Managing furloughs and layoffs in multiple countries has always been difficult. This article examines how COVID-19 has made this even more challenging for multinational companies that now have to consider diverse foreign laws that have been enacted in response to the pandemic. Managing human resources issues for a multinational company is challenging even during the best of times. Global human resources managers know that it’s rarely possible to have a single set of policies and benefit packages that can be applied consistently throughout the company, regardless of the location. Different cultures, standards of living, economies, welfare systems, and legal systems make that impossible. While many companies succeed in having a single Code of Conduct or consistent non-discrimination and anti-harassment policies, when it comes to administering pay and benefits or making decisions about hiring or layoffs, it’s much more difficult to do the same thing in every country where the company has operations.

Ordinarily, the inconsistencies in how global companies deal with tough economic decisions in different localities are not so noticeable because the effects of natural disasters, trade wars, or currency devaluations often do not affect all operations in the same way or at the same time. While a dramatic currency devaluation might have devastating effects on the operations in one country if the cost of production has suddenly increased, the operations in another might benefit if its product has become cheaper to buy. While a trade war may threaten a business in the countries that have imposed or been subjected to those tariffs, the economies of other countries may end up benefiting by the addition of new manufacturing facilities that would not be subject to retaliatory tariffs. Even the effects of a global recession are likely to be staggered and will not necessarily manifest themselves in every country at the same time. Hence, it is unusual for companies to have to furlough or lay off employees across the globe at exactly the same time. During the current COVID-19 pandemic, however, multinational businesses have found themselves considering salary cuts, furloughs and outright layoffs throughout their global operations. No country has been immune to the effects of this pandemic. Workers in every major economy have been required or strongly encouraged to “shelter-in-place,” while many industries have been forced to temporarily shutter either because of a lack of demand or because of a breakdown in the supply chain.

In this paper, we will look at the unique challenges that multinational companies based in the United States must confront when conducting furloughs and reductions-in-force during the COVID-19. We will begin by looking at the typical challenges that employers face when terminating expatriate employees, either foreign employees who have been hired to work in the United States, and American or U.S. Permanent Residents who have been “expatriated” on a temporary basis to work for foreign affiliates. We will then discuss why it is usually impossible to approach furloughs and reductions-in-force in the same way in different locations. We will conclude by looking at how newly enacted laws and welfare benefits that have been specifically enacted in response to the COVID-19 pandemic have further complicated the decision-making process that companies must go through when deciding whether to furlough or lay off employees.