Discuss the applicability of U.S. employment laws to multinational employers.

Question

What will be an ideal response?

Answer 1

The following four employment laws may apply to U.S. citizens working abroad: Title VII of the Civil Rights Act, the Age Discrimination in Employment Act (ADEA), the Americans with Disabilities Act (ADA), and the Uniformed Services Employment and Reemployment Rights Act (USERRA). They also apply to U.S. citizens of foreign corporations doing business in the United States, even if those corporations employ fewer than 20 workers. However, they do not apply to foreign employees of a U.S.-based multinational who are not U.S. citizens. USERRA applies only to veterans and reservists working overseas for the federal government or a firm under U.S. control. Title VII, the ADEA and ADA are more far reaching, covering all U.S. citizens who are either employed outside the United States by a U.S. firm, or by a company under the control of a U.S. firm. In determining whether a non-U.S. firm is under U.S. control, the Equal Employment Opportunity Commission will review the following:

1. The degree of interrelated operations.
2. The extent of common management.
3. The degree of centralized control of labor relations, common ownership, and financial control.
4. The place of incorporation.

Each of the four laws contains an exemption if compliance with the U.S. law would cause a company to violate a law of the country in which it is located. If the laws of a particular country prohibit the hiring of women for certain jobs, a U.S. company operating within that country must follow that country's law. This is consistent with the general principle that MNEs are accountable to the laws of the countries where they operate.