The largest economy in the world isn’t the United States or China, according to the Central Intelligence Agency World Factbook. It’s the European Union. This group of 27 member states has also been at the forefront of employment law trends, addressing topics ranging from conditions of employment and leave laws, to digital data privacy protections. For employers to conduct business in the world’s largest economy, HR professionals must know what the region’s employment laws are and how they are developed. Most EU employment laws are enacted as directives. Like regulations, directives are binding on the member states and have precedence over domestic laws. Don’t make the mistake of thinking they work like U.S. employment laws. Directives don’t tell companies how to treat employees, for example. Rather, directives set an objective or policy and then “direct” the governments of member states to take steps to meet that objective. A directive sets a minimum standard or base line, and each EU member state must pass legislation to give effect to that standard or base line. There is a call for deregulation in response to the global economic downturn and the need to increase competitiveness. Given the already comprehensive coverage of EU employment law, such a trend will be welcomed by employers.
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