When an overseas company hires in a remote region, the international labor law is applied. This set of rules is agreed between the countries and bounds an international company to comply with.

Being a company who aims to tap remote talent, complying with labor laws could be overwhelming. That’s why this guide presents an easy summary that tells you which laws you need to take care of.

How many employment laws are there?

Each country has their own version of employment law. They propose separate and slightly varying rules against categories such as: minimum wage, overtime, working hours, rest breaks and public holidays etc.

The aim is to protect employee wellbeing and create a support system that improves their productivity. 

Which laws should you consider for your remote hiring?

There are 5 legal subjects of employment that you should comply with as a recruiter hiring for remote global talent. These are as follows:

1. Setting an Employment Contract

As an employer seeking remote hires, it’s mandatory to set-up employment contracts. It not only improves your reputation as an employer, but also saves you from legal procedures later on.

An employment contract is made mandatory by law in the majority of countries. 

Its purpose is to set-up the rights and obligations of parties to an employment relationship. This legal agreement protects the workers from misuse as well as ensures that employers get quality work. 

These contracts agree to provide conditions (as prescribed by law) such as: healthy and safe working environment, all material to perform work, salary that is not less than minimum wage, legal working hours, probation, termination conditions etc.,

In turn, employees are obliged to work under the agreed terms and provide the required quality of work.

Those countries where an employment contract is not mandatory require employers to provide a written statement that details key employment specifications such as wage, sick leaves, working hours, vacation entitlements, etc.

It’s to be noted that the labor law around the world pays great attention to fixed-term contracts given their potential to exploit employees’ rights. These are temporary job contracts that activate a termination on conditions such as– completion of fixed term, achieving a task, arrival of permanent staff or reaching a business outcome. Therefore, a business should pay special attention to the labor law when jotting fixed-term contracts. 

2. Complying with Minimum wage rules

Remote hiring adapts its wage policy as per the country of interest. Recruiters can check a simple mathematical ratio:‘minimum-wage to average-value-added-per-worker’. Depending on this metric and as per the country’s policy, an appropriate remuneration can be proposed.

A higher ratio (>1)– such as in Botswana, Uganda, Kuwait and Georgia, reflects a good situation where companies pay higher wages compared to what each worker adds to their value.

On the other hand, countries in the Central African Republic have a low ratio (<1) which shows that employees are paid lower than the supposedly fair salary. 

Knowing the wage policies in a country also helps recruiters take advantage of the countrys’ youth employment programs. For example, in France, youth wages are used as a way to incentivize companies to offer youth internships (or apprenticeship). Following this program, companies employ inexperienced youth on a low wage, and gradually add on every year as they are finally hired on a fair wage level.

3. Requirement of Probation Period

As a company who’s seeking remote hires across various countries, you must know that there’s a different limit of probation months for each country. 

A probation period is the duration of time in which an employee remains on-trail. It allows an employer to review performance of the employee after which the decision of permanent hiring is made.

Majority of countries limit probation periods between 2-6 months (or more) and make it mandatory to mention in employment contracts. Some countries such as Belgium and Chile don’t allow probation periods at all.

4. Working hours and days

As a recruiter, you must know that the country you’re interested in hiring might not have the traditional 8 hours of working. Therefore, you might have to hire remote candidates at working hours greater or less than in your country.

Depending on the country, the range of allowed working hours is between 6.6-9 hours maximum and 5-7 days a week.

Similarly, you must take similar consideration for overtime and night shifts which are also legislated differently among different countries.

5. Public holidays

As a company managing a global talent team, you must schedule-off public holidays that vary significantly across countries. These holidays are influenced by religion, history and culture. 

A public holiday counts as a rest day in all countries. However, if an organization schedules work for an employee who has a national holiday, then that day counts as overtime or paid.

Find more information on international labor laws at Deloitte and International Labour Organization.