Employment law challenges in the metaverse

The metaverse enables companies to transfer individual tasks – or even entire jobs – to the virtual space. The new virtual environment raises numerous employment law issues.


Metaverse – a new digital world

Technological change has revolutionised the desktop-centric use of the internet in the workplace in recent years. Continued improvements to the mobile internet have transformed everyday working life, making it possible to work from anywhere. The result has been a growing trend towards remote work. In many professions, working from home or elsewhere is now entirely straightforward. The coming years are likely to see a further shift from mobile internet usage towards internet usage in virtual environments: According to Mark Zuckerberg, it will be possible to switch between virtual office, a metaverse concert with friends, and your parents’ virtual living room – at the click of a mouse in the metaverse.

Virtual reality headsets, personalisable avatars and virtual offices could shape the working day of the future. The metaverse has created a digital space that allows companies to better connect with each other and with workers all over the world – using cyber-physical systems, digital copies of real objects, 5G virtual reality, and low-latency, AI-assisted data centres to develop products in the virtual sphere. Customer insights and feedback can be tested in a virtual environment before being implemented in real-world production. Manufacturers can digitally simulate assembly lines to test and optimise production processes – establishing an “industrial” metaverse that has the potential to make manufacturing more efficient, more innovative, and more profitable.


Practical implications

Transferring parts of the working environment to the metaverse has a number of employment law implications:

  • Unless precluded by individual or collective agreement, employers have the right to unilaterally instruct employees to work in the metaverse on a temporary basis for a specific reason – e.g. for meetings – provided that the necessary technical infrastructure is in place. However, if employees are to work primarily from the metaverse, it is unlikely that a unilateral instruction to this effect will be covered by the employer’s general right of direction. Businesses planning to operate a “metaverse workforce” should in particular modify their model employment contracts before doing so.
  • Compliance with occupational health and safety requirements is another issue likely to arise if employees are working in the metaverse. Working in a virtual space using virtual reality technology will have to be assessed on a case-by-case basis. On one hand, it may be necessary to restrict the time spent in the metaverse; on the other, the technology can provide a more accessible environment for disabled employees.
  • Just like employees who work from home, employees working in the metaverse would generally be assigned to existing operations. However, it is also conceivable that any physical operation could be forgone entirely. If the workforce works in the metaverse only, what will be the implications in terms of co-determination? Will metaverse-based works councils be formed that are responsible for all employees working for a given company in Germany? Is the principle of territoriality appropriate at all in the world of virtual work?
  • As collaboration in the metaverse becomes more international, determining which jurisdiction’s employment law applies is likely to become increasingly difficult. While German conflict of laws rules, in accordance with Article 8(2) Rome I Regulation, generally rely on the physical place of work in cases where no specific choice of law is made, the laws of other countries do not always do so. Ensuring a heterogeneous level of protection in an international metaverse workforce is something employers need to consider up front, along with all the associated challenges, e.g. in the context of restructuring.
  • It is unclear what impact the metaverse will have on established remuneration structures. In other countries, metaverse workers are already being paid in cryptocurrency (e.g. employees of online casinos). This could cause significant problems under current German law, as section 107(1) Trade Regulation Act (Gewerbeordnung, “GewO”) requires all remuneration to be calculated and paid in euros.
  • The metaverse creates new opportunities to collect a wide range of data, such as facial expressions, gestures, physiological reactions to certain content, and data about a VR headset’s immediate environment. This increasingly puts the spotlight on employee data protection. Employees’ right to privacy – especially in the form of data protection law – must be taken into account.



As the world becomes more digital, companies need to prepare for the changes that transferring parts of the workplace to the metaverse entails. Where necessary, existing rules should be adapted to meet the needs of the digital environment. Businesses would be well-advised to introduce corporate guidelines for working in the metaverse similar to those previously drawn up for mobile work.


For a general overview of the legal challenges associated with the metaverse, see here