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Doing the Homework May Avoid Complications in International Business

Just how complicated it is to conduct international business was made clear to me during a recent trip to Japan. Japan is suffering from a shortage of employees and is looking more to immigrants to supply the needed workforce. Foreign workers are likely to find the workplace culture in Japan to be quite different from their own; also, there is unease among many Japanese businesses and the Japanese government about trade restrictions with the United States and relations generally with China. All these open issues make operating a business in Japan a complicated matter.

In order to assist a company in adequately managing its global workforce, HR departments must first identify those topics on which homework needs to be done, and do so before the first assignment of employees is made. Understanding immigration visa rules for the target country should be the first item to check off the list. Many countries, including several countries in Europe, have recently made visas for foreign workers more difficult to obtain. While a great deal of attention was given to the recent executive orders in the United States related to immigration, a number of other countries have placed quotas and time limits on immigration, significantly limiting foreign-worker mobility.

As strange as this may sound, the HR advisors for international countries also need to understand the possible “end game” of any international employees’ employment relationship. This includes understanding how any dispute related to the ending of that employment relationship might be resolved in the target country. If there is a potential to establish a dispute mechanism through a contractual arrangements with the assigned employee, HR needs to consider that option and properly advise the company of what options are available, preferably at the beginning of the relationship. In any event, it is important to understand what type of legal system will address labor and employment disputes. For example, is there an employment tribunal for disputes over the reasons for a termination?

If the target country is one that could be said to be in crisis in its economy, government, or social fabric, adequate research needs to be done to determine how best to handle these issues. A balance needs to be struck between the business’ needs and the potential risk of placing international employees in a country that is in crisis. For example, if your business wanted to establish operations in Kenya, you would want to know that the country’s healthcare system is in upheaval due to a nationwide strike of doctors and nurses that has almost completely shut down its healthcare system. Now would not be a good time to place international workers in Kenya.

Of course, to fill this important role, HR professionals for international companies must receive the appropriate training and information. Attending programs related to international business is certainly one way to gain this information. Along these lines, the International Law Section of the State Bar of Texas will hold its Annual Institute on international business at the Houstonian Hotel, February 23rd and 24th. Do not miss this opportunity to learn more about doing international work. The world is a complicated place to do business, and only with the proper homework can an HR professional hope to adequately advise the company in its international operations.

This information is provided by Vinson & Elkins LLP for educational and informational purposes only and is not intended, nor should it be construed, as legal advice.