What are labor laws?

Labor law refers to the vast body of law concerning all aspects of employment, from working conditions, pay, and benefits to trade unions and worker protections, like social insurance and disability protection. It encompasses many varied pieces of legislation.

Labor laws vary by location. The laws in the United States will be distinct from those in Canada, Germany, or Mexico, for instance. Employers who hire employees internationally need to recognize the labor laws in the various countries in which they hire, ensuring compliance with diverse pieces of legislation.

What are employee labor laws?

Labor laws essentially define the rights of employees and the responsibilities of their employers. They also serve to define the conditions of work. Broadly speaking, labor law governs relationships between employers, employees, trade unions (if applicable), and the government as a whole.

The variety of legislation falling under the broad umbrella of "labor laws" is enormous. Such laws may govern areas such as:

• Health and safety
• Terms of employment
• Working hours
• Minimum wages
• Working hours
• Working conditions
• Health insurance
• Disability insurance
• Paid time off
• Discrimination
• Dismissal
• Trade unions

The development of modern labor laws

Local labor laws vary depending on the jurisdiction. However, global labor laws tend to all have a common past—they developed over time to help protect the rights of workers.

Some historians trace early examples of labor law as far back as medieval times in Europe. There are even examples of codes that could be considered labor laws in the Babylonian Code of Hammurabi, from the 18th century B.C.E., and examples of rules governing labor–management relations in the Hindu Laws of Manu from 100 C.E.

In other words, labor laws aren't a new development. There has always been a need for rules governing working conditions and worker–employer relationships.

Modern labor law tends to find its roots in the industrial revolutions of the 19th century and beyond. As modern industries like mining and manufacturing scaled up, there was an increased need to protect workers' rights.

One of the earliest examples of modern labor law was the British Health and Morals of Apprentices Act of 1802. It was developed to protect young laborers at a time when child labor was still the norm. Meanwhile, Germany pioneered protections like workers' compensation in the 1880s. 

In Japan, the first iterations of modern labor law were seen in the 1890s, designed to protect mine workers. Latin America saw a surge in labor reformations in the early 1900s. African countries saw significant progress in labor legislation from the mid-1900s onward.

How international labor laws differ today

Modern international labor and employment laws vary according to the country. Take something as seemingly simple as the number of hours workers are permitted to work every week, plus overtime pay. Local labor laws differ on this point.

For example, the standard working week in Brazil is 44 hours, while in Colombia it’s 48 hours. Meanwhile, in Australia, the standard workweek is just 38 hours. International labor laws governing working hours are just one example of how disparate these rules can be.

Maternity leave around the world is another good example. The paid weeks of maternity leave vary drastically between countries. In Bulgaria, women get 58.6 weeks, for example, while in the Czech Republic, they get 28 weeks.

The importance of labor law compliance

It's up to employers to ensure they comply with international labor laws by country. Otherwise, they can face steep penalties.

Take something like the misclassification of workers. International labor law violations on this point can result in penalties like having to pay back taxes and social security, as well as facing financial penalties, criminal liability, and legal action from employees—not to mention a tarnished reputation.

Compliance with international labor law gains even greater significance as more companies hire globally, beyond their immediate borders. Global employers have the benefit of being able to source talent from anywhere in the world. However, that requires taking into account the local labor laws of the countries they're hiring from.

While this requires extra effort, it's well worth it given the potential penalties. Luckily, there are tools available to help—like Oyster. By ensuring labor law compliance globally, Oyster helps companies avoid legal penalties and maintain good corporate ethics. A strong reputation in fair labor standards is also critical to attracting the best and the brightest in the workforce—the key to any company's success.