Labor laws

What is labor law?

Labor law is a set of regulations that govern the relationship between employees and employers, ensuring safe and fair working conditions for both parties. Labor law covers topics such as:

• Rules for establishing and terminating employment relationships;
• Rights and responsibilities, as well as the scope of liability for employees and employers;
• Standards regarding working hours;
• Minimum wage requirements;
• PTO and leave policies;
• Workplace safety and hygiene;
• Protection against discriminatory behaviors and bullying;
• Remote work;
• Severance pay and benefits;
• Existence of labor unions, etc.

📌 You may encounter two spellings: in US English, it is “labor laws”, while in UK English, it is “labour laws” (with a 'u'). These are two variants of the same term.

Global labor laws

In nearly every country, the rights and responsibilities of employees and employers are regulated by legal agreements, whether in the form of national laws or federal labor laws and state regulations. Even within economic communities like the European Union, regulations are not uniform, although many laws have been harmonized.

When seeking employment abroad, workers should familiarize themselves with local regulations to ensure they receive fair treatment and their working conditions meet legal standards. Employers hiring workers from another country must ensure that the new employees fully understand the regulations they are required to follow.

Regulations and laws for employers

Labor law imposes various obligations on employers, including:

• Ensuring that employees have working conditions that comply with the law, including the appropriate number of hours, the number of breaks, and the length of leave;
• Maintaining employee records and storing them for a specified period;
• Keeping records of working hours;
• Enrolling employees in mandatory insurance programs and consistently making the necessary contributions, such as for health and retirement;
• Providing employees with appropriate and timely compensation, including compensation for overtime hours;
• Ensuring workplace ergonomics and hygiene as well as safety regulations, including regular health and safety training;
• Properly assessing occupational risks, identifying and eliminating workplace hazards, and providing employees with suitable personal protective equipment.

Violations of labor laws by employers can lead to severe consequences, including fines, penalties, compensation payments to affected employees, or legal action from employees or labor unions.

However, labor law protects not only the employee but also the interests of the employer. Employers can, among other things:

• Enter into non-compete agreements;
• Take disciplinary action if an employee grossly violates work regulations or acts against the company's interests;
• Pursue claims in court if an employee causes damage or obstructs the company's operations.

Regulations and laws for employees

Each employee hired under an employment contract is entitled to:

• Receiving timely payment for work performed.
• Paid vacation and other paid days off throughout the year.
• Safe working conditions in accordance with health and safety regulations.
• The ability to join and be represented by labor unions that advocate for their interests.
• Equal treatment regardless of gender, age, race, religion, disability, sexual orientation, and other characteristics.
• Protection from harassment and bullying.
• Protection from unjustified dismissal.

Labor law in practice

Every employer must ensure that their company policies and internal regulations comply with labor laws. They must not include prohibited clauses, engage in discrimination, or restrict employee rights.

Small businesses without an HR department typically consult with external specialists for labor law matters. However, in medium and large companies, the HR department is responsible for labor law issues, supported by an external specialist or an in-house lawyer. Corporations have dedicated legal departments that assist HR in interpreting regulations and advising on compliance with labor laws.

Labor Law and HR responsibilities

The HR department's duties regarding compliance with labor laws include:

• Ensuring a fair recruitment process, free from discrimination, with appropriate wage rates;
• Creating, updating, and archiving employment contracts in accordance with current laws;
• Maintaining accurate records of working hours and proper calculation of wages and additional compensation;
• Monitoring and managing employee working hours, ensuring compliance with rest and break regulations;
• Organizing health and safety (H&S) training, keeping training records, and collaborating with H&S inspectors to ensure safe and hygienic working conditions;
• Organizing and conducting labor law training and other mandatory training to raise legal awareness within the team;
• Managing employee relations, resolving conflicts, and cooperating with labor unions;
• Keeping complete and compliant employee documentation, including personal files;
• Conducting internal controls and audits in various departments and addressing employee reports related to regulatory violations.

Why is compliance with labor law important?

Compliance with labor law is mandatory for both employers and employees. When both parties adhere to the regulations, the workplace becomes more friendly and motivating. This not only enhances the company's reputation, attracting a steady stream of talent, but also increases employee engagement and satisfaction, making them feel secure.