The US securities exchanges (NYSE and Nasdaq) recently introduced new rules requiring listed US companies to adopt policies that provide for clawback of incentive-based compensation in the event of a restatement of the company’s financial statements.

In this Legal Update, Mayer Brown’s Employment and Benefits Group discusses the impact of the new rules on companies that may need to enforce such rules in other countries, including specific commentary on the laws of: Brazil, China, France, Germany, Hong Kong, Singapore, the United Arab Emirates and the United Kingdom.  In particular, we consider whether such policies are enforceable in those countries and how easily clawback can be achieved. 

You can read the update here.   If you have any questions, or would like to learn more about the topics discussed in this Legal Update, please contact Ryan J. Liebl, Laura D. Richman, Duncan A.W. Abate, Miriam Bruce, Aline Fidelis, Christopher Fisher, Régine Goury, Julien Haure, Hagen Köckeritz, Jad A. Taha, Jennifer C.W. Tam, Hong Tran or Guido Zeppenfeld.

In the latest episode of OPEN Talks (our series of short podcasts focused on diversity, equity and inclusion), Louise Fernandes-Owen, Global PSL for the Employment & Benefits Group, interviews Pensions Partner, Jay Doraisamy, Employment Partner, Christopher Fisher and Pensions Professional Support Lawyer, Katherine Carter about the new Pensions Regulator’s Guidance on Equality, Diversity and Inclusion.

In March 2023, the Pensions Regulator published guidance for trustees and employers on equality, diversity and inclusion (EDI); in this episode Louise, Jay, Katherine and Chris discuss the origins of the guidance, its key principles and suggested action points for trustees and employers. They also explore other regulator-issued EDI guidance, amongst other legal perspectives.

As a reminder, our Pensions team has produced a guide for trustees and employers, which sets out a series of trustee steps for the implementation of EDI in their scheme, the many employer-specific considerations, and how we can support trustees and employers in improving EDI in their scheme.

Listen to this episode here. If you would like to be notified of future OPEN Talks episodes, alongside the existing UK employment law podcast series, please contact us here.

The global workplace is continuing to evolve, with many businesses experiencing significant and long-lasting change alongside increasingly challenging market conditions.

For an employer considering potential redundancies and reductions in force (RIFs) across multiple jurisdictions, understanding how to navigate the various, complex, legislative frameworks is vital.

Our new practical guide on this topic highlights the key legal considerations for redundancy and RIF programmes across selected jurisdictions in the Americas, Asia, Europe and the Middle East. For more information, please get in touch with Louise Fernandes-Owen or one of the contacts listed in the guide.

In March 2023, the UK Government published its AI White Paper, setting out its proposals and expectations for the regulation of artificial intelligence (AI) in the United Kingdom. The White Paper discusses the empowerment of regulators and a principles-based approach to aid the use of AI in the United Kingdom.

In our latest AI Perspective, the Intellectual Property team discuss the various aspects of the White Paper in detail and share their legal viewpoint on how the White Paper should be interpreted and what businesses should be doing now, and in the future, to comply with regulatory developments in this space. Read the update here. If you have any questions, or would like to discuss any aspect of the White Paper further, please contact Mark Prinsley or Oliver Yaros.

On 18 April 2023, the German Federal Ministry of Labor and Social Affairs (BMAS) presented the long-awaited draft amendment to the Working Time Act and other regulations. Following the decision of the Federal Labor Court of 13 September 2022 (case no. 1 ABR 22/21), the new law is intended to specify how employers must precisely record the working hours of their employees. The BMAS has not succeeded in making a big splash. Instead, the bill comes with a number of inconsistencies and questionable simplifications for employers bound by collective bargaining agreements (CBAs).

Read more here New rules proposed to record working time | Perspectives & Events | Mayer Brown

In March 2023, the Pensions Regulator published guidance for trustees and employers on equality, diversity and inclusion (EDI). The guidance explains what EDI is, why it is important for occupational pension schemes to improve EDI in their trustee boards, and how trustees and employers can do so. For more information on the Regulator’s guidance, please see our legal update.

We have produced a guide for trustees and employers that sets out:

  • A series of trustee steps for the implementation of EDI in their scheme.
  • A number of employer-specific considerations.
  • How we can support trustees and employers in improving EDI in their scheme.

If you have any questions, or would like to discuss any aspect of the Regulator’s guidance or our guide further, please contact Jay Doraisamy.

We recently published the latest episode of OPEN Talks, where Miriam Bruce, partner in the London Employment Group, discusses artificial intelligence (AI), its regulatory landscape and the potential risks for employers using such technology. In rather timely fashion, that week also saw a number of conflicting developments in the AI space that reflect the risks and global legal positions discussed in our podcast (listen here).

Goldman Sachs released a report estimating that 300 million jobs could be exposed to automation at the hands of generative AI. While the labour market might face significant disruption, the report states that AI developments could lead to the creation of new jobs and higher productivity, eventually increasing annual global GDP by 7%.

These widely-reported predictions were closely followed by the UK government’s AI-focused white paper, “A pro-innovation approach to AI regulation“. Similar to Goldman Sachs’ report, the paper highlights AI as “critical” technology that can create new jobs and improve the workplace. The government is proposing to implement a new, initially non-statutory and principles-based, framework to bring “clarity and coherence” to the regulatory landscape for AI.

While the white paper is broad and wide-ranging, a key aim of the proposed framework is to build public trust in AI and it acknowledges the need to address wider concerns about bias and discrimination. The government’s initial proposal is for existing regulators to implement the framework and principles. For example, it provides a recruitment-based case study, where it foresees that the Equality and Human Rights Commission, the Information Commissioner’s Office and others will be encouraged to issue joint guidance and help businesses apply transparency measures and bias mitigation standards when navigating the regulatory landscape. (Look out for a wider discussion on the content and impact of this white paper on businesses by our IP team – this will follow shortly.)

Aside from the government’s white paper, and despite steps being taken in the UK, EU and the US to regulate AI, Italy recently became the first Western country to ban ChatGPT, pending an investigation into the software’s compliance with GDPR laws. A number of other countries, including China, Russia, North Korea and Iran, have reportedly already blocked ChatGPT. It remains to be seen whether other Western countries will follow Italy’s lead.   

Given the number of developments in recent weeks (with no sign of a pause…), employers should continue to watch this space, particularly if using AI platforms during recruitment or other stages of the employment relationship. While the race for regulation continues, until there is an established framework governing its development, implementation and use, AI will not be far from the headlines…

In the latest episode of OPEN Talks (our series of short podcasts focused on diversity, equity and inclusion (DEI)), Global PSL, Louise Fernandes-Owen, interviews Christopher Fisher and Miriam Bruce, partners in the London Employment Group.

They delve into four key areas of DEI that were prominent in 2022 and are expected to remain so in 2023: pay gap reporting, positive action, workplace investigations and artificial intelligence (AI). Chris and Miriam share their legal perspectives on the challenges surrounding ethnicity data collection, the increase in positive action measures, the role of regulators in workplace investigations and the growth of AI solutions in the workplace, to name a few. Listen to this episode here. If you would like to be notified of future OPEN Talks episodes, alongside the existing UK employment law podcast series, please contact us here.

In April 2023, the latest round of annual increases relating to the maximum awards available at Employment Tribunals and other statutory rate increases, such as statutory sick pay and the national minimum wage, take effect. Perhaps not unsurprisingly given the current inflationary environment, the increases are significantly higher than in previous years, most notably in respect to the compensatory award for unfair dismissal which benefits from an inflation-based increase of over 12% taking its limit to £105,707 (up from £93,878 in 2022).  

We set out below the key rates and limits that employers should be aware of.  

1.    Increase of limits on tribunal awards

Under the Employment Rights (Increase of Limits) Order 2023, the following new figures will apply from 6 April 2023:

  • the statutory limit on a week’s pay, which is used to calculate statutory redundancy and the basic award for unfair dismissal, will increase from £571 to £643; and
  • the maximum compensatory award for unfair dismissal will increase from £93,878 to £105,707. Note that unfair dismissal compensation remains capped at the lesser of the compensatory award or a year’s pay.

Employers facing potential Employment Tribunal claims with an effective date of termination of 6 April 2023 onwards should therefore be mindful of the significant increase to the compensatory award, in particular, when considering any potential exposure to unfair dismissal claims and during the course of any settlement discussions regarding such claims.

2.     Increases to other statutory rates

Employers should also be aware of the following statutory employment rate increases.

  • from 10 April 2023, statutory maternity, paternity and adoption pay will increase to £172.48 per week (or 90% of the employee’s weekly earnings, if lower) (up from £156.66);
  • from 10 April 2023, statutory sick pay will increase to £109.40 per week (up from £99.35); and
  • from 1 April 2023, the national living wage will increase to £10.42 per hour (up from £9.50).

Employers should ensure that they are ready to implement the changes above from the relevant dates.

See the Social Security Benefits Up-rating Order 2023 and the National Minimum Wage (Amendment) Regulations 2023 for further information.

3.    Increased Vento bands apply from 6 April 2023

On 24 March 2023, the Presidents of the Employment Tribunals published updated guidance on Employment Tribunal awards for injury to feelings and psychiatric injury, which sets out the revised Vento bands of compensation for the 2023/24 tax year, as updated for inflation.

For claims presented on or from 6 April 2023, the new Vento bands will be as follows:

  1. a lower band of £1,100 to £11,200 for less serious cases in which the discriminatory act is an isolated or one-off incident (up from £990 to £9,900 in 2022);
  2. a middle band of £11,200 to £33,700 for cases that do not merit an award in the upper band (up from £9,900 to £29,600 in 2022);
  3. an upper band of £33,700 to £56,200 for the most serious cases, for example, where there has been a lengthy campaign of discriminatory harassment (up from £29,600 to £49,300 in 2022);
  4. with the most exceptional cases capable of exceeding £56,200 (up from £49,400 in 2022).

Given current inflationary pressures, the increase to the upper band is particularly notable, and any employer facing claims where the Vento bands are in play post-6 April 2023 should therefore be mindful of these increases.

Many of our clients (in the US and outside) are tracking the progress of the Federal Trade Commission’s proposal to ban non-compete agreements.  It remains to be seen whether that rule will be introduced, and if it is, there will undoubtedly be litigation challenging it.  In the meantime, however, it is worth noting that the FTC has enforcement powers to require employers, on a case-by-case basis, to modify or eliminate non-compete agreements – a power it has now exercised four times in 2023.  Please see our report here for a summary of the latest case.