The World of International Mobility: Business Immigration Management From Risk to Opportunity

CERC Annual ConferenceSeptember 21 – 23, 2014

Whistler, B.C.

Julie Lessard, Lawyer, PartnerBCF Business Law

1100 René-Levesque Blvd., 25 FloorMontréal (QC) H3B 5C9 Canada

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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 it should 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.

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Table of Contents

I. BUSINESS PRACTICES ON THE GROUNDII. WHY IS IMMIGRATION COMPLICATED (MORE

THAN EVER)?III. RISKS INHERENT TO BUSINESS IMMIGRATIONIV. BEST PRACTICES FOR RISK MITIGATIONV. Q&A AND CONTACT INFORMATION

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I. BUSINESS PRACTICES ON THE GROUND

« We know the rules, but what’s happening in the trenches? »

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I. Business Practices on the Ground

1. The Decentralized Model2. Modern Approaches to Global Mobility

Management:2.a. The Centralized (“In House”) Approach2.b. The Global Project Manager Approach

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1. The Decentralized Model

• Philosophy: Immigration as pure « compliance exercise » or « paperwork »

• Goal: quickly moving an employee from one country to another

• Approach: « Ad hoc » relationships with local legal providers• Measure of success: Time for Employee X to get to country Y

with the required authorizations

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1. The Decentralized Model (cont.)Substantial Challenges in Risk Management:

Gathering and tracking key data (expiry dates, audits)Assessing and managing risks in immigration process

(tax, audit complianceConsistency of representations before the government Cost ControlAssuring host-country legal compliance for the companyMaintaining a consistent level of quality vis-à-vis the

business and the expatriateNarrow view of immigration, disconnect from tax and

other compliance aspects

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2. Modern Global Mobility Management Built for Success

• Philosophy: Global Mobility Management (GMM) requires coherent, multi-dimensional policies and programs to be successful

• The goal: Mitigation of risks and Elimination of non-compliance

• Approach: Carefully planned Centralized Control or outsourced GMM Project Manager

• Measure of success: An optimum GMM organizational structure to maximize the opportunities and to minimize and control risks

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2.a. The Centralized (“In House”) Approach

• Elaborate arrangements for the centralized control of the migration process from the Corporate HQ or within major world regions

• Limited number of companies build up capacity and expertise to devote resources for in-house preparation of immigration applications in multiple foreign jurisdictions

• Management of outsourced relationships with multiple providers in each jurisdiction would still be required

• Concern with regards to unauthorized practice of law

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2.b. The “Global Project Manager”• Global Manager as a « blended » approach

• Bulk of responsibility for the GMM is fully outsourced to the « Global Service Provider », typically a group of firms selected in a competitive bid:

A. RelocationB. TaxC. Immigration

• « Global Immigration Provider » - performs most immigration work in main jurisdictions- negotiates contracts & SLAs with destination providers; - maintains an integrated immigration management database.

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II. WHY IS IMMIGRATION COMPLICATED (MORE THAN EVER)?

Understanding the New Immigration Landscape

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II. Why is Immigration Complicated (More than Ever)?

1. Immigration Law Complexity & Frequent Changes

2. Trends towards Restrictive Interpretations of Law

3. Increased Government Surveillance

4. Complexity of Global Business Models

5. Peripheral issues (anti-corruption, public relations, union relations, controlled technology and exports)

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1. Immigration Law Complexity

• The United States example: Complexity of the Immigration & Nationality Act (INA) « equals only to the IRS Tax Code » (Congressional Research Report on Immigration) 

• The Canadian example: changes made through either law, operational bulletins, interpretation. In Canada, major reforms one after the other since 2011.

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2. Trends towards Restrictive Interpretations of Immigration Law

L-1B Denials Request for Evidence (RFE)0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

50%

Applications 2003Applications 2013

L-1B Adjudications Trends 2003-2013, National Foundation for American Policy, 2013

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2. Trends towards Restrictive Interpretations of Immigration Law

• L-1B Specialized Knowledge – Intracompany Transferee Program widely used by multinationals

• No changes to the U.S. regulations governing L-1B applications in 2003 – 2013; HOWEVER, refusal and Request for Evidence Rates in L-1B applications skyrocketed during this period

• Canada followed suit in 2013 in introducing stricter interpretation of « Specialized Knowledge » definitions for Intracompany Transferees

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3. Increased Government Surveillance

• « Smart Borders »: Post 9/11, governments worldwide have invested billions in sophisticated technology to make borders safer

• Governments create and maintain accurate, current, traceable information on the movement of foreign nationals within their borders

• Search of personal electronic devices at the border• Increased savvy of border agents who use public domain

information (Google, LinkedIn, Facebook) to screen travelers

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3. Increased Government Surveillance

• « Canada has become increasingly enforcement-oriented », Immigration Practitioner in Toronto, Ontario .  

• « ...Further Developments have shown the UKBA’s re-focus on non-compliance since the beginning of 2013, with the UKBA creating a hostile operational environment for individuals and organizations who do not play by the rules », London, UK-based immigration attorney

• “I-9 enforcement is at an all-time high... It’s now a question of when, not if, an organization will be audited,”, Immigration practitioner in Portland, Oregon, USA

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4. Complexity of Global Business• Project Work in the Global Economy

– Firms often bid, secure and sometimes attempt to fulfill contracts without any review of immigration aspects of the projects prior to bidding

– Chains of subcontractors with unclear responsibility for securing immigration documents

• Mobile Employees of Various Profiles– Frequent Travelers– Temporary Assignees– Permanent Transferees

• Complex Corporate Structures - Joint Ventures - Corporate Changes (M&A, divestments)

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5. Public Relations, Political and Peripheral Aspects

• PR & Immigration: Increased Media attention during economic downturn & related pressures from unions (RBC, Hydro Quebec, McDonald’s Canada)

• Intersection between Immigration and Anti-Corruption (American Foreign Corrupt Practices Act, the UK Bribery Act making reference to « facilitation payments » to government officials to promote the discretion of immigration outcome illegal. * Application to extra-territorial activities of companies present in either jurisdiction.

• Bill 1 or The Integrity in Public Contracts Act (the "Integrity Act") in Québec

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5. Public Relations, Political and Peripheral Aspects

• U.S. Export Control Laws (EAR/ITAR): – “Export license” is required to export controlled technology from

the United States;– When an “alien worker” is merely exposed to controlled

technology even inside the United States, « deemed export » of controlled technology occurs, exposing company to penalties if no export license or required clearances obtained;

– Examples of « controlled technology »: encryption software and many others;

– Amendment to USCIS forms for I-129 Petitions to include specific questions to measure a company’s EAR/ITAR compliance.

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III. RISKS INHERENT TO BUSINESS IMMIGRATION

While risks are many, we highlight a few very important ones

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III. Risks Inherent to Business Immigration

1. Civil and Criminal Liability2. Administrative Record Keeping3. Risks assumed through Corporate

Restructuring4. Global Project Delivery Models and Business

Visitors5. Employer-Employee Litigation & Illegal

Practice of Law

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1. Civil and Criminal Liability

In Canada, stronger enforcement and tougher penalties under the changes to the Temporary Foreign Worker Program:

•Massively increasing the number and scope of inspections so that one in four businesses employing temporary foreign workers will be inspected by the TFWP each year.

• Increasing the number of program requirements that inspectors can review from 3 to 21.

• Improving and expanding the TFWP Tip Line and creating a new "Complaints" website.

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1. Civil and Criminal Liability

In Canada, stronger enforcement and tougher penalties under the changes to the Temporary Foreign Worker Program:

• Expanding the ability to publicly blacklist employers who have been suspended and are under investigation, as well as those who have had an LMIA revoked and are banned from using the program.

• Additional funding for the Canada Border Services Agency to allow for an increase in the number of criminal investigations.

• Improving information sharing among departments and agencies involved in the oversight of the TFWP, including provincial and territorial governments.

• Introducing significant monetary fines of up to $100,000 following adoption of new legislative authorities included in the Budget Implementation Act (Bill C-31).

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1. Civil and Criminal Liability

In other jurisdictions:

• US$16,000 employer fine for continuing to knowingly employ or recruit an individual not authorized to work in the United States (USA)

• €5,000 and 3 years jail sentence for employing a worker without a work permit (Italy)

• $500 - $25,000 equivalent penalties in the UK, China, Russia, Philippines

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2. Administrative Record-Keeping

Post-approval issues may include:

• I-9, H-1B & Labor Certification Application (LCA) issues in the U.S.

• Audit and recordkeeping in Labour Market Opinions (LMO) application in Canada

• Fines can be high (multiplied by # of non-compliant records or violation counts)

• Expulsion from Temporary Foreign Worker Program as the worst penalty

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3. Risks Assumed through Corporate Restructuring

• Mergers and Acquisitions:

A. Likelihood of « purchasing » some non-compliance along with all of the others assets and liabilities

B. Possibility of losing work authorization temporarily or permanently for part of the workforce (Intracompany transferees in some scenarios depending on the structure of the deal, U.S. Treaty Investor / Treaty Trader visas tied to the concept of « Company Nationality »)

C. The M&A itself creates risks through changed reporting procedures, job duties, salaries, corporate entities, etc.

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4. Global Project Delivery Models & Business Visitors

• Information gathered by authorities on entry can (and often is) being shared with immigration and tax authorities

• Countries are redefining permanent establishments, « coupling » tax and immigration issues for employers and individuals, searching for travel patterns with the goal of imposing immigration rules and Permanent Establishment (PE) taxation rules

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4. Global Project Delivery Models & Business Visitors

• Little awareness of tax and immigration issues when persons operate outside of defined company mobility programs

• Even when there is awareness, difficulty remains tracking mobile employees: 45% of respondents in 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 ».

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5. Risks Related to Employee-Employer Litigation and Illegal Practice of Law

• In-house « Immigration Specialists » helping employees: where is the line not to be crossed?

• Whistleblower or disgruntled employee? The resulting math may be the same... US$35 Million for Illegal Use of Visas in Infosys Inc. investigation triggered by Infosys vs. Palmer

• Dropping the Green Card Process: It may be expensive for you. DerKevorkian v. Lionbridge Techs, Inc. 

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IV. BEST PRACTICES FOR RISK MITIGATION

Thriving on global mobility 

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IV. Best Practices for Risk Mitigation

1. Identifying Principal Risks2. Assessing Existing Practices3. Choosing and Maintaining the Right GMM

Model

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1. Identifying Principal Risks

• Failure to adapt to the forces driving business immigration process is counterproductive and risky for your business

• Understanding and identifying the risks is half of the battle won

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2. Assessing Existing Practices

• Strategic Vision: How do you define your needs? Immediate Project Needs vs Long-Term talent development strategies?

• Line of Command: Who is responsible for daily GMM operations. Are roles well-defined? Who takes final responsibility for risk?

• Tools and Practices: How do you track movement of your workforce? Which software do you use? How is data reported and synced with other areas of compliance (tax, security)?

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3. Choosing and Maintaining the Right GMM Model

Launch your GMM Model:• Mapping your global needs• Conducting cost-benefit analysis • Consulting industry experts and « success stories »• Implementing clear and transparent plan and getting the

management to « buy-in » early in the process

Operational Stage: • Stay on top of the game: Frequently refreshing and re-

educating players, reviewing policy documents• See the target: mitigating risk and eliminating non-

compliance, not eliminating any risk as this is an impossible task in business or immigration

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Contact

Julie Lessard, Partner, LawyerBCF Business Law1100 René-Levesque Blvd. W., 25th Fl.Montréal (QC) H3B 5C9 Canada Julie.Lessard@bcf.ca

www.bcf.ca

http://www.linkedin.com/in/businessimmigrationlessardj