Regulatory updates
for Global Employers

Sweden has proposed a new Platform Work Act to implement the EU Platform Work Directive, introducing a presumption of employment where platform workers are subject to direction and control. The draft also includes transparency requirements for algorithmic management and automated decision-making affecting workers. The proposal is under consultation and intended to meet the EU implementation deadline of December 2026.

Starting April 2026, Japan will introduce the Child and Childcare Support Contribution, a new levy collected alongside health insurance premiums to fund expanded child-rearing support measures. Employers and employees will share this contribution, with the average monthly amount reaching approximately ¥800 per person by fiscal 2028. This initiative aims to enhance child allowances and support services to address Japan's declining birthrate.

The Ministry of Health, Labour and Welfare has proposed decreasing the employee contribution rate for unemployment insurance from 0.55% to 0.50%, effective April 1, 2026. This adjustment aims to alleviate the financial burden on employees while maintaining the stability of the unemployment insurance system. Employers should prepare for this change in payroll processing and budgeting.

Finland has proposed amendments to the Employment Contracts Act allowing fixed-term contracts of up to 12 months without justification in certain cases, alongside reducing layoff notice periods and limiting re-employment obligations to larger employers. The reforms aim to increase labour market flexibility and simplify hiring conditions, particularly for smaller employers. The proposal is subject to parliamentary approval and is expected to take effect from April 2026 if enacted.

Effective 1 April 2026, New Zealand will raise the default KiwiSaver contribution rates for both employers and employees from 3% to 3.5%. Employers should update payroll systems to reflect this change and prepare for a further increase to 4% scheduled for 1 April 2028. Additionally, compulsory employer contributions will extend to employees aged 16 and 17 from 1 April 2026.

Ongoing geopolitical unrest and regional uncertainty are prompting many expatriate employees in the UAE to temporarily return to their home countries or relocate to alternative residences. While short-term remote work can provide a practical stopgap, it carries increasing compliance risk if extended beyond a limited window. In practice:

• Short-term remote work may be feasible, but typically only as a bridge of 4 to 8 weeks.
• Stays beyond 30 to 60 days (depending on the country) can trigger local tax, employment law, and permanent establishment risks.
• UAE employment contracts may remain in place temporarily, but are not designed for long-term cross-border work.

As relocations extend, the compliance position becomes more rigid and requires formal action:

• UAE employment must be terminated if the employee is no longer living and working in the country.
• Employers must complete end-of-service payments, including gratuity, and cancel visas.
• Ongoing remote work under a UAE contract becomes non-compliant and increases legal exposure.

To retain talent without taking on this risk, Employer of Record solutions can act as a compliant way to retain talent:

• Employees are rehired compliantly in their new country.
• Payroll, tax, and benefits are managed locally from day one.
• The employee continues in the same role with minimal disruption to the business.

Argentina has enacted Labour Modernization Law No. 27,802, introducing wide-ranging reforms to employment relationships, including changes to contract types, working time, compensation structures and severance calculations. The law also narrows certain employment protections, clarifies worker classification rules, and introduces measures aimed at reducing litigation exposure and increasing flexibility for employers. Additional provisions include the creation of employer-funded severance support mechanisms and adjustments to social security contributions.

Brazil’s Senate has approved legislation to gradually extend statutory paternity leave from five to up to 20 days, introduce a social security-funded paternity benefit, and provide job protection during and after leave. The measure is pending presidential sanction and, if enacted, will begin with 10 days of leave from January 2027, increasing to 15 days in 2028 and 20 days in 2029. The reform would shift wage costs from employers to the social security system while maintaining full salary during leave.

Mexico has enacted a constitutional reform reducing the maximum workweek from 48 to 40 hours, with publication in the Official Gazette on 3 March 2026. The reform establishes a gradual reduction in weekly hours through 2030 and requires Congress to amend the Federal Labour Law within 90 days. The changes introduce new limits on overtime and reinforce protections to ensure no reduction in employee pay or benefits.

The National Social Security Administration (ANSES) has issued Resolution 38/2026, adjusting the minimum and maximum taxable bases for social security contributions. Effective from March 2026, the minimum taxable base is set at ARS 124,481.49, and the maximum at ARS 4,045,590.45. Employers should update payroll systems to reflect these changes for compliance with the new contribution thresholds.