A Look Ahead: Employment Law Trends Shaping 2026

A Look Ahead: Employment Law Trends Shaping 2026

The WLG Labor & Employment Group opened the year with a wide-ranging discussion on what members are seeing in their jurisdictions as 2026 gets underway. While the updates reflected very different legal systems and regulatory timelines, the conversation revealed several shared pressures affecting employers globally: increased scrutiny of non-traditional work arrangements, greater emphasis on transparency and documentation, and a shift toward regulation that places greater emphasis on how work is carried out day to day.

Defining the boundaries of gig and platform work

Several updates focused on how jurisdictions are approaching gig and platform work, with markedly different regulatory paths emerging. Adam Thye of Shearn Delamore introduced developments in Malaysia, where the Gig Workers Bill has already been passed, with commencement expected during 2026. The discussion highlighted the formalization of this area of law, including statutory definitions for gig workers and platform providers, along with clearer rules governing service arrangements, safeguards, and redress mechanisms. He also outlined changes to the immigration policies with a higher threshold of salary reforms in expatriate employment, which in turn would also enable a longer duration of residence in Malaysia. 

A broader structural shift was described by Ajay Singh Solanki of AZB & Partners, who outlined India’s consolidation of 29 federal labor laws into four comprehensive labor codes. Within that overhaul, gig work has been expressly recognized as distinct from a traditional employment relationship, alongside the introduction of a new definition of "wages" and concepts such as fixed-term employment, the Worker Re-skilling Fund, and revised approaches to contract labor and worker classification.

By contrast, Gabriela Lima of TozziniFreire explained that Brazil remains in a holding pattern on platform worker classification. A Supreme Court ruling expected in 2026 is anticipated to address whether platform workers should be treated as employees, independent contractors, or fall into a newly defined intermediate category. The contrast across jurisdictions was clear: while some markets are moving toward legislative definition, others continue to rely on judicial outcomes to set direction.

Compliance moves closer to day-to-day operations

A second theme focused on how compliance obligations are increasingly tied to operational practices rather than abstract standards. Francisco Udave and Samuel Flores of Santamarina y Steta discussed developments in Mexico, including a proposed reduction of the maximum workweek from 48 to 40 hours, with a phased implementation extending through 2030. The discussion also emphasized the introduction of an electronic registry requirement to record when employees start and end their workday.

In a jurisdiction where all employees are entitled to overtime pay if overtime is worked, the move toward mandatory time tracking was described as a meaningful shift that could affect how employers assess working time, manage overtime exposure, and document compliance in practice.

Pay transparency and equal pay under sharper scrutiny

Several European updates focused on compensation transparency and equal pay obligations. Isabel Baeumer of Taylor Wessing outlined changes taking shape in Germany, where employers will face stricter obligations if a gender pay gap of five percent or more cannot be objectively justified. The discussion noted that while enforcement mechanisms are still developing, employers are expected to take a closer look at existing pay structures and be prepared to explain or correct disparities.

Alessandra Ferroni of Gianni & Origoni in Italy placed these developments in a broader European context by discussing the implementation of the EU Pay Transparency Directive, expected by June 2026. The directive introduces new obligations affecting recruitment and compensation practices, including pay disclosure during hiring discussions, restrictions on requesting salary history, and expanded rights for employees and works councils to request information related to pay gaps. The discussion reflected an expectation that these requirements will drive meaningful changes in how employers manage compensation policies.

Workforce flexibility and compensation adjustments

Other updates focused on practical changes affecting workforce structure and compensation. Gaël Chuffart of CMS DeBacker described developments in Belgium, including increases to meal voucher amounts, expanded annual working hours for students, and adjustments to wage indexation mechanisms affecting higher earners. These measures were described as having broad, day-to-day impact for employers operating in Belgium.

Isabel also noted recent changes in Germany affecting workforce flexibility, including updates that allow pensioners to earn additional income with tax benefits and enable certain time-limited employment arrangements that were previously restricted.

Employer of Record models under review

The discussion also addressed the growing use of Employer of Record models. Mark Lleno of SyCipLaw explained that EOR arrangements are increasingly common in the Philippines, particularly for foreign companies seeking to hire local talent without establishing a local presence. At the same time, he noted legal sensitivities arising from prohibitions on labor-only contracting and the risk of blurred employer identity.

Similar concerns were echoed by Eleonora Rainaldi of Gianni & Origoni, who explained that Italy tightly regulates the supply of personnel unless carried out by authorized agencies. The discussion emphasized that while EOR models may function in practice, their legal treatment differs across jurisdictions, and arrangements that appear workable in one market may present risk in another.

Workplace well-being and conduct obligations

Beyond classification and structural issues, members also discussed developments affecting workplace well-being and conduct. Gabriela noted that companies operating in Brazil will need to update risk management policies to address psychosocial risks, with a compliance deadline in May 2026.

In Mexico, Samuel highlighted new training obligations aimed at preventing violence against women, described as broad in scope and accompanied by formal compliance requirements that employers must document and maintain.

Looking Ahead

The discussion highlighted how employment law developments are moving at different speeds across jurisdictions, even when addressing similar issues. Questions around worker classification, transparency, and compliance are increasingly shaped by local realities, making it harder to rely on one-size-fits-all approaches. For employers operating across borders, comparing how these changes are unfolding in different markets remains an important part of managing risk and planning ahead.