[lg policy] 5 Common Issues Multinational Employers May Encounter When Implementing Leave Policies

[Harold Schiffman]

5 Common Issues Multinational Employers May Encounter When Implementing
Leave Policies
Friday, November 16, 2018

For the purposes of talent acquisition and retention, multinational
employers with U.S. parental leave policies may wish to roll out the exact
same policies at all locations. However, this can easily turn into a tale
of “no good deed goes unpunished” because certain provisions may run afoul
of local laws and customs or inadvertently grant additional benefits. Below
are several common issues multinational employers may want to keep in mind
when drafting parental leave policies, as well as steps they can take to
harmonize policies globally.
*1. Retaining Discretion Regarding How Much Leave to Provide*

Policies allowing an employer to retain discretion as to how much leave to
provide may run afoul of certain countries’ (such as Chile, Colombia, and
Mexico) laws. For example, if a policy contains a provision for up to 18
weeks of leave, the “up to” language signifies that the employer has
discretion. This can violate the some countries’ requirement that voluntary
benefits not be subject to an employer’s discretion and have clear and
objective criteria for eligibility.

The “up to 18 weeks” language also leaves open the possibility that
similarly situated employees may receive different amounts of leave, which
can violate local requirements that benefits be the same for all such
employees. This discrepancy could create grounds for a discrimination
claim. To address this pitfall, employers may want to consider removing the
“up to” language or include a caveat that the policy is subject to
applicable law.
*2. Ambiguity Regarding the Interplay With Local Social Security or
Government-Provided Leave*

Many countries provide local social security or government-provided leave.
Policies can address the interplay with social security and/or government
insurance–paid leave and employer-paid leave. If a policy fails to do so,
it could leave open questions such as whether the company will pay an
employee during any social security or government insurance–paid leave,
resulting in a double benefit, and whether the company will pay the
employee during the remainder of the leave after the government-provided
leave expires.

Employers may want to consider revising their policies to clarify whether
paid leave is in addition to leave paid by local social security or
insurance and whether the company will assume the payment after the
expiration of the statutory period covered by social security or make up
the difference between the amount provided by the government and the policy.
*3. Ambiguity Regarding the Interplay With Local Prenatal Leave
Requirements*

Employers may want to keep in mind that some countries statutorily mandate
not only postnatal leave, but also prenatal leave. As such, employers may
need to revise some policies to account for the prenatal component of the
statutory leave. For example, female employees in Argentina are statutorily
entitled to a maternity leave of 90 days, which is divided into two equal
periods of 45 days: one to be taken as prenatal leave and the other to be
taken after the date of birth. Companies may want to clarify how the leave
period will run concurrently with statutory leave when local law provides
for both prenatal and postnatal leave.
*4. Calculation of Leave Pay*

Companies that calculate leave pay based only on salary may run afoul of
local requirements. For example, in Brazil, the rate of pay during leave is
based on the last total monthly remuneration, including, for salaried
employees, any variable pay and, for non-salaried employees, any overtime
and variable pay. Employers may want to consider either removing language
reflecting that pay during leave is based only on salary, or including a
caveat that the policy is subject to applicable law.
*5. Local Language Requirements*

Employers that provide English-language policies in other countries should
be wary of local requirements. For example, many countries require that
policies be in the local language in order to be enforceable.

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 Harold F. Schiffman

Professor Emeritus of
 Dravidian Linguistics and Culture
Dept. of South Asia Studies
University of Pennsylvania
Philadelphia, PA 19104-6305

Phone:  (215) 898-7475
Fax:  (215) 573-2138

Email:  haroldfs at gmail.com
http://ccat.sas.upenn.edu/~haroldfs/

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