Four out of the Top 10 International Employment Law Issues in 2015 affect Germany and/or the European Union

New Minimum Wage Requirements
Many countries have for the first time passed, or are considering, a minimum wage. Germany has passed a minimum wage law effective Jan. 1, 2015. The new German minimum wage will affect all companies, even if they already pay their staff well over the hourly minimum, because the statutory minimum is a component part of every wage paid. Paying late or not at all constitutes an administrative offense which may carry a fine of up to EUR 500,000. The legislation will impose significant record-keeping obligations, including not only lower wage workers, but also what we call in the United States “white collar exempt” employees. Failure to comply with the new legislation could also render a company criminally liable for not remitting social insurance contributions and/or withholding payment for work performed and usury. If the company contracts work or services to subcontractors, it is also responsible for ensuring that the subcontractor and its subcontractors pay the statutory minimum wage.
Restrictions on Incentive Compensation
The United States and Europe have imposed variations on “say on pay” rules, requiring non-binding shareholder approval of compensation for senior executives of publicly traded corporations and for compensation packages payable in connection with a change of control. Many of these rules have direct and indirect international application and effect.
The European Parliament is regulating certain investment firms to ensure financial viability, including restrictions on bonus payments by credit institutions and investment firms. Implementation of these restrictions has created challenges for multinationals that face conflicting rules regarding compensation of key executives, and create competitive challenges for multinational talent across jurisdictions-a European bank that is limited by CRD IV’s bonus restrictions may find itself unable to recruit in the United States, where American banks do not have these restrictions.
The Volkswagen Organization Drive
Volkswagen has engaged with Works Councils-organizations of workers that represent employees in various employment disputes and negotiations in almost all overseas jurisdictions where it manufactures cars.  
In Europe, there exist three distinct levels of formal employee representation. First, trade unions can represent employees. These generally act on a sectoral basis, for all workers in an industry, including workers who are not in an organization that has a union. Their operations are governed by local countries’ laws.
Second, local works councils receive information from a company’s management, and consult with them on a range of issues. Again, the operation of works councils is governed by local countries’ laws.
Finally, European Union law has established “European Works Councils“. The law applies to any company employing over 1,000 Europeans with at least 150 employees in each of two Member States. A request by 100 employees from two countries or an initiative by the employer triggers the process of creating a new European Works Council. These receive information from employers and consult regarding company-specific issues that apply Europe-wide.
In Tennessee, the United Auto Workers (UAW) claimed a union was necessary for the formation of a works council. Representatives of the Global Works Council supported the recognition efforts of the UAW through a secret ballot election process recognized in the United States. Nonetheless, the UAW lost the election.
Efforts persist, however, for the UAW and another employee organization, the American Council of Employees, to achieve some kind of “representation” rights among the VW employees. This “experiment” is receiving worldwide attention as VW attempts to blend corporate culture and a European system of representation with a legal system in the United States that, arguably, does not embrace such concepts, while keeping in mind the paramount desires of its U.S. employees in the process.
Some believe that this initiative marks a major turning point for unions, certainly in the U.S., and perhaps throughout the world. Clearly it presents unique challenges, not confined to VW, but for many other worldwide enterprises subject to an extremely complex array of laws, cultures, brand identity issues, attack points, political considerations and practical strategies as organizations attempt to achieve their economic goals.
Data Privacy
The European Union (EU) likely will approve broad changes in its data protection framework by the end of 2015. The Safe Harbor (a streamlined process for U.S. companies to comply with the EU Directives on the protection of personal data) likely will change in some respects in 2015. Further, many countries have recently enacted data protection regimes and there likely will be new guidance, case law, and/or enforcement actions in 2015.

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