EU Remote Work Directive Could Hit Home for U.S. Employers
Workspan Daily
August 02, 2023
Key Takeaways

  • EU’s push for remote work standardization. The European Union is working on an EU-wide resolution that calls for a directive that defines remote work rules that employers must follow.  
  • The reason for the push. As remote work became more commonplace, it has expanded the talent pool for businesses, but with that has come side effects such as burnout for some remote employees who are expected to be available outside of normal working hours.  
  • Implications for multinational organizations. Legal analysts believe it’s too early to know how this will influence hiring practices for multinational companies in regard to remote workers in the EU, but certain tech support positions might become unfeasible under “right to disconnect” laws.  
  • Remote work strategy needed. Legal experts note that regardless of what occurs with the EU directive, organizations with remote workers scattered in different locations and time zones should have a formal strategy in place about when employees are expected to be available to mitigate any potential labor risks.  

The rapid, pandemic-driven boost to an increase in remote work blurred the lines between home life and working hours worldwide. 

With that as context, remote workers may think that they are at an employer’s beck and call when it comes to hours needed to get work done. The potential outcome? A surefire path to boosting stress-filled burnout and turnover, according to experts. 

Member-Only Webinar: Mitigating Employee Burnout by Prioritizing Mental Awareness  

For U.S.-based employers who have employees working abroad, specifically in Europe, the scenario is more complex. Several European countries already instituted “right to disconnect” laws. And, the European Union (EU) has been working on an EU-wide resolution that calls for a directive that defines remote work rules that employers must follow.  

Los Angeles-based Dean Rocco, a partner in law firm Wilson Elser’s employment and labor practice, noted that the EU Parliament passed that legislative initiative in 2021 calling for the Committee on Employment and Social Affairs to propose the new rules. But he said its effect on multinational companies won't fully be known until the rules are final. 

It is difficult to assess whether these rules would discourage a multinational company from hiring new remote workers within the EU, he said.  

The Future Workforce Alliance, which is pushing for the new rules, is hoping the proposal, including an employee’s right to digitally disconnect, will become law by the end of the year, according to the group’s website, noted Laura Stutz, of Counsel in Wilson Elser’s employment and labor practice in Madison, New Jersey. 

“The right to disconnect beyond usual office hours has been part of global workplace discussions over the years. France, Italy, Spain and Belgium passed laws addressing the right to disconnect several years ago,” she said. “The idea is to protect employees from burnout and shield them from repercussions and discipline for off-hours non-responsiveness.” 

Stutz added that the while the idea isn’t new, remote work-life balance concerns have been pushed to the forefront as a result of the shift to remote work caused by the COVID-19 pandemic.  

“Many employers have turned their attention to designing and implementing employee wellness initiatives and policies, including remote work policies,” she said. “Even so, there is no one-size-fits-all solution, and the Alliance’s proposal doesn’t suggest one.” 

Navigating European Regulations   

Rocco said that regardless of remote work standards, workers in foreign countries will already be subject to rules that structure the work relationship, such as minimum or maximum hours of work.   

“As is the case with countries with existing remote work regulations, an employer can often work within the parameters of local employment laws to set hours of work for an out-of-country remote worker that align with the hours of operation the foreign office or headquarters to which they will report,” he said. 

Rocco added that the difficulty will arise when an employee is needed outside their established working hours to deal with an urgent work matter.  

“Similarly, if an employer can only retain foreign remote workers willing to work hours that are incongruent with the operating hours of their foreign headquarters, reaching the foreign remote worker during off hours will become an issue,” he said. “Under the remote worker disconnect rules, such contact is largely prohibited.”  

Stutz said that U.S. employers with workers in the EU and elsewhere will need to establish their own legally compliant policies to ensure business and employee needs are met in the jurisdictions of operations. 

Rocco added that employers with foreign remote workers should already be familiar with local employment laws governing the hours of work and obligations, including the recording and monitoring of employees’ hours of work.    

Forming a Remote Work Strategy  

As more remote worker rules come online, employers will need to be strategic in attempting to align the operating hours of their headquarters with the work schedules of foreign remote employees as well as set clear expectations around whether and when those employees should be online, he said. 

David Hollady, a vice president of legal and data protection officer at Employ Inc., said that in general employers are not methodical in identifying what exactly they are looking for from workers. With “right to disconnect” laws, companies will need to better understand the operational expectations they have for roles hired in the EU and whether hiring in the EU aligns with those needs, he said.  

“If companies are looking for lower-cost workers that fill traditionally non-exempt roles, they may still be willing to hire in the countries affected by these laws as many employers who hire hourly workers are already familiar with the concept of no contact outside working hours,” he said, adding that hiring in other areas that require flexibility — such as a salesperson or an executive — will present new challenges.  

“It's also important to consider the challenges in getting a team up to speed when establishing an EU presence,” he said. “This is already hard in different regions, but how much harder will it be if companies only have a couple hours of overlap time with EU teams?” 

Hollady explained that it is going to be more important than ever for management teams — from legal, finance, etc. — to work together to best collaborate with individual teams to see how the day-to-day work is being executed. 

“This means that certain roles may need to be duplicated in different regions to service international teams during their business hours,” he said. “If companies have teams across time zones that need quick approvals, issues may arise as well.  

In the end, Hollady expects these laws will have two possible outcomes: U.S.-based employers will lean into their European operations because they see it as an important part of their business, or they will begin pulling back. 

“There are many scenarios that will play out as the laws are finalized that will impact how employers and employees are affected,” Hollady said. “Potentially, this law could make it more challenging to test the EU market for companies looking to expand.”  

The laws will prompt a larger conversation about flexibility, especially for employers who rely on specialized expertise and work with employers and clients in different time zones, Hollady said.  

“For example, if you have an engineer who designed an important component of a software product and you cannot reach that engineer to troubleshoot a problem with that software component for much of the day, it’s going to limit the goals of the project and the business.” 

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