Application of U.S. Employment Laws to Workers Employed Abroad

In today’s global economy, more and more companies employ workers in foreign countries – either non-U.S. citizens, or U.S. citizens employed abroad. These types of employment relationships present unique challenges for employers, including language and cultural differences that can be, or develop into, cultural barriers. Such cultural barriers have the potential to corrupt an employment relationship and lead to litigation. For this reason, it is essential that companies that employ workers abroad understand how U.S. employment laws apply to their foreign or “extraterritorial” employees. This article briefly examines the application of the major federal employment laws – the Fair Labor Standards Act (“FLSA”), Title VII, Equal Pay Act (“EPA”), Americans with Disabilities Act (“ADA”), Age Discrimination in Employment Act (“ADEA”), and Family and Medical Leave Act (“FMLA”) – to extraterritorial employees.


The FLSA, the principal federal statute regulating wages and hours, including the minimum wage and overtime compensation, has no extraterritorial applicability. The FLSA expressly provides that it “shall not apply with respect to any employee whose services during the workweek are performed in a workplace within a foreign country . . . .” 29 U.S.C. § 213(f). Thus, for example, a company would not be required to comply with the FLSA in compensating an employee who physically works in India during the workweek, whether the employee is a U.S. citizen or not.


Federal courts and administrative agencies tasked with enforcing the federal discrimination laws of the United States have determined that the federal discrimination statutes have very limited extraterritorial application.


The EPA, which prohibits discrimination in wages based on sex, was enacted as an amendment to Section 6 of the FLSA. 29 U.S.C. § 201 et seq. For this reason, the EEOC – the federal administrative agency tasked with enforcing the EPA – interprets the EPA as having no extraterritorial applicability, like the FLSA. See EEOC Enforcement Guidance N-915.039, § B (Mar. 1989).

B. Title VII.

By contrast, Title VII of the Civil Rights Act of 1964, which prohibits discrimination in employment based on race, color, religion, sex or national origin, does have some extraterritorial application. Aliens working for U.S. companies abroad are not covered by the Act. See Shekoyan v. Sibley Int’l, 409 F.3d 414 (D.C. Cir. 2005). But, U.S. citizens working abroad are protected. However, Title VII was amended in 1991 to include a “foreign laws defense.” Under this defense, an employer may escape Title VII liability for discrimination against a U.S. citizen employed abroad upon proof that compliance with Title VII would cause it to violate the laws of the country where the employee is stationed. 42 U.S.C. § 2000e-1(b). This defense is only available to U.S. citizens employed abroad by a U.S. company. Id.


The extraterritorial reach of the ADA is like that of Title VII. U.S. citizens employed by U.S. companies in foreign countries are covered by the Act, but foreign nationals employed by U.S. companies overseas are not within the Act’s definition of “employee.” 42 U.S.C. § 12111(4). Like Title VII, the ADA was amended in 1991 to include a “foreign laws defense” barring causes of action by U.S. citizens working overseas for U.S. companies where compliance with the ADA would violate the laws of the foreign country. 42 U.S.C. § 12112(c).


The ADEA, too, has some extraterritorial application. The ADEA applies to U.S. citizens employed abroad; its definition of “employee” includes United States citizens “employed by an employer in a workplace in a foreign country.” 29 U.S.C. § 630(f). However, like Title VII and the ADA, the ADEA includes a “foreign laws defense” that permits an employer to escape liability upon proof that compliance with the ADEA would cause it to violate the laws of a foreign country – e.g., if a country has a mandatory retirement age. 29 U.S.C. § 623(f)(1).

The EEOC does not interpret the Act to have any applicability to aliens employed by U.S. companies in a foreign workplace. See EEOC Enforcement Guidance N-915.039, § A (Mar. 1989). The Act itself is silent as to its application to non-citizens employed with U.S. companies abroad. The legislative history of the ADEA indicates that this omission was intentional. See H.R. Rep. No. 98-1037, 98th Cong., 2d Sess. 28 (1984) (ADEA was “carefully worded to apply only to citizens of the United States who are working for U.S. corporations or their subsidiaries. It does not apply to foreign nationals working for such corporations in a foreign workplace and it does not apply to foreign companies which are not controlled by U.S. firms.”).


The FMLA applies to “employees who are employed within any State of the United States, the District of Columbia or any Territory or possession of the United States.” 29 C.F.R. § 825.105. Both United States citizens and aliens are excluded from coverage under the FMLA if not employed within the territorial boundaries of the U.S. Id. Moreover, employees employed outside the United States are not counted for purposes of determining employer coverage or employee eligibility. Id.

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These articles are provided for general informational purposes only and are marketing publications of Gentry Locke. They do not constitute legal advice or a legal opinion on any specific facts or circumstances. You are urged to consult your own lawyer concerning your situation and specific legal questions you may have.