Legal and compliance considerations in global mobility
Global mobility means that your business is not tied to its geographical location. In the age of remote work, achieving global mobility is easier than ever. While your employees travel around the globe, they still remain connected and available. At the same time, while there are more and more global organizations and regulations, local laws still reign supreme.
With that in mind, and without further ado, here are the top legal and compliance considerations in global mobility that you must consider when structuring your enterprise.
1. Immigration laws and work permits
When it comes to running a business on the principle of global mobility, you need to understand that just because you hired someone from a different country, this doesn’t mean that proof of employment will allow them to just waltz into the country. It will help them obtain a work permit, but they still have to go through immigration.
This requires a proper procedure, and if you intend to hire and bring people in continuously, you’ll definitely need to know the procedure and follow a structure.
You also need the right immigration lawyer on your side. Ideally, you’ll have a team that will advise you on the right types of visas and remind you to renew them on time. Once this is established, things will run pretty smoothly.
Getting one visa and providing them with appropriate work authorization can make a difference in whether they can legally work while there. If not, this could completely defeat the purpose of their visit. An unauthorized employee will be more trouble than they’re worth, and this is something you want to avoid at all costs.
2. Employment law
When hiring a remote employee, you may ask them to sign a certain contract, potentially even an NDA. When they visit or travel to a different country, they’ll be under a different jurisdiction. Compliance with local labor laws is essential, and it could affect everything from working hours and holidays to termination procedures and employee benefits.
This is something that even veteran entrepreneurs struggle to understand, especially if they’re new to the modern, unrestricted globalization of the business world. Moreover, the differences between jurisdictions can be quite severe, which could change the dynamics and terms of employment in their entirety.
Ideally, you’ll think about this as early as the contract. This way, the contract will be crafted so that it protects the rights of both the employer and the employee. Also, a good contract contains no ambiguities (or as little as possible). These ambiguities are problematic, to begin with, but they’re even worse when it comes to overlapping jurisdictions.
3. Taxation
Now, we come to one of the most challenging issues: the question of taxation. You see, when determining one’s tax residence, you have to take into consideration both physical location and the nature of work being done.
Most countries have bilateral agreements with other countries that mandate these matters so that individuals and organizations can avoid being double-taxed. The most common rule in the guidelines is the 183-day rule, which implies that if a person spends more than 183 days in a specific country during twelve consecutive months, they might have to pay taxes in that country.
Still, handling this on your own and without previous research is unwise and ineffective.
For starters, it doesn’t have to be 183 days at all. This is the most common rule, but it’s not universal. Also, there are a lot of jurisdictions that don’t count the day of arrival and the day of departure as a full day (but half a day instead).
All of this is much easier to handle with the help of professionals, so global mobility services might be the simplest way to resolve this issue. This is especially the case for enterprises that already have to keep these matters systemic.
4. Data privacy
When working with international talent and international clients, you’ll collect so much data, both actively and passively. Well, since this takes place across borders and in different jurisdictions, you’ll have to work extra hard to stay compliant with data protection regulations.
Some of the biggest ones are GDPR in the EU and CCPA in California (and most of the US). The problem with this lies in the fact that it doesn’t matter if you’re not from these regions. As long as you work with people who are, you’ll find yourself in a position where you have to be compliant with these regulations. Now, if you’re an online international business, there’s no way at least some of your clients aren’t from these regions.
You don’t just have to protect the customer data but the employee data, as well.
Cross-border data transfer is a serious matter and must be taken seriously. It takes revision and even some professional help to enable you to stay within compliance.
5. Employee well-being
You need to take care of the health and well-being of your employees. If you’re hiring people from abroad, you want to ensure that they have equal access to benefits as your local employees. Maybe you’ll have to look into local insurance and benefits plans that are equivalent to those that your home-country employees are receiving.
Second, you need to adjust to their cultural norms and sensibilities. They have their own religious and national holidays and you need to schedule their days off accordingly.
Most importantly, not enough is said about remote employees’ mental health and work-life balance. They may be paid by performance, and since you’re paying them so much more than any employer in their home country would, they might feel like they can’t say no. Always avoid overworking them and put their mental well-being first.
Wrap up
The biggest challenge here lies in finding a balance between two separate jurisdictions. You need to ensure that your employees are well-compensated and that they have all the right permits to do their job. You need to cooperate with specialists, do extensive research on the topic of employment law, and make sure to always check twice before making any move. The last thing you need are fees and penalties when you have so many available mechanisms to avoid them all.
