Nicholas Robertson and Elizabeth Espín Stern: Global mobility – top 10 issues

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Global MobilityThe global mobility agenda is now a priority for many employers. With the ongoing globalisation of business, and continued focus on new and emerging markets, there has been a rapid rise in mobile employees over recent years. Amongst the research in this area is PwC’s prediction of a 50 percent growth in mobile employees by 2020 – a statistic that is hard to ignore. The benefits of global mobility are clear: businesses that can respond swiftly to an evolving global market remain agile, competitive and one step ahead. Having people on the ground is crucial and puts international assignments at the very heart of the global mobility agenda. However, global mobility is not without its challenges. There are a number of legal and practical points to address when handling global mobility issues and international assignments. Here are our top 10 issues to consider:

1. Structuring assignments

Planning is essential throughout the global mobility process. International assignments may be required on short notice, perhaps in response to winning a lucrative project, or there may be a longer lead-in period, providing more preparation time. Either way, it is vital that employers plan ahead.

Establishing the most appropriate structure for international assignments, and identifying the correct ’employer’, are critical and will help protect employers if assignments are not successful. There are various structures to choose from. The approach could be home-based, host-based or a combination of the two. For example, employees could be employed and paid by the home company; employed by the home company and paid by the host entity or they could have a dual employment contract. The preferred structure will depend on various issues, including the employer’s own corporate structure, its presence in the relevant jurisdiction, duration of the assignment and immigration requirements.

Taxation and employment liabilities will also have an impact on contractual arrangements, given the potential implications for both employer and employee. Many companies opt for secondment agreements which provide for employment with the home company but day-to-day supervision and remuneration by the host entity. Other companies move employees to a Global Employment Company (set up to administer payroll and benefits for international assignments) before seconding them to the host country for assignments. In all cases, employers should consider the impact that the structure may have on employees’ connection to the home and host countries and entitlement to home and host country rights.

Once the appropriate structure is established, the key terms to consider include duration, payment arrangements, currency conversion, additional benefits (see below) and arrangements governing the end of the assignment.

2. The package

Aside from the structure of the assignment, employers need to consider the benefits package, which is often central to negotiations. Typical packages include tax equalisation, relocation and housing assistance/costs, alongside host-country benefits (depending on the nature and duration of the assignment). Assessing the tax implications of the salary arrangements and benefits package will be a priority for both employer and employee.

3. Law and jurisdiction

Neither the structure of the assignment nor the package should be considered in isolation and based solely on the requirements of the home country. Employers should also consider local law and, in particular, what rights employees may acquire during the period of the assignment and on termination. These issues should be explored at the outset and, where possible and appropriate, reflected in the contractual terms. A more detailed examination of law and jurisdiction matters is outside the scope of this article but when dealing with international assignments, issues to consider include the governing law of the contract, mandatory rules (e.g. rules of a country that apply automatically irrespective of the choice of law, such as notice rights and protection from discrimination), and whether courts/tribunals have jurisdiction to accept a claim. These are complex issues but will arise with most international assignments.

4. Immigration planning

Sending staff overseas without the proper work and residence authorisations is just one of the many pitfalls that can disrupt a global mobility process. Immigration issues can also arise at other stages. If, for example, employers are bidding for overseas projects and need to staff them quickly and efficiently, they will need to factor in time for obtaining the necessary visas and permits. This requires advance planning and knowledge of the relevant processing timeframes. As global businesses evolve, transactions such as mergers and acquisitions, which change a company’s structure, may also affect the visa status of international assignees. This is often overlooked but any such change will require a thorough analysis of the immigration requirements.

 5. Family

The impact of international assignments on family should not be underestimated. Getting buy-in from family members and ensuring they are comfortable with the move is often central to the success of international assignments. If assignments are reasonably short, employers may provide flight assistance for visiting family members. If employees relocate with their family for a longer period, many employers will offer assistance with relocation and schooling costs. Employers may also need to consider obtaining work authorisations for accompanying spouses. Not all countries provide these automatically so this should be addressed with employees at an early stage.

6. Preparing employees

It is important that employers prepare employees for international assignments. Depending on the country, there may be particular cultural issues, customs or restrictions which may impact on both the working and personal lives of employees and their families. Addressing such issues when the assignment is being planned will help manage expectations, contribute to the success of the assignment and minimise the likelihood of issues arising from a new and unfamiliar jurisdiction.

7. Day-to-day management

Often the biggest hurdles in global mobility relate to implementing the correct contractual arrangements, assessing local law and meeting immigration requirements. However, employers should also think beyond these issues and consider how assignments will operate in practice. Day-to-day management of employees should be a priority. While this may be handled by the host entity, it is advisable for the home company to remain involved and be consulted. This should be reflected in the documentation so expectations and communication levels are managed from the beginning. It is also important for home employers to maintain contact with international assignees, to provide ongoing support and help ensure they settle into their new location. Depending on the arrangements between the home and host companies, maintaining communications is also vital to address performance and appraisal processes, as well as any future employee issues, such as grievances and disciplinary matters. From a corporate and management perspective, maintaining contact also provides employers with an insight into issues on the ground. As noted above, international assignees should not be forgotten if the employer’s corporate structure changes. In these circumstances, employers may need to address a range of employment, immigration and tax issues associated with the change.

8. Policies and compliance

Many business wish to implement global employment policies for consistency, particularly where they have a large mobile workforce. Although often desirable, this is unlikely to be possible across all jurisdictions due to local law variations. Certain policies may need to be amended or may be of limited value in particular jurisdictions. However, there may be some policies which employers will wish to communicate globally to maintain and enforce their own code of conduct and corporate standards. This may apply to policies relating to anti-bribery/anti-corruption, whistleblowing and data privacy, which are central to the global mobility process. Government authorities are also increasingly active in performing on-site audits of workplaces around the world, leading to formal investigations of visas, wage compliance and working conditions. Such issues are often challenging for employers, particularly where there is a high volume of global business travel across a wide range of jurisdictions. Employers should therefore prioritise employment and immigration compliance, and address data security and corruption risks, throughout the global mobility process.

9. High risk locations

If employees are required to work in potentially high risk locations, employers should undertake appropriate risk assessments first. Employers should ensure, so far as reasonably practicable, the health, safety and welfare of their employees and provide a reasonably safe place and system of work. Employers should take all reasonable steps to identify and assess foreseeable risks. This may involve carrying out risk assessments and looking at measures to safeguard overseas employees. Employers should communicate with employees both before and during assignments to assess the risks and need for support. It is also advisable for employers to have plans to deal with emergency situations.

10. Termination of assignment

Advance planning for termination is essential. The termination of an assignment, whether early or otherwise, should be considered at the outset and will entail an assessment of the impact of the relevant law and jurisdiction, as highlighted above, and any additional entitlements or claims on termination. Employers should also plan for the employee’s return to the home country and company. Depending on the circumstances and the changes to the business during the period of the assignment, this may involve considering redundancy procedures and/or alternative roles. It is also wise to retain and recycle the intelligence gained from international assignments. This stage is often overlooked but, with a global workforce, this will help inform and refine the global mobility process.

The future

The mobile workforce is not only here to stay – it is also developing at a rapid rate. It is likely to generate an even higher pace and volume of travel, as well as breadth of coverage with an increase in travel to new markets. It will require a versatile mix of mobile assignments ranging from short trips to extended placements. This reflects the increasing need for an effective global mobility programme which balances the requirement for an agile, fluid service with focused risk management. A central management team, with access to comprehensive resources, is vital and will contribute significantly to an effective and successful global mobility programme.

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