The globalization of American business activities has resulted in employers increasing the number of employees they place on international assignments. This presents a unique challenge regarding the applicability of United States employment laws to employees in a foreign workplace.
Indeed, some employment laws apply to workers outside theUnited Statesand some do not. For example, employers based in the U.S., controlled by a U.S. company, or employers that have sufficient U.S. connections and employ U.S. citizens outside the U.S. are subject to Title VII of the Civil Rights Act of 1964 (“Title VII”), the Age Discrimination in Employment Act (“ADEA”), and the Americans with Disabilities Act (“ADA”). In contrast, the Fair Labor Standards Act (“FLSA”), the Equal Pay Act (“EPA”), and the Family Medical Leave Act (“FMLA”) do not extend their protections to employees stationed abroad.
In addition, a treaty between theUnited Statesand a foreign nation may confer special privileges or immunities onU.S.companies operating abroad. Depending upon the circumstances,U.S.employers may be immune fromU.S.employment laws if compliance with theU.S.statute would cause the employer to violate the laws of the foreign country in which the workplace is located.
The FLSA, which governs wage and hour requirements, specifically provides that it does not apply to employees whose service during the workweek is performed in a workplace within a foreign country. 29 U.S.C. § 213(f). Thus, the FLSA has no extraterritorial application to aU.S.citizen or a non-U.S. citizen who is employed by aU.S.company in a foreign nation.
II. Federal Discrimination Statutes
The EEOC has determined that federal discrimination statutes over which it has jurisdiction (Title VII, the ADEA, theADA, and the EPA) do have extraterritorial application, albeit limited.
A. Title VII
Title VII, which prohibits discrimination on the basis of race, color, sex, national origin and religion, applies toU.S.citizens employed in a foreign country. 42 U.S.C. § 2000e(f). At the same time, the extraterritorial application of Title VII does not extend to non-U.S. citizens who are employed byU.S.corporations and who are working abroad. Moreover, Congress amended Title VII in 1991 to include a “foreign laws” defense. This defense allows an employer to avoid liability if compliance with Title VII would cause it to violate the laws of the foreign country in which its workplace is located. 42 U.S.C. 2000e-1(b).
Like Title VII, theADAextends its protections toU.S.citizens working abroad in aU.S.based company, but it does not include non-U.S. citizens in its definition of “employee.” 42 U.S.C. § 12111(4). TheADAalso has a “foreign laws” defense which operates in the same manner as Title VII. 42 U.S.C. § 12112(c).
The ADEA, which prohibits employment discrimination on the basis of age, specifically defines “employee” to include U.S. citizens employed by U.S. companies in a foreign workplace. 29 U.S.C. § 630(f). Although the ADEA is silent as to whether its protections extend to non-U.S. citizens, the EEOC has not interpreted the ADEA as applying to non-U.S. citizens employed in a foreign workplace. Similar to Title VII and theADA, the ADEA also has a “foreign laws” defense. 29 U.S.C. § 623(f)(1).
It is worth noting that under the ADEA, a foreign subsidiary’s discriminatory conduct is attributable to itsU.S.parent.
The EPA prohibits sex-based discrimination in payment of wages for equal work. The EPA was enacted as an amendment to the FLSA and generally follows FLSA law. Therefore, the EEOC has applied the FLSA provisions and interpreted the EPA as having no extraterritorial applicability.
III. Family and Medical Leave Act (“FMLA”)
The FMLA allows covered employees to take an unpaid leave of absence from work for medical or family obligations while protecting their employment. The rights provided under the FMLA apply to employees who are employed within theU.S.or any of its territories. 29 C.F.R. § 825.105(b). The FMLA excludes bothU.S.and non-U.S. citizens working in a foreign workplace. In fact, the FMLA excludes those employees employed outside theU.S.or its territories when determining employer coverage or employee eligibility. 29 C.F.R. § 825.105(b).