AI in the workplace

AI and its potential to affect employment has been a talking point for some time. Now that AI is here to stay, the focus is on how to regulate it. First off the mark, the EU Artificial Intelligence Act came into force on 1 August 2024, with a phased timeline. Most provisions take effect from 2 August 2026, but those on the potential use of emotion recognition AI systems in workplaces apply earlier, from 2 February 2025. Outside the EU, few regions have formal regulations in place in this area, though some such as Singapore and Indonesia have recently introduced guidelines.  

DEI and pay

On returning to the White House, the Trump administration has abolished diversity, equity, and inclusion (DEI) programs across federal agencies, along with affirmative action programs for federal contractors. Meanwhile, governments in other countries and regions continue to pursue their DEI priorities, with a focus on women’s rights, parental leave, and pay equality. 

Worldwide, including in the United States, many governments are drawing up pay transparency laws to help reduce pay disparities and, more broadly, to prevent discrimination. Penalties for non-compliance with pay laws range from fines to naming and shaming companies, depending on the jurisdiction.   

Vulnerable workers

The gig/platform work market size is expected to reach US$1,847 billion by 2032, according to Business Research Insights. But the independence and flexibility on offer to gig workers is accompanied by risks if workers have limited or no employment rights. The EU Platform Work Directive, in effect since 1 December 2024 and coming into force in late 2026, aims to address this issue. China also introduced guidelines in November 2023 to protect some platform worker rights. 

Disguised self-employment and the misclassification of employees are under scrutiny, too. The consequences for employers range from criminal proceedings – a real possibility in Germany – to liability for back taxes and related costs. 

Flexible working

Remote working in all its forms offers employers and employees distinct advantages: lower office overheads and the prospect of a better work–life balance, for a start. But in the face of concerns about whether employees are more productive at home, many U.S. employers have ordered employees back into the office full-time. In-office working is once again largely the norm in most Asia Pacific jurisdictions. 

Even where remote working remains common, there can be drawbacks for employees, including the risk that boundaries between home and work life become blurred. Countries that have a “right to disconnect” – Spain, France, and Mexico, to name a few – address the risks for employees of being “always on” by giving them the right not to be contacted outside their normal working hours. 

Local approaches to implementing the right vary, from internal policies in Spain to a voluntary code in Ireland, and change may be on the way in the United Kingdom. In the Netherlands, an attempt to implement the right to disconnect was rejected. 

Non-competes and competition

Non-compete clauses in employment contracts elicit mixed reactions. While the clauses protect trade secrets, confidential information, and other legitimate business interests, they restrict employee mobility, with a knock-on effect on economic growth. Measures to balance both parties’ interests include paying employees during non-compete periods and limiting their duration. 

In the United States, a federal court blocked a Federal Trade Commission rule that cited competition concerns to justify a nationwide ban on most employer–employee non-competes. As a result, the enforceability of non-competes and other restrictive covenants remains governed at state level, though individual states differ in their approaches. While some states permit reasonable and narrowly tailored non-compete covenants, California has an outright ban and allows employees to sue employers simply for including banned non-compete clauses in agreements. Washington voids non-competes longer than 18 months in most cases, and entirely for employees earning less than a minimum amount. 

Freedom of expression

Freedom of expression, including in the workplace, is guaranteed under Article 10 of the European Convention on Human Rights. Similar protections apply in other regions and areas outside Europe. For the most part, whichever regime applies, employees are free to express their views as long as they don’t insult their employer or discriminate against other employees. But whether an employee is protected when expressing their views depends on details such as the damage caused to the employer/other employees and whether the employer’s response is proportionate. An employer can legitimately take action in a range of circumstances, regardless of where the remarks are made – privately, on social media, or inside or outside work. But beware, approaches vary by jurisdiction. 

Mass dismissals and redundancies

Mass dismissals are often contentious. Many countries and regions adopt strict legal procedures that include collective consultation and notifying or getting consent from government authorities. Failure to comply can result in significant penalties, which in turn generate negative publicity and can damage a company’s reputation. The law aims to balance employers’ needs with workers’ protections during dismissals, which is far from simple and typically reflects the political priorities of the government of the day. 

Even if the underlying law has not changed, what it requires can be uncertain. In Germany, a European Court of Justice referral will clarify whether failing to follow notification requirements voids subsequent dismissals.