Whether employees travel across state lines or international borders, when your organization supports a business traveler program, the responsibility for risk management extends beyond the executive and financial suites. Human resources specialists also play crucial roles in helping recognize and reduce exposure to potential liabilities. After all, you’re in the best position to anticipate and react when employees encounter the unexpected while traveling.
What Are the Risks?
The risks your company faces when an employee travels on business depend on the employee’s location. Any domestic or treaty-based compliance thresholds your program should address are triggered by border crossings. But to plan for those risks, you’ll need to identify them. What follows are some of the most common sources of risk your organization’s mobility program may face.
#1: Corporate requirements
Once you have employees planning to conduct business in another state or country, you’ll need to know what constitutes a corporate presence in that locality and what business activity your employee is undertaking. Reviewing activity, presence and if you have a place of business in the other state or country helps to determine if your organization has a permanent establishment risk for the location. Having a permanent establishment often results in additional responsibilities. For instance, you may need to track and report all payroll and Social Security taxes associated with each employee for as long as they are in a specific jurisdiction. That requires setting up or expanding your reporting system to include local compliance rules to reduce the risk of fines. Similarly, legal registrations may also be necessary. Transacting business without them could lead to penalties or potential charges of unlawful actions on the part of your employees.
#2: Employment law
Because employment laws differ, your employment contracts may need to be versioned for use in specific locations. Workers’ compensation is another area that may be treated differently, particularly in different US states. Where international business travelers are concerned, the laws governing the amount of time an employee may work in the Host country and what activities are acceptable can vary widely. So can the consequences if your organization or employees unknowingly violate the laws.
#3: Immigration rules
Immigration rules also vary widely from country to country. The length of each stay and activity the employee is undertaking, for instance, may influence the paperwork required for business travelers to conduct business legally on your behalf. Planning and verifying the necessary work/permit requirements for each country an employee will travel through helps mitigate the risks of violating these highly sensitive laws.
#4: Emergency situations
Things happen, from natural disasters to political unrest to medical issues. When these unforeseen and unlikely events happen to your business travelers and their families, your company has a duty of care. This is a fiduciary duty to do what is right and reasonable to protect your employees while they are traveling on company business. To satisfy this responsibility, it helps to maintain a playbook with resources you can access to help support or even evacuate your business travelers when they are in harm’s way.
#5: Reputational risk
Should something go wrong, the reports will link your organization’s name to your employee’s name in the media—and potentially in a court of law. This is true even if it was a personal matter not directly related to conducting business on your behalf, such as a weekend traffic accident. Because it takes time to resolve incidents that can harm your reputation, having a legal process and public relations resources in place is advisable. The faster you respond, the better your chances of containing any lasting effects.
The Role of the Human Resources Specialist
During the course of establishing and managing your company’s business traveler program, you’re in the best position to also set up and implement a risk management strategy. At a minimum, this strategy should include determining whom within your organization to alert about potential risks. Working proactively with other divisions to create policies and processes that trigger your protocol for managing the risks can go a long way toward minimizing them. Similarly, it should be standard practice to communicate and educate each business traveler about their responsibility to maintain compliance and to know how to request support when situations arise.
Whether creating policies for internal financial control so your firm understands its exposure or establishing the right processes for sharing travelers’ information with foreign entities, you don’t have to go it alone. Consider working with a mobility tax specialist. They’ll help you understand the specific nature of risks your firm’s business traveler program might face, review the current state of your program, and evaluate and quantify the potential tax and compliance costs you face. Working together, they can help ensure your firm proactively plans and complies with regulatory requirements wherever your business opportunities take your mobile employees.