Step-by-step Roadmap

This is a critical first step. Employment contracts are not always clearly defined, as various work arrangements exist (contracting/ freelance work). Even when parties label their relationship as "employment," the actual legal classification may differ based on specific criteria and circumstances.

Relevance: Labor Law applies exclusively to employment relationships. Labor Law does NOT apply when working with contractors or self-employed workers, as these relationships are governed by different legal frameworks.

Cross-border employment situations frequently involve multiple entities sharing employer responsibilities, whether by design or circumstance. However, Labor Law rules only apply to the "Formal Employer" - the party with whom the employee entered into an employment contract.

Therefore, identifying which entity legally serves as the formal employer is a crucial step in managing international employment relationships and ensuring proper compliance with applicable regulations.

The formal employer bears full responsibility for complying with all applicable Labor Law regimes governing the employment relationship. The critical question is: which country's regime(s)? The home country, the host country, a third country?

The answer depends on systematically cataloging the facts and circumstances of a specific cross-border work arrangement. Reaching the correct determination is crucial for ensuring regulatory compliance, safeguarding both employer and employee interests, and accurately forecasting assignment costs.

When employees work across borders, employers face the challenge of navigating multiple regulatory frameworks simultaneously. It's common for several sets of labor laws to apply concurrently, often containing conflicting requirements that create compliance dilemmas. Determining which legal regime takes precedence becomes crucial for proper workforce management and risk mitigation. Fortunately, the Rome I Regulation provides a structured framework to guide employers through this complex legal landscape.

The next step is determining the domestic Labor Law rules that apply to the employment. When multiple labor law regimes intersect, a methodical country-by-country analysis becomes necessary to identify which rules from each system provide the strongest employee protections. This comparative approach ensures compliance while maximizing worker benefits under applicable laws.

Here are some attention points you need to consider when examining domestic Labor Law regime(s).

When establishing which Labor Law regime applies to a specific case, a thorough investigation is essential. Key elements must be carefully documented and filed in the Labor Law Compliance File, creating a clear record of all relevant factors.

Remember that this documentation is not static - the file should be regularly updated to reflect any changes in circumstances that could affect the applicable regime.

The roadmap 'Applicable Labor Law' has guided you through the intricate landscape of international labor law, demonstrating that cross-border employment involves far greater complexity than commonly presumed. Significantly, the consequences of misnavigation can lead to substantial financial penalties and lasting reputational damage.

To summarize, here, you will find a  flowchart and case studies.

The final step on this roadmap is verifying your findings with an expert. This is not a luxury but a necessity. After all, determining which labor law rights and obligations apply defines the wage costs and, for a substantial part, the overall assignment cost.

Moreover, it can prevent labor disputes and costly proceedings to resolve them, as you will find out under the heading "Special Focus on international Labor Disputes".