The World of International Mobility: Business Immigration Management from Risk to Opportunity. Presentation Notes

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1 The World of International Mobility: Business Immigration Management from Risk to Opportunity Presentation Notes CERC Annual Conference September 21 23, 2014 Whistler, B.C. Speaker: Julie Lessard, Lawyer, Partner BCF Business Law 1100 René-Levesque Blvd., 25th Floor Montréal (QC) H3B 5C9 Canada Disclaimer: This presentation contains general information only and the speaker and represented firm are not, by means of this presentation, rendering legal, business or other professional advice or services. This presentation is not a substitute for such professional advice or services, nor should it be used as a basis for any decision or action that may affect your business. The speaker and represented firm shall not be responsible for any loss sustained from such decisions or actions. Whereas employers have considered immigration as a mere administrative compliance burden that someone should be managing, today most enterprises are taking a different look at what immigration risks are and where they are. From risks of pure non-compliance or illegal work to risks inherent to mergers and acquisitions or risks related to business delivery models, the consequences of risk materialization are today way beyond a bad travel experience for an expatriate. In the modern world, companies such as Microsoft Corporation do include immigration challenges in the risks disclosed to investors. Whether the management goal of immigration is to fill a skills gap, to attract innovative talent, to develop international talent or to be able to deliver services at foreign locations, compliance is now raising concerns at all levels of companies operations, from HR and the global mobility team to the company s legal counsel, top management, and business risk management teams. However, not all companies have been yet able to adapt their forces, models and practices surrounding immigration and are still taking risks that are disproportionate to their goals. In this presentation, we analyze the existing approaches to business immigration and mobility management, we identify the traditional and the emerging risks connected to managing today s mobile workforce; and finally, we propose some organizational self-assessment tools and practical starting points for building a modern and compliant global mobility management (GMM) programme. I. BUSINESS PRACTICES ON THE GROUND 1

2 The Decentralized Model: Traditionally, business immigration was considered a result-oriented, purely mechanical compliance exercise. Relationships with immigration services providers were established as needed. The measure of success under this decentralized, ad hoc approach is the time required to accomplish the task of getting the employee from point A to point B in desired status. This decentralized model presents a practical, but often narrow view of immigration realities. However, this model often disconnects immigration from tax and other global compliance aspects, making the following aspects difficult to manage on organization-wide level: Gathering and tracking key data (expiry dates, audits); Assessing and managing risks in immigration process; Consistency of representations before the government; Cost Control; Assuring host- and home-country legal compliance for the company; Maintaining a consistent level of quality vis-à-vis the business and the expatriate; and, Narrow view of immigration, disconnect from tax and other compliance aspects. Modern Global Mobility Management (GMM) Programmes Built for Success: Based on the philosophy that Global Mobility Management (GMM) requires coherent, multidimensional policies and programs to be successful, two models are gaining prevalence among businesses operating globally: Centralized Control: Under this model, all immigration processes are managed from the Corporate Headquarters or main offices within major world regions, ensuring a high level of control over the GMM process. This centralized control model suggests that a majority of visas and work permits are prepared in-house. However, complex cases and unfamiliar jurisdictions are managed internally but outsourced to multiple service providers. GMM Project Manager: This blended approach to GMM management delegates the core responsibility for GMM to a «Global Service Provider», typically a firm or a group of firms selected in a competitive bid, which typically includes relocation, tax and immigration law specialty firms. The «Global Immigration Provider» owns responsibility for immigration work in all jurisdictions and plays a key role in company s compliance process by maintaining an integrated immigration management database, providing regular status reports, conducting internal audits, and feeding relevant legal education and information to its client. Overall, the benefit of migration from the traditional approach to the Global Project Manager approaches is undeniable when we measure a company s ability to respond to the growing challenges of immigration compliance and consequently its ability to mitigate immigration-related risks. II. UNDERSTANDING THE NEW IMMIGRATION LANDSCAPE The key to being a compliant employer in the modern challenge-ridden environment is to be fully aware of not only the letter of immigration laws, but also to keep up to date with the rhythm of constant 2

3 changes in immigration policy and enforcement that may impact business operations. Challenges in these areas are manifold: The Complexity of Law: Immigration laws are amongst the most voluminous and complicated bodies of national laws, comparable to tax code in their complexity. Multiple government agencies (Immigration, Labour, Border Security, Foreign Affairs) are involved in the immigration process, each introducing separate sets of regulations that must be complied with. Restrictive Interpretation Trends: As national governments recognize political pressure from unemployment, trends emerge towards a more restrictive interpretation of existing laws, making immigration practice more difficult and the results, less predictable. Increased Government Surveillance: Governments worldwide have invested billions in sophisticated technology to make borders safer and have acquired the capacity to create and maintain accurate, current, traceable information on the movement of foreign nationals within their borders. Searches of personal electronic devices and open-source internet increase exposure risks for travelers and companies. Complexity of Global Business Models: Internationally active companies still too often secure contracts without an exhaustive review of the immigration aspects of each project. Multiple subcontractors who are involved in joint projects in foreign jurisdictions may have little or no understanding of who owns the responsibility for securing immigration documents or assuming immigration-related risks. Modern business models have also created a rise in frequent business traveler population, which may present formidable challenges in terms of mobility management as well as tax management, through the creation of permanent establishment. Peripheral Issues (Anti-Corruption, Public Relations, Union Relations, Controlled Technology and Exports): A number of peripheral issues have gained prominence, including the increased media attention to immigration during economic downturn and related pressure from unions, the interplay between immigration, tax, anti-corruption and export controls / controlled technology legislation. Companies should consider the application of these laws to extraterritorial activities of companies present in either jurisdiction. III. RISKS INHERENT TO BUSINESS IMMIGRATION Non-compliance to a vast array of rules and regulations related to immigration can potentially result in the following significant risk exposure: Criminal and Civil Persecution: The emphasis in immigration enforcement has shifted from the worker s personal liability for immigration violations, to the liability of the employer and its corporate officers who may be subject to both civil and criminal penalties if found noncompliant. Popular expatriate destinations (the United States, Canada, UK, Australia and others) have implemented comprehensive enforcement programs and now impose heavy penalties for non-compliance. Administrative Record-Keeping: In addition to pure non-compliance resulting in civil or criminal prosecution, organizations now have a heavier burden of administrative compliance. 3

4 Many jurisdictions introduce dense regulatory requirements with regard to immigration-related record-keeping and record preservation, and increased audit frequency and scope. Risks Assumed through Corporate Restructuring: Mergers and acquisitions may involve acquired risks related to the former owner s non-compliance. In addition to these inherited risks, the M&A may result in loss of work authorization for part of the workforce in a temporary or permanent manner. Global Business Execution Models and Frequent Travelers: Companies still are reporting very little awareness of tax and immigration issues when persons operate outside of defined company mobility programs. Even when there is awareness, difficulty remains in tracking mobile employees: 45% of respondents in a Certified Equity Professional Institute Survey, Santa Clara University, are still developing an effective approach to managing data capture for tracking movement of cross-border employees. Employer-Employee Litigation and Illegal Practice of Law: Most jurisdictions have complex rules related to legal practice, defining activities constituting practice of law and restricting practice of law to members in good standing of the Bar. By inadvertently crossing the line and answering employees specific questions on immigration strategy, even with good intentions, inhouse immigration specialists can expose themselves and the employers to potential liability. IV. BEST PRACTICES FOR RISK MITIGATION When managed well, global talent mobility can benefit businesses and employees alike. Employers can build and sustain a successful GMM system by implementing best practices, such as: Conducting a thorough assessment of existing practices and identifying tangible risks; Ensuring that the planning is understood and accepted by all players (HR, Global Mobility, legal, management, and business units on the ground ) to ensure successful implementation; Choosing and implementing an official GMM policy and plan including the following crucial elements: Developing a comprehensive Corporate Immigration Policy Document; Introducing Corporate Training Plans documenting specialized knowledge and skills transfer, when required; Appointing an internal immigration compliance officer accountable for organizationwide review of GMM procedures; Conducting an internal audit and subsequent audits of documentation; Establishing clear policies and practices for document retention, archiving, and period reporting, including the use of Information Technologies for GMM management; Developing and distributing internal communication procedures for any immigrationrelated complaints from employees. Once the desired model is operational, the employer should continue the efforts targeted towards mitigating immigration-related risks by doing the following: Regularly reviewing policies and programs to ensure efficiency and compliance; 4

5 Staying current by frequently training all players; Reviewing policy documents and global mobility contracts; Engaging in a meaningful collaboration with legal services providers. Finally, it is just as important to see the target of this complex process: mitigating risk and eliminating non-compliance