COVID-19 and its effect on Global Labor Laws

no responses

As COVID-19 continues to disrupt normalcy across continents, the global labor laws are being amended to alleviate the damage that the pandemic is creating and to support multinational organizations in their attempt to continue business as usual.

We have compiled the various measures that some countries around the world have taken as a step towards mitigating the degrading effect and helping businesses withstand the pandemic. The amendments and changes of their corresponding labor laws have been gathered and presented here based on credible resources from the respective governments.

1. United States

The US government has made amendments to the FMLA through which an employee is permitted to take up to 12 workweeks of unpaid leaves and job-protected leaves provided he/she has worked for a minimum period of 30 days. The leave can be used if a family member has been diagnosed with COVID-19 and requires treatment, employees find themselves quarantined, or if their children (aged under 18 years) are unable to go to schools. After 2 weeks of paid leave, the employer is supposed to pay employees a minimum of 2/3 of employees’ regular pay. Albeit, these amendments apply only to companies with less than 500 employees and those working for the government.

A maximum of 26 workweeks of leave is permitted in 12 months as per the amended FMLA. This works in case an employee needs to take care of a covered servicemember who is seriously injured or ill and if the eligible employee is servicemember’s spouse, daughter, son, parent, or a close relative.

Additionally, the country is looking into organizations that will be able to lessen the number of hours an employee is supposed to work rather than laying them off. Hence, employees will not be left completely unpaid and would be offered partial unemployment benefits to compensate for any loss of salary owing to lost hours.

Another noteworthy step the US government has taken is the introduction of the Emergency Paid Sick Leave Act. As per the act, employees are offered 2 weeks paid sick leave with full regular wages if the employee is quarantined or needs to undergo any preventive measure to safeguard against COVID-19. In case, an employee needs to take care of a sick family member, the employer should pay 2/3 of the normal salary.

2. Italy

The Italian government has taken enormous steps in making working from home easier both for the employee and employer. As per the nation’s ‘smart working’ law, a typical Italian employee can work from home if and only if the employee and the employer had a written agreement signed. With the new legal update, the two parties need not require this agreement. It is sufficient if the employer notifies the Italian Labor Authorities and the employee and provide all necessary information regarding how he/she should work remotely. Though this update is here to stay until July 31, 2020, it is subject to change.

Normal sick leaves apply if an employee is unable to work due to the coronavirus. Additionally, in case an employee is suffering from the coronavirus and is quarantined, it is deemed that the employee would be unable to perform regular duties, as expected by the organization. Also, the employer need not pay the usual wages to that employee. In such a case, the employee is given an option to use vacation holidays or take unpaid leaves of absence.

In a case when the company is forced to shut down, employees can reimburse their wages through the Wage Guarantee Fund (CIG). Up to 80% of wage reimbursement has been made possible.

3. France

A French employee who (i) is a parent of a child under the age of 16, (ii) is not able to work from home owing to schools being closed, or (iii) is a parent of a quarantined child can avail a compensation called ‘arrêt de travail’. The compensation entitles employees to receive a daily allowance until the date on which schools reopen. Nevertheless, only one parent will be able to receive the allowance.

As per the short-time work system (“activité partielle“), employers in case of a financial loss either because of complete/partial temporary closure of their operating facilities or a reduction in the working hours applicable can obtain financial assistance from the state and pay their employees. This scheme has been brought into effect to enable companies to overcome temporary economic difficulties without resorting to complete/partial employee layoffs.

4. United Kingdom

In the UK, employees were earlier allowed to avail sick leave benefits only from the 4th day of sickness – this has however been amended to allow employees to avail sick leave from Day 1. Nevertheless, they are required to submit their medical certificate from the 7th day of sickness. Employees are entitled to receive £94.25 a week as Statutory Sick Pay (SSP) provided they suffer from any form of illness that defeats their ability to work. Employers are expected to pay SSP for 28 weeks. Employees who are at home taking care of family members who are sick and are therefore forced to be on quarantine can also avail this benefit.

The UK government has made a provision to get an online ‘isolation note’ through NHS 111 online. This helps employees affected by COVID-19 or advised to stay at home to get a sick note right from their home rather than visiting a hospital.

Provisions have been made for ensuring furloughed workers are paid. Employers who are unable to continue operations or do not have work for their employees can mutually agree to keep the payroll running. Employees can receive 80% of their wages with a monthly cap of up to £2,500.

5. Australia

The Australian Government is supporting businesses in managing the challenges in cash flows and helping in employee retention to a significant extent. As per the JobKeeper Payment – an initiative from the Australian Government, companies that have been impacted by COVID-19 are entitled to receive a fortnightly payment of $1,500 for each employee. Temporary cash support of $100,000 has been arranged for SMEs and not-for-profit organizations. Moreover, companies eligible for this support need not even apply through separate forms.

The Australian government’s Backing Business Investment measure that is estimated to reduce the taxes businesses pay by $6.7 billion in the coming two years. Over 3.5 million enterprises with ~9.7 million workers will benefit from this measure.

The COVID-19 pandemic spread is progressing; more and more countries are coming up with newer amendments in their national labor laws to help organizations withstand the crisis and bounce back to normalcy as soon as the situation gets better. Dynamic organizations have begun leveraging their proactive prowess to understand multicountry labor law amendments and enable global enterprises to reap maximum benefit from government programs worldwide.

Neeyamo’s coHRona helpdesk, for instance, is an exclusive helpline platform global HR and payroll professionals can depend upon in case they have questions regarding benefit programs that governments have brought into effect as a result of the pandemic crisis.

To know more about the global labor law updates, the implications for businesses, and how our resilient solutions can help you during this crisis, drop us a line via email. We will be glad to assist you.

Leave a Reply