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Staying Ahead of the Compliance Curve – Heading Off Risks in Short Term Assignments

10 Apr

By Ryan Chargois

When it comes to assignment planning, the thought, “If only we had known in advance,” probably comes up more often than anyone would like. It can seem as if all the effort that goes into tracking and reporting on short-term assignees and global business travelers is trying to address the fact that often companies simply don’t know in advance.

Business needs arise and require immediate attention, and if an employee can get on a plane within 24 hours without waiting for a visa, the pressure to get that person to the airport can be incredibly high. “When a big project comes up, or something goes down or gets broken and the business needs help, the most important thing to the manager is to get someone there fast, especially if it’s a customer situation,” says Liane Grametbauer, GMS, program manager for global mobility and immigration with National Instruments Corporation (NI) in Austin, Texas. As a result, even companies with strong policies and engaged global mobility professionals continue to face challenges to ensuring legal compliance.

Unfortunately, the cost of missing something can be high, both for the employee and the organization. Employees who try to enter a country without the correct immigration status, or who are found to be working illegally after entry, can be fined, denied entry, or deported. The sending employer and its local affiliate—or even worse, a client hosting the employee—can face fines, reputational damage, and loss of immigration sponsorship privileges.

Legal penalties are not the entire story; the impact to operations can also be extreme. Short-term assignees are often traveling to meet critical business needs, and a delay or work stoppage due to a last-minute immigration violation can result in contractual default or other penalties. Other costs can arise from tax noncompliance, particularly when an employee has unintentionally spent more time in a country than she is allowed.

These costs and penalties are becoming more of an issue as immigration enforcement efforts around the world increase in response to economic protectionism and security concerns. Noncompliant employees are being “caught” more often. According to Grametbauer, “For more than a year we’ve even seen higher scrutiny at the U.S. border for employees who are coming into the country for meetings lasting longer than a couple of weeks. For employees entering for longer than a month, border officers are starting to request additional documentation about what exactly they are doing, so we are proactively providing detailed letters for trips that we don’t consider assignments.”

To manage these risks, managers need to know when to get global mobility involved, and nothing can replace recursive education. “An education campaign needs to be ‘rinse and repeat,’ because the laws change,” says Sheryll Young, GMS-T, global mobility adviser with Amec Foster Wheeler in Ontario. “Last year, for example, we had the Tier 2 Skills Transfer visa available to us in the U.K., and now, only six months later, it’s not an applicable strategy. Everything changes quickly in immigration, and as global mobility professionals we have to stay current to be best positioned to educate the business, when needed, with current information.”

Grametbauer agrees: “It is really hard to identify and get in front of the right people, especially in a large organization. If someone isn’t in immigration all day long, they may not remember everything they need to.” When global mobility does get in front of the right people, that time has to count, and there may be specific compliance risks with certain types of employees that they need to know about. This article discusses a few.

Prevalent particularly in the energy and oilfield services sectors, rotators look very little like the long-term expats on which most immigration systems are based. They are sent into a location for repeated, successive stays to work for short periods. Immigrants are needed because of their specific expertise, but they do not take a position with a host organization’s staff. And they definitely do not take up residence in the host country.

To a certain degree, rotators present a simpler problem than other types of short-term assignments: They are clearly working. Few countries would consider a rotating oilfield worker to be a legitimate business visitor, so that worker will typically require work authorization. But from every other perspective, these are difficult assignments to manage.

Accurate reporting on rotators can be elusive. Though steps are taken to carefully track their days in-country, they may not show up in the host country’s HR systems. This makes local reporting on foreign workers, and local tax filings, difficult. When the rotator’s employer does not have offices in the country where work is performed, there may be no local HR or global mobility staff looking out for the employee at all. At a minimum, rotators need to be correctly identified as such in their home-country HR system, and plans need to be made for immigration and tax counsel to take care of any local reporting requirements.

It can also be difficult to determine what immigration status is appropriate. A rotator’s deployments can be seen as a series of successive short-term assignments. Individually, a single trip may be handled with a short-term work visa in countries that have that option. But rotators are usually put on a rotating schedule over a series of months, so that the overall or aggregate time spent in the host country means that the employee will need a long-term work permit. Unfortunately, there is often a disconnect between the requirements of a long-term permit and the realities of a rotator’s assignment.

Many countries impose local content or training commitments on sponsors of foreign nationals; obligations are important politically and economically to the host government. In those cases, it can be difficult to explain and substantiate the continued benefit to the local workforce made by a rotator, who is in the country only for two or three weeks at a time on a periodic basis.

The disconnect is also seen in the complexity of arranging local registration and extension procedures. Local registration at an immigration office will often conflict with a project or rig schedule, where the employee’s time in-country is intensely maximized for economic output and does not allow for time spent off-site. Extension applications frequently require that an individual be present in the country for some period during the adjudication of a work permit or visa extension, which may be longer than the employee’s scheduled rotation. The rotation schedule may need to be altered to accommodate these procedures.

Professional services consultants are some of the savviest global travelers. They are adept at thinking on their feet, can talk through just about any situation, and often have a long history of problem-free international travel. That history of success in “getting past” immigration control is often the most difficult obstacle for employers to overcome in their compliance efforts—an employee who has never had a problem will assume his track record will continue, and will not be motivated to reach out to global mobility.

The other major obstacle to managing a consultant’s immigration status is that a consultant’s work can be difficult to distinguish from a business trip. Consultants are transferred to work in a new office— they are not hired by the company to which they are providing consulting services. Their on-site consulting work often consists of attending various meetings in conference rooms with various stakeholders, and their engagement may be only for a short period. This all contributes to the impression that they are “just” business visitors. However, the fact that they are providing professional services and potentially doing work that a local worker might otherwise do will almost always trump these factors and trigger the need for a work permit.

From an immigration standpoint, the most difficult type of consulting engagement occurs when the consulting company does not have offices in a host country. For example, a project manager sends a consultant to spend three months working at a client site in a country where the consulting company doesn’t have a local presence. These engagements often require special planning.

While some countries, such as France and Australia, will permit a company with no local presence to file a work permit application, most do not. If they don’t, one possible solution is for the client’s local offices to provide support, and in some cases that may involve the client applying for a work permit. This is a substantial request to make of a client; by filing, the client is disclosing the presence of the foreign national to the government, and otherwise putting its reputation and resources on the line for the visiting consultant. If the client does not expect to provide that support in advance, they may be unwilling to do so.

In many countries, including the U.S., the U.K., and Canada, some maintenance, installation, service, and configuration work can legitimately be performed in visitor status. This work is exempted from a work permit requirement in order to facilitate international trade, so long as the requirements for visitor status are otherwise met.

Similarly, it is not uncommon for a foreign national to be permitted to enter a country to perform emergency repair services in visitor status—especially when there is a threat to the environment or people’s lives are at stake. However, it is just as common for activity of this type to run afoul of visitor rules and to require some type of work authorization.

This type of work is often very short-term, comes up with very little notice or planning, and involves a need to fix a specific problem or finish a loosely defined project—thereby carrying no specific end date. As a result, the need for such work may not be routed by managers to global mobility because it is not understood as an international assignment. “Unfortunately, it can take one or two compliance failures for the risks to sink in and global mobility to be contacted,” says Young.

In addition to the overstay and tax noncompliance issues that result from untracked international trips, the greatest risk with this type of work is that the employee will perform the work without proper authorization. Even when a country does allow this type of work in visitor status, it is often under a narrow exception that has to be carefully documented and disclosed upon entry. The nationality of the selling and purchasing companies may need to meet certain requirements, or the service may need to be required in a contract of sale, a copy of which must be provided. If the traveler can’t show that he meets the requirements of the exception upon arrival, he may be denied entry. And if there is no applicable exception, a work permit is required. Given the variation across jurisdictions, it is useful to review the requirements in an organization’s target countries and to make sure managers know what they are.

An often overlooked compliance pitfall is the short-term local (i.e., noninternational) assignment given to a foreign national who is working in a country on a temporary work permit. For example, a temporary foreign worker in the U.S. may need to be sent from headquarters to work short-term at another office or client site. Depending on how the employee was hired, she may or may not come under the purview of global mobility. In the U.S., a student on an F-1 visa who was fortunate enough to be selected under the H-1B lottery and is now working on an H-1B visa may be treated as a local hire and would not fall under a temporary assignment agreement.

In the U.S., all H-1B workers, including those who are transferred from another international office, are tied to some degree to the place of work indicated in the Labor Condition Application (LCA) that was filed with the U.S. Department of Labor. While some very short-term placements are permitted, other changes of work site outside of the geographic area listed in the original LCA generally require that an amended H-1B petition be filed before the placement can begin.

Similarly, in Canada, changes in worksite may require the filing of a new work permit application or a new Offer of Employment on the Immigration, Refugees and Citizenship Canada (IRCC) Employer Portal before the assignment may begin. Many countries, in fact, tie work authorization to the specific position described in the work permit application.

As a result, it is important to monitor compliance with the conditions placed on any work permit. This may involve tracking the approved location and ensuring that all responsible managers are aware of that and any other limitations, or doing periodic checks to ensure that the conditions of the permit are being met. In addition to the types of employees mentioned above, international trainees, employees working to establish a new office, executives, salespeople, and other specific categories of employees often engage in international work on a short-term basis. While it is important to identify these employees and track the days they are spending on assignment, it is also necessary to review the immigration solution used for each and ensure that all of the compliance challenges are being met.

Ryan Chargois, partner, is with U.S. and global immigration law firm Foster LLP. Chargois can be reached at +1 512 852 4126 or