Here is a T-I-P when it comes to managing compliance within your global mobility programs: Start by making sure that you are addressing tax, immigration and personal data effectively! These "big three" are discussed within this article and are core elements that sit at the foundation of all talent mobility programs that are actively moving talent across borders.
Of course, it sounds easier than it is. Even world-class mobility programs will have the occasional W-2C or late tax payment penalty. And without a doubt, all three of these program areas have gotten more complex, not less, even as volume increases have occurred over the last few years. The changes in tax laws, immigration adjustments and data initiatives (like GDPR) have all added to create one of the most complex compliancy environments ever in this industry.
Probably well understood, but the tax side can get extremely complex and this is why the most outsourced service utilized by global mobility programs is expatriate tax support! There are so many unique variables at play when it comes to grappling with, reducing or eliminating tax risks: payroll obligations for home and host countries, shadow payrolls, global compensation reporting, tax filings, proper withholding, totalization agreements, certificates of coverage, trailing tax liabilities or credits, residency, permanent establishment risks, FBAR, etc. Tax costs are often the top one or two biggest line items for a global mobility program, so adding penalties and fees on top of that won't help build your case for having the most effective program management.
Adding to today's compliancy drama, the immigration environment today has become a scene of shifting sands as legal and political landscapes continue to change. This has put compliance top of mind for every business that hires foreign nationals and uses cross-border employee transfers to support critical business missions. Much like tax, there is not much that is globally consistent. Every jurisdiction is a unique environment with specific work and employment requirements and options that need to be explored, usually on a case by case basis. Per Envoy and their Compliance Best Practices for Talent Mobility & Global Immigration Programs,
"Most companies charged with violations never intended to violate the rules; rather professionals responsible for the administration of immigration sponsorship did not fully understand or appreciate the laws and regulations."
Then on the data side, more than ever technology has created a whole new environment where our personal data can and does reside. With GDPR coming into effect May 25, 2018, companies throughout the industry needed to address its level of depth and breadth. Additionally, the GDPR comes with significant penalties for non-compliance - fines up to 20,000,000 EUR or 4% of total worldwide annual turnover of the preceding year (whichever is higher), and fines can be imposed for breaching the data protection principles but also for failing to have the correct administrative procedures in place - i.e. failing to report a breach, which can attract an additional fine of up to €10 million or 2 per cent global turnover, whichever is greater.
Plus's CIO Andy Kubitschek advises that, "The need for mobility teams to understand GDPR and how it impacts the data they share and expectations they impose on their RMCs is critical. Global mobility teams, relocation management companies and all the downstream supply chain, must understand their obligations, responsibilities and requirements, and then build out a process that is GDPR compliant."
In AIRINC's 2019 Mobility Outlook Survey, 75% of companies said that compliance risks are minimized or non-existent. So, if you are currently managing an "issue-free," completely compliant program, then you (and your team and your partners) deserve a medal! If you are not, assess your program and begin to evaluate the areas of greatest risk and design a plan with your team and program partners to close those gaps.
Compliance has become a big thing, whether we like it or not. Although the world appears to be getting smaller and more interconnected, relocations are becoming more and more difficult, with increased regulatory and compliance matters forming a significant part of the process. Countries band together, and “improvements” are made to cross-border regulations and passenger tracking, but the changes rarely better the working lives of global mobility professionals.