President Biden issued the first-ever Presidential Memorandum to promote labor rights outside of the U.S.
Why it matters: Global employers’ labor relations policies in the U.S. and abroad may be impacted. Biden's new global labor agenda indicates a proactive stance from U.S. government officials who are set to utilize all available resources to bolster unionized collective bargaining globally. The memorandum anticipates incorporating a Rapid Response Mechanism like we have with Mexico, into future trade agreements, under which the government can target U.S. companies failing to adhere to overseas labor codes. This raises both reputational and economic risks for global companies.
The big picture: This “new collectivism” strategy dovetails with European allies who are advancing legislation like the EU Corporate Sustainability Reporting Directive. Effective January 2024 for many companies, this directive will compel large companies, including some U.S. companies, to disclose detailed information about their international labor relations status, including specifics on union recognition and collective bargaining agreements, or lack thereof.
“Whole-of-government” approach. This means all U.S. agencies interacting with foreign countries will enhance their abilities to address key labor issues globally. This includes the Departments of State, Treasury, Defense, Justice, Agriculture, Commerce, Labor, Energy, and Homeland Security, as well as the International Development Finance Corporation, the Office of the United States Trade Representative, and USAID.
Protect "internationally recognized labor rights" across the globe. This action significantly expands the conventional international safeguards against forced and child labor to now include the protection of the right to freedom of association and collective bargaining. Moreover, it urges the elimination of discrimination in employment and occupation while promoting fair working conditions regarding minimum wages, working hours, and occupational safety and health. Notably, it describes labor rights as "internationally recognized labor principles incorporated into United States trade agreements" implying that these rights do not necessarily derive from pertinent international conventions or instruments. For instance, under the USCMA, companies in Mexico need to “comply with domestic freedom of association and collective bargaining laws.”
Leverages U.S. trade and finance to further the Biden administration’s labor agenda in several ways:
- Encourages collaboration with unions, workers' organizations, and civil society groups to assess the Sustainability Framework of the International Finance Corporation. Notably, no collaboration with employers or employer groups is contemplated in this section.
- Enforces labor safeguard requirements in multilateral development bank financing, focusing on freedom of association and collective bargaining, occupational health and safety, combating forced labor and child labor in supply chains.
- Emphasizes the enforcement of the Uyghur Forced Labor Prevention to strengthen the existing prohibition against the importation of goods made wholly or in part with forced labor into the United States and to end the systematic use of forced labor in the Xinjiang Uyghur Autonomous Region.
Collaboration with global organizations and NGOs. The directive in the memorandum implies an intention to actively include multilateral organizations and to form coalitions, directing agencies to increase cooperation with global NGOs to pursue aspects of the initiative.
What’s next: The memorandum encompasses a wide range of actions, including some outreach to business, and it remains uncertain how the Biden administration will execute and uphold a global labor agenda. HR Policy has reached out to the pertinent agencies to seek further details and offer our perspectives on global labor practices.