subject matter/Name of Development Changes to whistleblower legislation
Summary From 1 January 2020 new whistleblower regulations entered into force. The new regulations require employers to follow up reports from whistleblowers within a reasonable timeframe. Employers are also obliged to ensure a safe and proper working environment for the whistleblower and will be liable for the financial loss of a whistleblower in the event of a breach of these requirements. The scope of the rules also now extends to pupils, students, patients and the military.
Impact Date 1 January 2020
Employer Implications/Action Needed Employers should update their company whistleblower policy in readiness for these changes to ensure compliance with the revised legislation.
Employer Risk Failing to comply with the new requirements may result in liability for financial loss and non-economic loss of the employee.

We thank Sten Foyn and Martin Haukland from Haavind Law Firm for the Norwegian update.

Contact

Sten Foyn
Partner
 +47 928 35 278
s.foyn@haavind.no

Poland

Subject Matter/Name of Development Employer fines related to an employee’s non-payment of child maintenance
Summary An amendment to the Labour Code provides that an employer will be fined if it has not provided a written employment contract to an employee who then falls into arrears with their child maintenance payment obligations. An employer who pays an employee a higher salary than expressed in their employment contract will also be fined.
Impact Date 1 December 2019
Employer Implications/Action Needed Employers should ensure they deduct any obligatory child maintenance from an employee’s pay and ensure that such an employee’s remuneration is accurately recorded in a written employment contract.
Employer Risk Non-compliance with these new provisions exposes employers to a fine ranging from PLN 1,500 to 45,000 (approx. EUR 350 to EUR 10,600).
Subject Matter/Name of Development Minimum wage increase for 2020
Summary From 1 January 2020, there will be an increase in the minimum wage from PLN 2,250 to PLN 2,600 gross per month. The new minimum hourly rate for civil law contracts will increase from PLN 14.70 to PLN 17 gross.
Impact Date 1 January 2020
Employer Implications/Action Needed Employers must ensure that all employees and civil law contractors receive at least the new minimum wage rates and, if necessary, adjust employment agreements and civil contracts to reflect the new requirements.
Employer Risk Paying below minimum wage levels is an offence sanctioned with a fine ranging from PLN 1,000 to PLN 30,000 (approx. EUR 230 to EUR 7,000).
Subject Matter/Name of Development New employee retirement savings plan - Employee Capital Plans
Employee Capital Plans

Summary Legislation for a new voluntary retirement savings plan known as Employee Capital Plans (PPK) is being rolled out. Employers are expected to contribute 1.5% (and may contribute up to 4%) of salary to the PPK and participants contribute 2% (and may contribute up to 4%). The employees may decide to opt out from the plan, but they will be re-enrolled in the plan every 4 years.
Impact Date Phased introduction from 1 July 2019 - 1 January 2021
Employer Implications/Action Needed The new regulations will be phased in gradually, depending on the size of the employer: employers with at least 250 employees - from 1 July 2019; employers with 50-249 employees – from 1 January 2020; employers with 20-49 employees – from 1 July 2020 and all other employers – from 1 January 2021.
Employer Risk Non-compliance may result in a fine, for example, up to 1.5% of the remuneration fund for a failure to sign a PPK management contract with a financial institution. Additionally, a failure to make payments on time can result in fines from PLN 1,000 to 1,000,000.

Contact:

Ewa Lachowska-Brol
Partner
+48 22 50 50 79 7
ewa.lachowska-brol@eversheds-sutherland.pl

Romania

Subject Matter/Name of Development Draft legislation may affect future employment practice
Summary

The wide scope of the draft legislation provides that:

– employers would be obliged to provide human resources and payroll services internally via their employees or must outsource these functions to an appropriate external provider

– individual labour agreements may specify that an individual labour dispute shall be the subject of conciliation, the conciliation procedure taking no longer than 10 days. If the dispute is not finalised through the conciliation procedure, the dispute may proceed to court

– at the conclusion, amendment or termination of an employment contract, the parties may be assisted by a lawyer, an employment expert or by any other person of their choice

– the parties may conclude a confidentiality agreement at the conclusion of or during the employment

– the employer would be obliged to nominate a person, a committee or an investigator to conduct a disciplinary investigation

Impact Date The law is in draft form and is not yet in force.
Employer Implications/Action Needed No action needed at present.
Employer Risk None at this time.
Subject Matter/Name of Development Proposed changes to fines for non-payment of overtime
Summary The draft law (which is currently undergoing Parliamentary re-examination) would provide that the fine applicable to employers who fail to pay adequate overtime pay to their employees would be imposed in respect of each affected employee. The current relevant legal provisions specify that non-compliance with the overtime provisions is an administrative offence and can result in a fine between RON 1,500 – 3,000 (approx. 300 – 600 EUR). The fine does not currently deal with each act of unlawful overtime separately.
Impact Date
The law is still in draft
form and is not yet
in force.
The law is still in draft form and is not yet in force.
Employer Implications/Action Needed No action needed at this time.
Employer Risk If the draft law is brought into force, noncompliance may trigger a fine ranging from RON 1,500 to RON 3,000 (approx. 300-600 EURO) for each individual identified as carrying out unlawful overtime.
Subject Matter/Name of Development Nursery Tickets
Summary From October 2019, the value of nursery tickets offered to employees has increased to RON 460.
Impact Date 16 October 2019
Employer Implications/Action Needed Employers must ensure that the value of nursery tickets offered to employees is increased to the new amount.
Employer Risk No risk
Subject Matter/Name of Development Increase to minimum pay
Summary As of 1st of January 2020, the minimum gross salary has increased to RON 2,230/ month (approx. 466 EURO). By way of exception, a higher minimum rate (RON 2,350 per month or approx. 491 EURO) applies to employees assigned to higher-education positions and with at least one year’s experience in their field.
Impact Date 1 January 2020
Employer Implications/Action Needed Employers should ensure that these increases are reflected in the salary of their employees in order to comply with the new salary requirements, if necessary.
Employer Risk Non-compliance with the new amount of the national minimum gross salary requirements may trigger a fine ranging from RON 300 to RON 2,000 (up to 400 EURO) as well as a claim for recovery of the shortfall by the employee.

Contact:

Mihai Guia
Partner
+40 21 31 12 56 1
mihaiguia@eversheds.ro

Russia

Subject Matter/Name of Development Amendments to legislation regulating the use of digital documents in employment contracts
Summary

A bill to regulate legal correspondence between the parties to an employment agreement has been introduced. It will be possible to send correspondence online in all cases where labor legislation requires that the document be sent in written form (e.g. notifications, applications, requests, etc.). If the bill is adopted, the parties will also be able to conclude employment agreements by exchanging the agreed terms in electronic form.

Impact Date It was planned that the amendments would take effect from 1 October 2019. However, the bill has not yet been considered by Russian State Duma.
Employer Implications/Action Needed No actions are required at this stage.
Employer Risk None anticipated. This procedure is intended to simplify the document flow for employers.
Subject Matter/Name of Development Obligation to collect employee work history in electronic form
Summary

The Russian Government has approved a set of draft laws requiring employers to collect an employee’s work history in electronic format, removing the various access and other problems related to paper records. From January 1, 2021, an employer will not be required to complete the standard paper employment record book unless an employee requests this in writing. However, the employer will be required to provide information about the employees’ work experience to the Russian Pension Fund in electronic form. This will involve completion of a new section, “Information about labor activity”, by the employer’s HR department with information about an individual’s employment, dismissals, specialisations, profession, qualifications, etc.

Impact Date 1 January 2021
Employer Implications/Action Needed Whilst both paper and electronic recordkeeping remain permissible, employers will need to be prepared to send the required “Information about labor activity” to the Russian Pension Fund in electronic format.
Employer Risk Administrative responsibility will be introduced for employers and may lead to enforcement action where employers have repeatedly failed to provide information, or provide inaccurate, incomplete information about the work activities of their employees to the Russian Pension Fund.

Contact:

Victoria Goldman
Partner
+78 12 36 33 37 7
victoria.goldman@eversheds-sutherland.ru

Slovakia

Subject Matter/Name of Development New tax benefit for employers providing accommodation
Summary
Recent amendments to income tax legislation have introduced a tax benefit for employers with more than 49 employees who provide accommodation for employees in Slovakia. In many cases such accommodation is now tax exempt (up to EUR 100 or EUR 350 per month, dependent on the employment duration).
Impact Date 1 January 2020
Employer Implications/Action Needed If employers provide accommodation for their employees in Slovakia, it is advisable that they notify their tax advisors.
Employer Risk No risks
Subject Matter/Name of Development Increase in minimum wage
Summary The minimum wage of employees paid monthly has increased from EUR 520 to EUR 580. The minimum hourly wage was increased from EUR 2.98 to EUR 3.33.
Impact Date 1 January 2020
Employer Implications/Action Needed Employers must ensure that the increased minimum wage rates are implemented.
Employer Risk Employers may face penalties of up to EUR 100,000 if they do not comply with minimum wage legislation.
Subject Matter/Name of Development Amendment to the calculation of workers’ accident compensation
Summary The principal method for calculating lost earnings as a result of a workplace accident was deemed unconstitutional by the Slovak Constitutional Court in 2019. As a result, a new method for calculating compensation must be applied which compensates for the difference in average earnings before the accident and income after the accident.
Impact Date 1 December 2019
Employer Implications/Action Needed Where accident compensation is relevant going forwards, employers will need to ensure it meets the new criteria.
Employer Risk Failure to pay adequate compensation may lead to a claim for any shortfall.
Subject Matter/Name of Development Increased annual leave for parents
Summary Employees with childcare responsibilities now have 5 weeks of annual leave regardless of their age. Previously, the statutory annual leave regulation applied an age criterion to periods of leave (a longer period applying to employees aged above 33 years). The recent changes disapply this criterion for employees with childcare responsibilities who, regardless of their age, are now entitled to 5 weeks of annual holiday. This applies to both parents whether or not they are living in the same household.
Impact Date 1 January 2020
Employer Implications/Action Needed From 1 January 2020 holiday entitlement of all employees should be reviewed against any parental responsibilities, rather than age.
Employer Risk A financial penalty of up to EUR 100,000 may be imposed if incorrect holiday entitlement is applied.

Contact

Helga Maďarová
Senior Associate
helga.madarova@eversheds-sutherland.sk

Spain

Subject Matter/Name of Development Supreme Court ruling on working time
Summary A recent supreme court decision held that, on the facts of the particular case concerning firefighters working at an airport, time spent travelling from the airport entrance to job locations could not be considered working time. This was on the basis that the firefighters were not at their employer’s disposal during their routine journeys to work.
Impact Date 19 November 2019 (date of Supreme Court ruling)
Employer Implications/Action Needed Employers should be aware of this ruling and consider how it may apply to working time policies within their organisation.
Employer Risk N/A

Contact:

tbc
Partner
+46 85 45 32 28 8
perwestman@eversheds-sutherland.se

Sweden

Subject Matter/Name of Development Increase to the maximum amount of corporate fines
Summary The maximum amount of corporate fines has increased from SEK 10 million to SEK 500 million (approx. 48 million EURO) for larger companies where more serious crimes have been committed in the exercise of business activities. A larger company is identified as one whose transferable securities are trading on a regulated or equivalent market outside the EEA, or a company that fulfils more than one of the following conditions: i) the average number of employees in the company during each of the last two financial years has been more than 50; ii) in the previous two financial years, the company’s reported total assets were more than SEK 40 million (approx. 3.8 million EURO); and/or iii) the company’s reported net sales for each of the last two financial years were more than SEK 80 million (approx. 7.6 million EURO). Please note that when assessing if a company is a larger company, only the financial position of the particular legal entity is to be taken into account and not the company group.
Impact Date 1 January 2020 
Employer Implications/Action Needed Employers are at risk of receiving a substantial corporate fine if any crime is committed when conducting business activities relating to Employment Laws (e.g. breaches of the Work Environment Act).
Employer Risk

A court can impose a much larger maximum corporate fine if an employer is deemed to be a larger company and the crime committed is more severe.

More info here

Subject Matter/Name of Development Increase to the retirement age
Summary The general retirement age will be increased from 67 to 68 years old and at a later stage to 69 years old. Under Swedish law, an employee is entitled to remain in their employment up until retirement age. Also, employers will no longer be obliged to base a termination of employment on objective grounds for employees who have reached retirement age.
Impact Date 1 January 2020 and 1 January 2023
Employer Implications/Action Needed Employees will be entitled to remain in their employment for a longer period.
Employer Risk
A court can declare a termination of
employment before the retirement age
invalid and hold the employer liable for
damages.

A court can declare a termination of employment before the retirement age invalid and hold the employer liable for damages.

More info here


Contact:

Per Westman
Partner
+46 85 45 32 28 8
perwestman@eversheds-sutherland.se

Switzerland

Subject Matter/Name of Development Period for raising personal injury claims is considerably extended
Summary As of 1 January 2020, the maximum statutory limitation period for personal injury claims has been extended from 10 years to 20 years. This applies to both contractual and non-contractual liability for personal injury or manslaughter. This legislative change is relevant for employers in relation to work related accidents.
Impact Date 1 January 2020
Employer Implications/Action Needed Extend the retention period for documents related to an occupational accident to 20 years and review insurance provision.
Employer Risk The period of exposure to claims for damages has increased by 10 years. There is a risk that important pieces of evidence may be destroyed too early, if an extended retention period is not applied.
Subject Matter/Name of Development Increase to employment social insurance contributions
Summary As of 1 January 2020, the AHV (old-age and survivor’s insurance) contributions, payable jointly by the employer and the employee, have increased to 8.7% i.e. 4.35% each by the employer and employee (from the previous rate of 8.4%). As a result, the total combined contribution rate for the AHV/IV/EO social insurances has increased from 10.25% to 10.55%.
Impact Date 1 January 2020
Employer Implications/Action Needed Employers must inform employees of the consequential (small) reduction in their net salary (provided that the parties agreed on a gross salary, which is the predominant standard in Switzerland).
Employer Risk Non-compliance will lead to potential disputes and/or shortfalls in these mandatory insurance contributions.
Subject Matter/Name of Development Working time recording (case law)
Summary

A Federal court decision has held that self-employed and employed taxi drivers must be treated equally with regard to working time and, more specifically, work time recording. Self-employed taxi drivers must therefore record their entire working time according to the working and rest time regulations, including waiting time between fares.

Impact Date Immediate
Employer Implications/Action Needed Transport service providers must ensure that employee work is registered in the correct categories in the tachograph but the case serves as a broader reminder that all time recording at work must properly reflect working time.
Employer Risk Risk of prosecution and a fine in the event of (multiple) violations of the working and rest time regulations. A fine may be imposed against the employee as well as the employer enabling or inducing the breaches.
Subject Matter/Name of Development
Employer’s liability for mental health risks (case
law)
Employer’s liability for mental health risks (case law)
Summary

Employers have a duty of care towards employees, including taking appropriate and specific measures to protect their employees’ health. The court recently held that repeated concerns raised by the employee that her mental health was being adversely affected by work provided the employer with sufficient evidence of a potential work-related health hazard warranting an occupational health examination and specific measures to protect the employee’s health appropriately.

Impact Date Immediate
Employer Implications/Action Needed Employers should ensure that they are taking appropriate measures to protect the health of their employees, particularly where specific concerns are raised.
Employer Risk Employers that fail to comply with their duty of care towards employees may face fines and an increase of claims from employees.

Contact:

Peter Haas
Partner
+41313287530
peter.haas@eversheds-sutherland.ch

UK

Subject Matter/Name of Development Brexit (UK wide)
Summary

The UK left the EU on 31 January 2020, with a transition period. Uncertainly remains regarding future labour law strategy. From an immigration perspective, a new Australian-style points-based system is expected to be introduced, with bespoke visa schemes for other non-sponsored migrants.

Impact Date 31 January 2020 onwards
Employer Implications/Action Needed Employers should review current sponsor licences and ensure that its worker EEA citizens in the UK apply for settled UK status via the EU Settlement Scheme before 31 December 2020.
Employer Risk Uncertainty and difficulties in retaining workers.
Subject Matter/Name of Development New contract terms and increased reference period for calculating holiday pay (England, Wales & Scotland only)
Summary

All new employees and workers engaged on or after 6 April 2020 will be entitled to receive a statement of terms and conditions of engagement (“section 1 statement”). The information to be provided in the section 1 statement is extended from that currently required. Further, the reference period for determining an average weeks’ pay will increase from 12 weeks to 52 weeks (or the number of complete weeks the worker has been engaged if they have worked a part-year).

Impact Date 6 April 2020
Employer Implications/Action Needed Employers should review their current section 1 statements (or employment contracts if section 1 statements are incorporated) and holiday pay calculation arrangements. It should be noted that the changes regarding the entitlement to receive a section 1 statement are not retrospective, so only apply to new engagements. However, current workers will also be entitled to request a section 1 statement (including the new, additional information) and such requests must be complied with within one month.
Employer Risk Failure to correctly calculate holiday pay and/or provide a section 1 statement, or one that meets the requirements, may give rise to employment tribunal claims, with resulting litigation time and costs.
Subject Matter/Name of Development

New tax rules to apply to engagements via personal service companies (“PSC”) (UK wide)

Summary

Medium and large organisations engaging the services of ostensibly self-employed contractors through a PSC will become responsible for determining a worker’s employment status, sharing that determination with reasons and, in some cases, deducting employment taxes and paying them to HRMC on behalf of the worker.

Impact Date Further announcements expected in February/ March, however currently expected to be 6 April 2020
Employer Implications/Action Needed Employers engaging workers through a PSC will need to plan ahead and communicate with affected parties to manage expectations. Increased tax liabilities could result, raising overall costs. Employers must be in a position to collate sufficient information about workers to assess IR35 status.
Employer Risk Non-compliance will be costly, including HMRC seeking to recover unpaid taxes from the service-user.
Subject Matter/Name of Development National Living Wage changes (UK wide)
Summary The statutory minimum wage limits are set to increase significantly over the next four years as a result of the Conservative Party pledge to increase rates to two thirds of median earnings, currently forecast to be £10.50 per hour, and to extend it to all workers over the age of 21 by 2024. As a first step towards achieving this, the statutory minimum rate will increase by 6.2% from 1 April 2020 to £8.72 for over 25 year olds.
Impact Date 1 April 2020 onwards
Employer Implications/Action Needed Employers should review pay rates and payroll practices to ensure compliance with the calculation rules and increased limits
Employer Risk The changes to minimum wage limits will bring more workers and employers within the scope of those limits and the legislation’s complex technical rules. Often, employers do not appreciate how their current payroll practices make them vulnerable to inadvertently breaching the rules. Enforcement action arising out of breaches is increasing, resulting in increased financial and reputational risk.
Subject Matter/Name of Development Anticipated changes to bereavement, parental and maternity/adoption leave rights (England, Wales & Scotland only)
Summary Legislation is expected to provide additional rights to allow parents to: take two weeks leave following the loss of a child under the age of 18 or stillbirth after 24 weeks of pregnancy; extended leave for neonatal care; one weeks’ unpaid carers leave; and an extended redundancy protection period during which an employee on maternity or adoption leave must be offered suitable alternative employment (if it exists).
Impact Date Bereavement leave: 6 April 2020, no date for the other changes
Employer Implications/Action Needed Employers should be alert to further details on the proposals. In the meantime, review current policies.
Employer Risk Failure to implement the changes could result in grievances and potential litigation.
Subject Matter/Name of Development Changes to agency worker arrangements (England, Wales & Scotland only)
Summary The Swedish Derogation will be repealed, meaning that there will no longer be any exception to the requirement for all agency workers to be provided with pay parity after 12 weeks. In addition, those engaging agency workers will be required to provide a “key information document” setting out the terms under which the worker will undertake the work.
Impact Date 6 April 2020
Employer Implications/Action Needed Employers should review existing arrangements with employment businesses to ensure compliance.
Employer Risk Failure to comply with the new requirements could result in liability for both employment businesses and hirers.
Subject Matter/Name of Development Introduction of Early Conciliation in Northern Ireland (to bring this in line with England, Wales & Scotland)
Summary Anyone who wishes to lodge a claim with the Industrial or Fair Employment Tribunal must first notify the Labour Relations Agency and discuss the option of Early Conciliation. Potential claimants will not be able to proceed to Tribunal without at least considering this option.
Impact Date 27 January 2020
Employer Implications/Action Needed Employers should consider nominating someone internally to take Early Conciliation calls from the LRA. In addition the time limit for lodging claims will now also be extended so this should be taken into account.
Employer Risk Low risk, and the early conciliation process may help serve to limit the number of Tribunal claims issued in Northern Ireland.

NB: This update covers England, Wales and Scotland. It does not cover developments that apply only in Northern Ireland

Contact:

Diane Gilhooley
Partner
+44 161 831 8151
dianegilhooley@eversheds-sutherland.com

Middle East Global Update Banner

UAE

Subject Matter/Name of Development ADGM New Employment Regulations in force as of 1 January 2020
Summary

The Abu Dhabi Global Market (“ADGM”) has issued new employment regulations (the “New ADGM Employment Regulations”), which came into force on 1 January 2020. Key changes include:- (i)Changes to statutory minimum notice periods; (ii)The introduction of overtime compensation for employees who work more than 832 hours over a reference period of four months (excluding work carried out on national / public holidays that fall on a usual working day); (iii)New rules in respect of fines and compensation limits; and (iv)Reduction in sick pay.

Impact Date 1 January 2020.
Employer Implications/Action Needed

Employers should familiarise themselves with the changes and update employment contracts and/or policies and/or procedures.

Employer Risk

Increased risk of claims if employers apply the wrong law or act in contravention of it.

More info here

Subject Matter/Name of Development Abolition of the End of Service Gratuity (“ESG”) in the Dubai International Financial Centre (“DIFC”)
Summary

 

On 14 January 2020, the DIFC announced that the legislation has been ratified which will implement its proposal to replace ESG with an obligation on employers to enrol DIFC employees into a workplace scheme and make mandatory minimum contributions. 

From 1 February 2020, employees will cease to accrue ESG and will instead be entitled to receive payments into a Qualifying Scheme (i.e. a monetary purchase scheme which complies with the legislation). Employers have until 31 March 2020 to enrol employees and must make the first payments into the scheme by 21 April 2020. These payments will include any back payments to 1 February 2020. 

Employees’ accrued ESG up to 1 February 2020 will be preserved and employees who have less than a year’s service will have their entitlement calculated on a pro-rata basis. Accrued ESG can either be calculated and paid out on termination of the employee’s employment (applying their salary as at the termination date) or it can be paid into the Qualifying Scheme either with or without employee consent. If the ESG is paid into the Qualifying Scheme with the employee’s consent then the employer’s obligations in respect of such accrued ESG will have been satisfied. However, if the employer transfers accrued ESG into the Qualifying Scheme without the employee’s consent, the employer will be obliged to make up any difference on termination of employment between the amount transferred and the amount the employee would have been entitled to (i.e. the investment risk remains with the employer). 

There are some categories of employees who will be exempt (for example, employees who are enrolled in the UAE/GCC state pension scheme, employees on secondment and employees serving notice)

On 14 January 2020, the DIFC announced that the legislation has been ratified which will implement its proposal to replace ESG with an obligation on employers to enrol DIFC employees into a workplace scheme and make mandatory minimum contributions. 

From 1 February 2020, employees will cease to accrue ESG and will instead be entitled to receive payments into a Qualifying Scheme (i.e. a monetary purchase scheme which complies with the legislation). Employers have until 31 March 2020 to enrol employees and must make the first payments into the scheme by 21 April 2020. These payments will include any back payments to 1 February 2020. 

Employees’ accrued ESG up to 1 February 2020 will be preserved and employees who have less than a year’s service will have their entitlement calculated on a pro-rata basis. Accrued ESG can either be calculated and paid out on termination of the employee’s employment (applying their salary as at the termination date) or it can be paid into the Qualifying Scheme either with or without employee consent. If the ESG is paid into the Qualifying Scheme with the employee’s consent then the employer’s obligations in respect of such accrued ESG will have been satisfied. However, if the employer transfers accrued ESG into the Qualifying Scheme without the employee’s consent, the employer will be obliged to make up any difference on termination of employment between the amount transferred and the amount the employee would have been entitled to (i.e. the investment risk remains with the employer). 

There are some categories of employees who will be exempt (for example, employees who are enrolled in the UAE/GCC state pension scheme, employees on secondment and employees serving notice).

Impact Date 1 February 2020.
Employer Implications/Action Needed

Mandatory obligation on employers to enrol employees into a Qualifying Scheme and to make contributions into that scheme.

Employer Risk

A fine of USD 2,000 can be imposed if an employer contravenes the new provisions.

More info here

Contact:

Geraldine Ahern
Partner
+9712 494 3632
geraldineahern@eversheds-sutherland.com

North America Global Update Banner

USA

Subject Matter/Name of Development

Nevada Paid Leave Law

Summary Private employers with 50 or more employees in Nevada may have to provide employees with up to 40 hours of paid leave per benefit year.
Impact Date 1 January 2020
Employer Implications/Action Needed Employers in Nevada should assess whether they are covered by the law, and, if they are, ensure that employees are receiving the paid leave.
Employer Risk Employees may bring claims if the obligations are not complied with. Employers face risk of fines if found to be in breach.
Subject Matter/Name of Development Threshold increase for overtime exemption
Summary The US Department Of Labor’s increased salary threshold for “white collar” exemptions to the overtime rule took effect on 1 January 2020. In addition to looking at the job responsibilities assigned to an exempt employee, employers must also ensure that they are paying such employees at or above the new salary threshold of $684 per week ($35,568 annually) or, for Highly Compensated Employees, $107,432 per year.
Impact Date 1 January 2020
Employer Implications/Action Needed

The US Department Of Labor’s increased salary threshold for “white collar” exemptions to the overtime rule took effect on 1 January 2020. In addition to looking at the job responsibilities assigned to an exempt employee, employers must also ensure that they are paying such employees at or above the new salary threshold of $684 per week ($35,568 annually) or, for Highly Compensated Employees, $107,432 per year.

Employer Risk Breach of the Fair Labor Standards Act may result in criminal prosecutions and fines.
Subject Matter/Name of Development Minimum wage increases
Summary Several states, including Massachusetts, Washington and Florida, have increased their minimum wage rates.
Impact Date January 1, 2020
Employer Implications/Action Needed

Employers should review the minimum wage rates for the states in which they operate and ensure compliance.

Employer Risk Whilst the specific risk depends on state law, non-compliance may generally result in penalties and back pay.
Subject Matter/Name of Development Joint Employer Test
Summary

The Department of Labor will apply a four-factor balancing test to assess whether a business is a joint employer, namely whether the entity:

– hires or fires the employee

– supervises and controls the employee’s work schedule or conditions of employment

– determines the employee’s rate and method of payment

– maintains the employee’s employment records

Impact Date 16 March 2020
Employer Implications/Action Needed

Review any employee sharing arrangements to assess whether joint entity status may apply.

Employer Risk
If an entity is found to be a joint employer, that
If an entity is found to be a joint employer, that entity may be exposed to a wide range of labor and tax compliance concerns, and risk claims and audits arising from non-compliance.
entity may be exposed to a wide range of labor
and tax compliance concerns, and risk claims
and audits arising from non-compliance.

Subject Matter/Name of Development Past Salary Inquiry in New York
Summary A new law in the state of New York has made it unlawful for public and private employers to ask about a job applicant’s salary history in order to set salaries. However, employers may ask candidates about their salary expectations and may use any information it already knows or that the candidate volunteers. The legislation is applicable even if the interview takes place in a location outside New York as long as the job for which the applicant is applying will be in New York.
Impact Date 6 January 2020
Employer Implications/Action Needed

Review employment processes to avoid inquiries regarding salary history.

Employer Risk Current and former employees may bring claims, with risk of compensation awards for underpayment of wages, prejudgment interest, liquidated damages, legal fees and injunctive relief.
Subject Matter/Name of Development Classification of independent contractors in California
Summary

California has recently passed a new law intended to make misclassifying employees as independent contractors in the state more difficult. An individual may be deemed an employee unless the entity hiring the individual can establish three conditions, namely:

– that the individual is free from the control and direction of the hirer

– that the work performed is outside the usual course of the hirer’s business

– the individual is customarily engaged in an independently established trade, occupation or business of the same nature as that of the work performed for the hirer

Impact Date 1 January 2020
Employer Implications/Action Needed

Review independent contractor arrangements in California to assess potential status issues.

Employer Risk Employers may face misclassification claims, with risk of damages for unpaid wages, unpaid overtime, unpaid meal and rest breaks, and penalties and interest. Employers may also be liable for unpaid taxes.

Contact

Scott McLaughlin
Partner
+11 71 34 70 61 55
scottmclaughlin@eversheds-sutherland.com