Who’s driving your workforce mobility?
Increasing mobility risks in a protectionist world
Overlaying all of these before-mentioned factors however, is that firms need to keep in mind that political uncertainty and increasing protectionism adds a degree of difficulty to the execution of a good mobility strategy. Issues to consider include:
- Visa and immigration risk With the visa volatility of the Trump administration, employees sent out of the US on firm business run the risk that they may not be able to return to their families if the rules change suddenly. Law firms also need to be more aware of which countries employees have worked or lived in in previously. More broadly, many countries are making employment for their own citizens a much clearer priority, and this can make obtaining work permits more difficult and time consuming than it ever has been before.
A closer to home example of this can be seen in the recently announced changes to the 457 visa program in Australia. In a clear effort to protect and promote the Australian workforce in excess of 200 occupations were removed entirely from the work visa eligibility list. At the same time a significant number of other overseas employees, including many senior management, marketing and finance professionals, will now only be eligible for a 2 year work visa (“Short Term Skilled Occupation List or STSOL”) with a maximum of one renewal opportunity and no clear pathway to Australian permanent residency. While legal occupations have remained on the 4 year visa category list (“Medium and Long Term Strategic Skill List or MLTSSL”) this is a clear example of how quickly and dramatically the immigration landscape can change.
In many countries, the definitions of what is ‘business’ (e.g. attending a conference using a business visa) versus what is ‘work' (e.g. attending a client workshop that generates fees) is difficult to understand and is becoming increasingly blurred. Law firms need to carefully manage the risk of their people being caught on the wrong visa, especially with the increased aggression of many governments towards visa holders.
- Tax risk Data sharing between tax and immigration authorities mean that even inbound deployments of just a few weeks are now much more likely to attract scrutiny from tax authorities. From both a compliance and a cash flow perspective, firms need up-front planning to understand where tax obligations may be triggered, and must be able to track their short-term business travellers to avoid any unpleasant surprises. Potential issues here range from employees triggering personal tax liabilities to employers triggering withholding and reporting obligations. They could also include corporate tax exposure, arising from mobile employees inadvertently exposing companies to corporate tax in new locations.
Visa and taxation mistakes can quickly damage brand and reputation, erode profits on jobs with unexpected costs, as well as alienate employees. Taken to the extremes, breaches of domestic law in these areas can lead to prosecutions, fines and – in many jurisdictions – imprisonment.