Global Immigration Law: An Update On Compliance For Employment Counsel

Editor: How has passage of Sarbanes-Oxley increased the need for corporations to ensure that they comply with immigration laws in the U.S. and abroad?

Fragomen: Sarbanes-Oxley has caused the corporate legal departments of companies to become much more involved in overseeing the immigration function and trying to make sure that all the different areas are being administered in a manner in which there is 100 percent compliance. That includes making sure that people who come into the U.S. as visitors for business are not providing productive services in the U.S. but are bona fide visitors; and, that all government filings are stated accurately and properly documented. A well run compliance program minimizes the risk to the company and uses outside counsel as necessary to help effectuate these programs.

Adams: Further, the Act specifically requires notification to the board of directors of any material liabilities within the organization and a violation of immigration law, with the potential for large financial or criminal liabilities, may rise to that level of materiality. Companies, therefore, are under increased pressure to comply with various immigration regulations affecting the employment of foreign workers.

Robosson: Sarbanes-Oxley has not affected the ability of corporations to deploy people around the world, but it does stress the importance of adequate internal controls, audits, and assurances that documentation being presented to the government is accurate. It has focused corporations on immigration as an area that has to be examined and vetted to avoid any liability.

Kaplan: When dealing with the employment of foreign nationals to different countries, companies should be aware of competing interests. For example, what may be best from an immigration perspective may not always meet the business need nor be the most effective tax solution, yet in order to remain compliant immigration laws must be obeyed. An example of a potential conflict may involve a minimum wage perspective. For instance, if an employee is being transferred from India to Australia where the minimum wage requirement is greater, that individual will not receive a visa to work if his salary does not meet Australian minimum wage requirements. A corporate policy addressing these concerns would remove that potential problem.

Editor: Does the new U.S. electronic system being implemented to identify a U.S. worker's immigration status benefit a U.S. employer?

Adams: The Basic Pilot Program (Part of IMAGE) allows employers to look online whether an individual is work-authorized in the U.S. The current system is designed to handle 7,000 employers. Some states are now requiring companies receiving state contracts to enroll in that program if they want to continue receiving contract benefits. This will raise the number of employers using the system to approximately 1 million. Because of the risks of greater computer downtime, system overloads and a lack of "safe harbor" processes, employers may be reluctant to use the program.

Fragomen: It will be interesting to see what will happen if Congress enacts legislation that has mandatory employment verification through their database. Companies in general have support efforts by the government to assure that their workforce is legally permitted to work because employers have an interest in hiring people who are legally present in the US. If the government can issue cards to them and facilitate the process so that the mandatory verification process can be seamless, companies will not have any objection to that.

As Jonathan said, the logistics of trying to ramp up the software to accommodate the large number of matters they would have to process is a gargantuan task. The current program is not capable of being ramped up to that level. A lot of work needs to be done on the IT front, and they need to issue cards to anyone legally authorized to work.

Editor: What are the obligations of an employer when there is a change in a business' structure such as a merger?

Adams: There are a significant number of immigration issues which must be considered. As in any other area of law, the corporation must conduct due diligence with regard to matters affected by U.S. immigration laws and to protect itself from unintended liability. These matters can simplistically be divided into two areas: actual, potential liabilities which would result from compliance failures pertaining to certain immigration documents (i.e. I-9 records, H-1B public access files, and PERM/labor certification audit files); and, appreciating that human capital, which may involve the transfer of employees, may incur certain pitfalls which would greatly impact the inevitable outcome of the transaction. It is prudent to weigh the financial costs associated with seeing the immigration matters to fruition, and, whether the transferred employees may continue to be employed following the merger.

Kaplan: The obligations generally vary and the factors to be considered as to how this will affect the visa for a particular candidate in a country will depend on the corporate structure remaining after the restructuring. In Australia, for instance, the designated company number will play a large role in determining whether there has been a corporate change, the nature of which would require the re-application of existing work visas for foreign nationals employed in the entity being acquired.

Immigration regulations of other countries generally focus on which entity originally had responsibility for sponsoring a person into that country. After a merger or acquisition, that entity, be it new or existing, maintains responsibility for those previously sponsored employees.

Editor: What types of penalties does a company face if it does not comply with the immigration requirements in a foreign country and how can corporations be more proactive in implementing a compliant immigration program?

Kaplan: The types of penalties and sanctions vary depending on the country you are in. For example, if a worker overstays a visa in China, he will be detained at the airport and have to pay a fine before he will be permitted to depart from China. This is different from other countries where the penalties are imposed on the company rather than the employee. In other countries there are consequences to both the employee as well as the company.

In the international environment, multinational companies are conscious of the need to be seen as "Good Corporate Citizens." This is an important concept. Compliance with visa regulations form part of this perception because the result of noncompliance abroad could be a restriction on the ability of the corporation to sponsor workers for a visa in the future since its credibility has been tarnished.

Robosson: At Fragomen, we have extensive resources on the rules of countries throughout the world. Our offices in China, Hong Kong, Australia, Singapore, the United Kingdom and other locations work with organizations to help them identify the individuals best suited for a particular location based on the regulations of that particular country. It is this extensive breadth of experience that is the hallmark of our immigration practice.

Editor: In terms of the employment of global talent, which countries have the most progressive immigration policies?

Kaplan: In Singapore, Australia, the U.K. and Canada, there are very effective temporary resident immigration programs which facilitate the movement of people into their countries in an expedited way. In addition, they have formulated permanent residence programs which encourage the influx of skilled workers. Many immigration programs allow for distinct advantages to younger workers from specific countries; these types of policies had traditioinally been avoided by the U.S. since they target specific age groups and skill sets. These countries, however, have tied immigration benefits to workers that fill a skills need. The U.S. is now feeling the brunt of this realization given our current program.

Editor: How can we bring the immigration policies of the nations of the world more into line with the realities of a global world where people and products are constantly on the move?

Fragomen: I have been very involved in this area through a UN initiative designed to take the leadership in global immigration reform organized by the Council of International Organizations for Migration (IOM). The Council is comprised of 118 member states working together to promote the humane and orderly migration of people around the world. The Council was started by the UN in order to address the growing concerns about global migration and how it impacts development.

The theme of discussions in which I participated was the interplay between global migration and development around the world using migration as a development tool. IOM's sessions included a three-speaker panel from the private sector in which I represented the business community.

I offered a position paper to the UN in which I proposed that the IOM serve as the focal group for immigration debates and that it include a special section dealing with business migration issues. Ideally, the IOM would have a repository of information, studies, research, and offer consulting services to countries around the world who are trying to refine their business migration programs. This body would be the principal catalyst for coordinating labor and migration policy worldwide in disseminating best practices.

Kaplan: Austin's work through the IOM is an important step for making countries aware of the need for legislation that allows the faster movement of people as well as greater screening, which could be done through pre-screening at a company level. If it were possible to have companies which sponsor employees prescreened as "employers of choice," this would go a long way to speed the adjudication process and allow for expedited entry of skilled workers. This is because the application would focus on the applicant for the position, rather than on the repetitive review of a pre-qualified company.

Published November 1, 2006.