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Five countries with the best labor and employment laws for workers’ rights

Explore the importance of solid labor and employment laws.
November 2, 2022
Oyster Team
Person holding baby in air

As society evolves, there’s a constant re-evaluation of how we work and what we expect from work. 

We’re also more conscious of individual holistic health. Two years plus of battling the most stressful event in recent human history will do that to anyone. So, governments are infusing humanity into the laws that govern work-related relationships and protect employee welfare. However, some regions are doing that better than others.

We’ll rank the top five countries with the best labor and employment laws from the employee's perspective. But first, what exactly are labor and employment laws?

What are labor and employment laws?

Labor and employment laws are regulations that govern the relationships between employers and employees. 

Specifically, labor law regulates the relationships between groups of employees, such as labor unions, and their employers. And employment law governs the relationships between individual employees and their employers.    

These laws have a broad scope—in most countries, they affect the entire legal relationship between employers and employees. This starts with the hiring process and extends to all aspects of everyday operations, including:

  • Job descriptions
  • Compensation 
  • Promotions 
  • Evaluations 
  • Terminations
  • Benefits 
  • Mergers and acquisitions
  • And the successful settlement of disputes in the event of unfair labor practices or discrimination.

Labor and employment rules vary significantly between nations and even between levels of government. It’s not uncommon to find different regulations across levels of government—federal, state, county, and even city. As a result, keeping track of these requirements is more complicated than ever for today’s employers.

The importance of solid labor and employment laws 

Both labor and employment laws exist to define and safeguard employees' and workers' essential statuses, rights, and privileges.

Employment laws establish the standard for:

  • National minimum wage 
  • Maternity/paternity leave
  • Paid leaves 
  • Work permits 
  • Work-life balance
  • Workplace safety 
  • Diversity, equity, and inclusion, among other things.

Labor laws extend these standards to worker unions, preserving their rights to equal participation in setting their work conditions. Both labor and employment regulations are critical in ensuring that companies adhere to a specific standard and that workers get fair, humane working conditions. 

In most countries, the issue isn't so much a lack of labor and employment laws as it is a lack of enforcement of such rules. Countries that do not take firm action against corporations that violate labor and employment laws give the impression that these issues are not a priority. This fosters the idea that organizations can mistreat employees without fear of consequences.

So, without further ado, which countries have progressed the most with their labor and employment laws?

The 5 countries with the best labor and employment laws

We’ll rank the best countries based on work-life balance, employee satisfaction, women’s rights, and violations. Here goes:

1. Norway

According to the Norwegian Statistics Bureau (SSB), unemployment in Norway is almost non-existent at 3.2%. They’re definitely doing a few things right.

Annual working hours

For the average, well-engaged employee in Norway, annual working hours total 1427 hours per year or 37.5 hours per week. 

Also, employees may have the right to lesser working hours due to health, social, or welfare reasons. They can also arrange for flexible working hours with employers. All employees, except for execs, have the right to a compensation increase of at least 40% for overtime. 

Maternity and parental leave

Norway, as well as the rest of Scandinavia, is known for its generous parental leave policies

Parents get 52 weeks or 12 months of leave during and after birth. If employees agree to a pay cut, they can extend it to 58 weeks. This time includes the mother’s right to leave for up to 12 weeks during the pregnancy, and six weeks of leave after the birth. Employers pay 80-100% of the parents’ wages during the leave.

Adoptive parents and foster parents have similar rights, but only for children under the age of 15.

In addition to the first 12 months, each parent is entitled to one year of leave for each birth. The catch is, that parents must take this leave right after the baby’s first year. Single parents get two years of post-birth leave. 

Women’s rights

At median incomes, the gender pay gap in Norway is among the lowest in the OECD. 

Norwegian law requires that all publicly traded and public limited companies have at least 40% female representation on their boards. The law is strictly regulated and non-compliant companies may be delisted.

Also, the Gender Equality and Anti-Discrimination Act requires that men and women be paid equally for work of equal value. The rule applies to all types of compensation, including bonuses and overtime pay.

Employee satisfaction

Work-life balance is one of the reasons why Scandinavian countries consistently rank first in terms of standard of living and happiness. In 2019, 88% of both men and women in Norway said they were satisfied with their job. 

Violations

According to the 2022 Workers’ Right Index, Norway ranks as one of the countries with the least violation of workers’ rights.  

2. Denmark

The labor and employment laws in Denmark are not as extensive as in Norway. There is more contract flexibility, and working relationships can differ depending on the terms of the employer-employee agreement.

Still, there are several laws designed to protect employees. Here are the constants:

Annual working hours

The average Danish employee clocks in 1438 hours per year or 37 hours per week. But, as we mentioned earlier, the parties are free to agree on a shift in working hours up to 48 hours per week, including overtime.

Employees should expect to be compensated for work weeks that exceed 37 hours. Workers can take up to five days of paid holiday leave per year.

Maternity and parental leave

In Denmark, the general rule is that new parents have the right to four weeks of leave directly before the planned birth and then to a further 14 weeks of leave after birth. After the first 14 weeks, they can get another 32 weeks of additional leave, coming to a maximum total of 46 weeks of parental leave post-birth.

Denmark has some new rules for parental leave, effective from August 2022. The rules aim to promote gender equality since they allow both parents to get equal time off as parental leave. 

Women’s rights

Although men in Denmark earn 5.7% more than women, the country has some of the world's lowest income inequality.  Also, about 40 % of the representatives in Denmark's parliament are female, and so are many of the country's ministers. 

Employee satisfaction

Denmark consistently tops lists of happiest countries in the world, and that hasn't changed. Denmark ranks first on the list of the best places to work in Europe for tech workers, according to the 2020 Digital Talent Global Work Happiness Index.

Violations

Denmark has minimal cases of violation of the labor and employment law.

3. Belgium

Belgium has also enjoyed favorable coverage of its employment laws and job satisfaction rates. Let’s take a closer look.

Annual working hours

Employees in Belgium work standard 40-hour weeks, clocking in an average total of 1575 hours per year. Employees can work up to 120 paid overtime hours per year.

Maternity and parental leave

Belgium could improve its parental leave laws. The country only allows three months of maternity leave and ten days of paternity leave, compared to other countries in the region that offer leave days in the hundreds.

Women’s rights

Gender inequality does exist in Belgium, unfortunately. But the country is part of those with the lowest pay inequality gap, and it’s still on the decline. In 2020, women in Belgium earned 5.3% less per hour than men, but that has since dropped to 4.7%. 

Also, the Belgian government requires 33% female representation on corporate boards.

Employee satisfaction

A 2020 survey found that eight out of ten employees in Belgium were highly satisfied with their jobs. The COVID situation was still rather fresh then, so we looked into more recent research to determine how the lockdown affected the job satisfaction rate in Belgium. Per the same source, but more recent research, around two-thirds (63%) of people living in Belgium still feel passionate about their job on a weekly basis. 

Violations

Belgium also has minimal cases of violation of the labor and employment law.

4. Netherlands

The Netherlands would have ranked higher on this list, but they’re only making slow progress in some key areas. Let’s see:

Annual working hours

Dutch employees put in 1420 hours per year, on average. Overtime pay is not regulated, so it’ll vary depending on the agreement. 

Maternity and parental leave

Paid maternity leave in the Netherlands begins six weeks before the expected due date. Mothers can take up to 10 weeks of paid maternity leave after giving birth for a total of 16 weeks of paid maternity. After childbirth, the mother can take extended breaks of up to six months.

Effective August 2022, the Dutch government will allow nine weeks of partially-paid parental leave so both parents can spend time with the child.

Women’s rights

There is a significant gender pay gap in the Netherlands: at median incomes, working women earn around 14.1% less than working men. The Dutch government is striving to level the playing field. Per a gender diversity bill effective January 2022, Dutch companies must have at least 33% female representation on supervisory boards. 

Employee satisfaction

The Netherlands is famous for ranking high on job satisfaction surveys. As of 2018, 76% of employees said they were “most satisfied” with their jobs.

Violations

The Netherlands comes in pretty low on the violations radar. There are rarely any reports of non-compliant employers.

5. Germany

Germany is the EU’s largest economy. While the country has solid legislation for employment, some areas are still grossly lacking.

Annual working hours

A full-time employee in Germany works an average of 1,371 hours per year or roughly 33 hours per week. Overtime pay is not regulated, but employees cannot work more than 60 hours per week, including overtime.

Maternity and parental leave

Mothers are entitled to 14 weeks of paid maternity leave, including six weeks off before their baby is born. Fathers and their partners can also share a three-year leave. This means that parents can work together to find a good balance so that they can be with their children until they are three years old.

Women’s rights

There’s still a significant gender pay gap in Germany, with women earning 15.5% less than men. For context, the average EU gender pay gap is 14.1%, so Germany's is one of the highest. There’s hope, though—the European Commission and Parliament in Brussels are currently debating an EU directive on pay transparency.

According to a draft, employers would be required to publish pay gaps and make efforts to shrink them if they are too large or face penalties.

Employee satisfaction

German employees are reasonably satisfied at work. A 2018 Gallup study found that 69% of German employees were happy or extremely satisfied with their company as a place to work. However, that number has taken a hit in recent years as more Germans push for more freedom of choice and flexible working hours.

Violations

Violations of the labor and employment law are pretty rare in Germany.

Get familiar with labor and employment laws

Labor and employment laws preserve workers’ rights and uphold a country’s professional standards. We’ve seen progress in recent years, but there’s still a lot of room for improvement. 

Employers must understand a country's labor and employment situations before hiring candidates from that country. Non-compliance could mean hefty fines, legal scuffles, and other penalties.

But, as we all know, legal matters can be tedious. And, with the rise of distributed teams and fierce competition for talent, the last thing you want to be doing is researching legal hiring requirements in different countries.

With Oyster, you don’t have to. We're a global employment platform that provides clients with all the tools they need to hire employees anywhere globally. You can quickly hire talent from anywhere in the world, and you can trust us to iron out the kinks.

Contact us today to speak to an expert or get a demo. The world is your oyster!

About Oyster

Oyster is a global employment platform designed to enable visionary HR leaders to find, engage, pay, manage, develop, and take care of a thriving distributed workforce. Oyster lets growing companies give valued international team members the experience they deserve, without the usual headaches and expense.

Oyster enables hiring anywhere in the world—with reliable, compliant payroll, and great local benefits and perks.

About the Author

Oyster is a global employment platform designed to enable visionary HR leaders to find, engage, pay, manage, develop, and take care of a thriving distributed workforce.

About the Author

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