Companies that operate with employees in multiple states and/or countries face a daunting task. Labor and employment laws and regulations vary greatly from jurisdiction to jurisdiction, often with substantial differences in coverage, application and penalties for violation. To complicate matters further, regional differences can also exist within the borders of a larger jurisdiction. For instance, the City of Philadelphia might have different and more stringent requirements for a plant closure than that required by the Commonwealth of Pennsylvania or what is mandated under federal law.
Further, it is not uncommon for a company to commence operations in a new jurisdiction or acquire an existing business overseas and fail to account for what can be significant differences in the treatment of commonplace employment issues. As an example, in most jurisdictions around the world, inserting a “choice of law” provision into an employment contract or offer in the hopes of securing “home court” advantage in some future litigation will not suffice to accomplish your goal. Few, if any, jurisdictions will allow a multinational employer to unilaterally establish the terms and conditions of employment by private contract when they differ markedly from the law of the actual jurisdiction where the employee will work.
