Cross Border Employment Issues: Essentials for Global Companies - - PowerPoint PPT Presentation

39 Offices in 19 Countries

Cross Border Employment Issues: Essentials for Global Companies

2

Introduction – Cross Border Issues

• Expanding Operations Globally – Some considerations for when

moving employees from outside U.S. into U.S. or from U.S. to

• ther Countries
• Cultural Issues
• Data Protection
• Business Visitor Visas
• Employment Agreements
• U.S. Work Visas
• Concluding Employment

David Greg Millstone Wald

david.millstone@squiresanders.com +1.216.479.8574 gregory.wald@squiresanders.com +1.415.393.9828 or +1.305.577.7016

3

Cultural Issues

• Country cultural issues
• Local company culture
• Integrating company culture

4

Data Protection and Privacy

• Transfer of Employee Data -EU law requires an “adequate level
• f protection”
• Join the Safe Harbor Network

– Notice – Choice – Onward Transfer – Security – Data integrity – Access – Enforcement

• Establish binding corporate rules

– Requires advance approval

• Conclude a model contract between the EU and US entity

5

US Visa Process

• Entering on permanent basis – Immigrant (green card)

OR

• Coming to the U.S. temporarily - Nonimmigrant
• Retain residence abroad
• Visiting or engaging in work related activities
• Presumed to have immigrant intent

– Dual intent - only for H’s and L’s – E-1/2 - limited extent

• Administering agencies
• Department of Homeland Security (DHS)

– Customs and Border Protection (CBP) – Immigration and Customs Enforcement (ICE) – Citizenship and Immigration Services (CIS)

• Department of State
• Department of Labor

6

Entry Procedures

• Approved petition, Notice of Action, I-797
• Visa Application at U.S. Consulate
• Inspection - admission by CBP at U.S. port of entry
• I-94 card - proof of legal status while in U.S.

7

Visitor Visas: Going Global

• Is a visa required?
• Short term vs. long term
• Purpose of stay
• Tourism or
• Engaging in business related activities
• In country registration
• Work permit may be required

8

Business Visitors - US

• B-1 Visa
• Foreign payroll
• Activity in U.S. benefits foreign employer

– Business meetings, training, & joint development projects – Prohibited from engaging in active employment while in

US

– Travel patterns and lengthy (beyond a couple weeks) raise

red flags

• Visa could be denied or traveler refused entry if improper use

suspected

9

Business Visitors – US cont.

• Visa Waiver Program
• 38 participating countries
• 90-day maximum stay
• Ineligible for extension or change of status
• Must first register online with Electronic System for Travel

Authorization (ESTA)

• Must possess e-Passport and machine-readable passport
• Canadians – visa exempt (all visas except for E)

10

UK - Business Visitors

• Non-EEA nationals visiting UK for a short time to do business on

their own or their employer’s behalf

• Maximum stay in any one visit is 6 months; separate visits must

not exceed 6 months in any 12 month period (academic visitors can stay for up to 12 months)

• Work/employment (whether paid or unpaid) is prohibited

regardless of duration of visit; permitted business activities limited

• Visitor can be refused entry and receive a re-entry ban of

between 1 and 10 years if Immigration Officer believes that there is an intention to take employment

• UK is NOT part of the Schengen agreement
• US nationals do not require visa stamp

11

Schengen Area

• The Schengen Agreement abolished internal borders, enabling

passport-free movement between 25 European countries.

• The Schengen visa is a visitor visa; purpose of the visit must be

leisure, tourism, or business

• The following countries adhere to the Schengen Agreement :
• Austria; Belgium; Cyprus; Czech Republic; Denmark; Estonia;

Finland; France; Germany; Greece; Hungary; Iceland (not a European Union Member State); Italy; Latvia; Liechtenstein (not a European Union Member State); Lithuania; Luxembourg; Malta; Netherlands; Norway (not a European Union Member State); Poland; Portugal; Slovenia; Slovakia; Spain; Sweden; and Switzerland (not a European Union Member State)

• US citizens can enter without visa for travel up to 90 days

12

Select Countries

• Canada
• Stay for less than six months
• Do not plan to enter the Canadian labor market
• Main place of business, and source of income and profits, is
• utside Canada
• Visa exempt: US (including LPRs), UK, Japan
• Mexico
• Stay for less than 180 days
• Acceptable business activities are broadly construed
• May not receive compensation from sources within Mexico
• Visa exempt: US, Canada, Japan, UK and Schengen

countries.

13

Select Countries, cont.

• Brazil
• Permissible activities include: meetings, conferences, fairs and

seminars; visit potential customers; and carry out market research

• Not authorized to work for any Brazilian company, regardless if paid or

not

• Up to 90 days; can be extended for another 90 days
• Visa exempt: UK, Schengen countries and most South American
• Visas required for nationals of US, Canada and Japan
• China (mainland)
• M visa for most business/commercial activities:
• Conferences, seminars or training sessions
• Business, fact-finding” meetings, or conducting negotiations
• On behalf of the overseas employer
• Up to 90 days cumulatively within a calendar year
• Invitation letter required
• Citizens of Singapore, Brunei and Japan visa exempt for up to15 days

14

Employment

• Expatriate or Expat
• An individual originally hired in one country and later assigned

to work in another country for the same company or affiliate.

• Foreign Hire
• A foreign national hired for local domestic position.
• Secondment
• Employed in the home-country, but renders services for the

host country entity.

• Expat localization or transfer
• Temporarily transferred to host-country entity
• Joint or co-employment
• Simultaneously working for both the home country and host

country entity. The home-country relationship may or may not be subordinated and thus suspended or “hibernating”.

15

Expat Contract Considerations

• At-will versus Fixed Term
• Tax Equalization and Preparation
• Expat Allowance/Cost of Living
• Housing Allowance
• Transportation
• To and from Assignment
• Local
• Home Leave
• Moving and Storage Expenses
• Personal or Emergency Leave
• Language Lessons
• Children’s Education
• Social Security
• Pension
• Reassignment/Repatriation

16

Expat Contract Considerations (continued)

• Health Benefits
• Immigration Issues
• Choice of Law
• Confidentiality and Trade Secrets
• Restrictive Covenants
• Term of Agreement
• Termination Grounds/Notice
• Compensation and Benefit Plans
• Stock and Option Agreements/Plans

17

Business Visas - The Alphabet Soup

Common business categories:

• Business visitors (B-1)
• Intracompany transferees (L-1)
• Treaty Traders and Investors (E-1 & E-2)
• Professionals (H-1B, H-2A/B, TN, O, P)
• Free Trade (H-1B1, Chile and Singapore; E-3, Australia)
• Trainees (J-1 & H-3)
• Students on Practical Training (F-1)

18

L-1 Intracompany Transferees

• Intracompany Relationship:
• Parent, subsidiary, affiliate, branch or joint venture
• Prior Employment Abroad:
• 1 year within 3 years preceding transfer to U.S.
• Qualifying Capacity:
• Executive, Managerial (L-1A)
• “Specialized” Knowledge (L-1B)
• Duration:
• L-1A = 7 years; L-1B = 5 years
• L-2 for dependent family members (spouse/children)
• Spouse eligible for work authorization
• Dual intent

19

H-1B

• For “specialty occupation”
• Minimum job requirements require attainment of at least a

bachelor’s degree or equivalent in a professional field (such as engineering, sciences, law, architecture, accounting, business specialties, teaching, etc.); or requires a license

• Up to of six years, in three year increments
• Can extend beyond if green card commenced no later than
• ne year prior to end of 5th year
• Proposed rule issued extending employment authorization to

spouses of H-1B workers in green card process

20

Additional H Visa Categories

• H-1B1 – Chilean and Singapore nationals
• Specialty occupation (professionals) similar to E-3 & H-1B
• Annual quota of 6500
• H-2B – Temporary non-agricultural workers
• For seasonal employment, pro athletes (hockey, baseball)
• 66,000 annual cap
• Must test US Labor market
• H-3 – Training visa
• For fields including agriculture, commerce, communications,

finance, government, the professions, etc.

• Maximum period of 24 months
• None provide for spousal work authorization

21

F-1 (Students)

• Educational institution accepts for enrollment & issues I-20
• School uses SEVIS systems through DOS
• Students applies for visa at US Consulate
• Curricular Practical Training (CPT)
• Approved part-time work during academic year
• Optional Practical Training (OPT)
• Post-graduate work authorization to 1 year
• If STEM (degree in Science, Technology, Engineering or Math

field) up to 29 months if work for E-Verify employer

• Cap Gap: F-1 status and OPT work authorization extended

through H-1B petition validity commencement if change of status filed prior to expiration of OPT

• Dependents – F-2; no work authorization

22

J-1 (Exchange Visitors)

• Participant in educational or cultural program
• Students, professors/teachers, scholars
• Trainees, specialists, au pairs, physicians
• Program administered through SEVIS (DOS) by:
• University, Company, Organization
• Most programs have 18 month max
• Participant might be subject to 2-year home residency

requirement b/f eligible for H-1B or green card

• Possible waiver
• Dependents – J-2; work authorization for spouse

23

TN - NAFTA

• Canadian and Mexican nationals
• Coming to U.S. to work in profession listed on NAFTA schedule

(i.e., engineers, accountants, lawyers, med. prof, scientists, teachers)

• Canadians apply at border (non-national dependents must
• btain visa at U.S. Consulate)
• Mexicans apply at Consulate
• Duration: 3 years for Canadians; 1 year for Mexicans
• Dependents – TD; no work authorization

24

O (Extraordinary Ability) and P (Athlete/Entertainer)

• O-1 - Extraordinary Ability in the sciences, arts, education,

business, or athletics

• O-2 - the artist’s or athlete’s support staff
• O-3 - O-1’s spouse and/or children; no work authorization
• P-1 - Internationally recognized athlete or performer
• P-2 - Artist or entertainer of reciprocal exchange program
• P-3 - Artist or entertainer to perform, teach, or coach under a

program that is culturally unique

• Visas available for accompanying/support personnel and

dependents; no work authorization

25

Employment-Based Categories (Immigrant Preference Categories)

EB-1: Priority workers EB-2: Advance-degree professionals & aliens of exceptional ability EB-3: Professional, skilled & unskilled workers EB-4: Special immigrants EB-5: Employment creation

26

Permanent Residency Flowchart EB-2/3

27

Employment Verification/Form I-9

• Applicable to all US employers and employees hired after

11/6/1986

• Employee completes Section 1 on or before hire
• Employer must verify (inspect/record) documents w/in 3 days of

hire

• May need to reverify work authorization (Section 3)
• Must retain 3 yrs after hire or 1 yr. after termination, whichever

longer

• E-Verify
• Online verification of employment eligibility
• Now used by 500,000 + employers
• Pilot program with funding through 9/30/2015
• Mandatory in some states and for federal contractors

28

DHS Continues Auditing Employers

500 1000 1500 2000 2500 3000 3500 FY 09 FY 09 FY 10 FY 2011 FY 2012 I-9 Inspections

29

Concluding Employment

• Termination Considerations
• Contractual Obligations
• Reinstatement of Suspended or Hibernating Contract
• Governing Laws
• Localizing
• Employment Issues
• Visa Process

30

Worldwide Locations