Global Workforce and Mobility: Opportunities and Risks. ogletreedeakins.com Presented By: Bernhard Mueller (Columbia, SC)

Atlanta / Austin / Berlin / Birmingham / Boston / Charleston / Charlotte / Chicago / Cleveland / Columbia / Dallas / Denver / Detroit Metro Greenville / Houston / Indianapolis / Jackson / Kansas City / Las Vegas / London / Los Angeles / Memphis / Mexico City / Miami Minneapolis / Morristown / Nashville / New Orleans / New York City / Orange County / Philadelphia / Phoenix / Pittsburgh / Portland / Raleigh Richmond / San Antonio / San Diego / San Francisco / St. Louis / St. Thomas / Stamford / Tampa / Torrance / Tucson / Washington, D.C. Agenda Types of Assignments, Basic Terms – Business Considerations Legal issues implicated by these moves: 1.Business Considerations 2.Immigration Law 3.Employment Law 4.Contract Law 5.Benefits 6.Taxes (payroll and corporate) Ancillary Documents Ending the Assignment Questions

Atlanta / Austin / Berlin / Birmingham / Boston / Charleston / Charlotte / Chicago / Cleveland / Columbia / Dallas / Denver / Detroit Metro Greenville / Houston / Indianapolis / Jackson / Kansas City / Las Vegas / London / Los Angeles / Memphis / Mexico City / Miami Minneapolis / Morristown / Nashville / New Orleans / New York City / Orange County / Philadelphia / Phoenix / Pittsburgh / Portland / Raleigh Richmond / San Antonio / San Diego / San Francisco / St. Louis / St. Thomas / Stamford / Tampa / Torrance / Tucson / Washington, D.C. Legal Considerations Implicated by All Mobility Assignments Business Issues and Corporate Structures Immigration Employment Laws Contractual Matters Benefits Tax Consequences Business Contract Terms Tax Immigration Benefits Employment Law

Atlanta / Austin / Berlin / Birmingham / Boston / Charleston / Charlotte / Chicago / Cleveland / Columbia / Dallas / Denver / Detroit Metro Greenville / Houston / Indianapolis / Jackson / Kansas City / Las Vegas / London / Los Angeles / Memphis / Mexico City / Miami Minneapolis / Morristown / Nashville / New Orleans / New York City / Orange County / Philadelphia / Phoenix / Pittsburgh / Portland / Raleigh Richmond / San Antonio / San Diego / San Francisco / St. Louis / St. Thomas / Stamford / Tampa / Torrance / Tucson / Washington, D.C. Non-U.S. Employment Law Principles No at-will employment Leave and other myriad entitlements Procedural rights for discipline Notice and severance rights for termination Hiring quotas for certain minority categories

Atlanta / Austin / Berlin / Birmingham / Boston / Charleston / Charlotte / Chicago / Cleveland / Columbia / Dallas / Denver / Detroit Metro Greenville / Houston / Indianapolis / Jackson / Kansas City / Las Vegas / London / Los Angeles / Memphis / Mexico City / Miami Minneapolis / Morristown / Nashville / New Orleans / New York City / Orange County / Philadelphia / Phoenix / Pittsburgh / Portland / Raleigh Richmond / San Antonio / San Diego / San Francisco / St. Louis / St. Thomas / Stamford / Tampa / Torrance / Tucson / Washington, D.C. You kidding me? That can’t be right ! Netherlands Terminations require either (a) a permit or (b) “urgent cause” (employer must prove) and immediate notification to the employee Spain Employer must give written notice of the grounds for dismissal – and can’t rely on any after-acquired grounds China Employer is required to enter open- ended contract after 10 consecutive years of service or two consecutive fixed-term contracts

Atlanta / Austin / Berlin / Birmingham / Boston / Charleston / Charlotte / Chicago / Cleveland / Columbia / Dallas / Denver / Detroit Metro Greenville / Houston / Indianapolis / Jackson / Kansas City / Las Vegas / London / Los Angeles / Memphis / Mexico City / Miami Minneapolis / Morristown / Nashville / New Orleans / New York City / Orange County / Philadelphia / Phoenix / Pittsburgh / Portland / Raleigh Richmond / San Antonio / San Diego / San Francisco / St. Louis / St. Thomas / Stamford / Tampa / Torrance / Tucson / Washington, D.C. Business Considerations Types and Duration of Assignments Outbound Inbound Short Term Long Term Business Need for Assignments Executive leadership Training Taking on customer contract Exploring new market Events Business

Atlanta / Austin / Berlin / Birmingham / Boston / Charleston / Charlotte / Chicago / Cleveland / Columbia / Dallas / Denver / Detroit Metro Greenville / Houston / Indianapolis / Jackson / Kansas City / Las Vegas / London / Los Angeles / Memphis / Mexico City / Miami Minneapolis / Morristown / Nashville / New Orleans / New York City / Orange County / Philadelphia / Phoenix / Pittsburgh / Portland / Raleigh Richmond / San Antonio / San Diego / San Francisco / St. Louis / St. Thomas / Stamford / Tampa / Torrance / Tucson / Washington, D.C. Options for a Workforce Abroad US employee  Second US employee to host-country entity localized employee  Hire localized employee to host-country entity independent contractor  Engage independent contractor staffing agency  Use host-country staffing agency

Atlanta / Austin / Berlin / Birmingham / Boston / Charleston / Charlotte / Chicago / Cleveland / Columbia / Dallas / Denver / Detroit Metro Greenville / Houston / Indianapolis / Jackson / Kansas City / Las Vegas / London / Los Angeles / Memphis / Mexico City / Miami Minneapolis / Morristown / Nashville / New Orleans / New York City / Orange County / Philadelphia / Phoenix / Pittsburgh / Portland / Raleigh Richmond / San Antonio / San Diego / San Francisco / St. Louis / St. Thomas / Stamford / Tampa / Torrance / Tucson / Washington, D.C. Secondment: What is it? U.S. company and a host-country entity enter into an agreement where a U.S. employee will temporarily become an employee of the host-country entity. Host-country entity is usually, but not always, a corporate affiliate. Host-country entity is responsible for compliance with local laws. U.S. entity often reimburses host country’s expenses in connection with employing the individual.

Secondment: Pros and Cons Pros If entity already exists, no costs of setup U.S. employment law is more likely to stick to relationship More likely to maintain at-will status Cons If no local entity (e.g. distributor, reseller, commercial agent) exists, cost of setting up entity Risk of permanent establishment for U.S. entity

Atlanta / Austin / Berlin / Birmingham / Boston / Charleston / Charlotte / Chicago / Cleveland / Columbia / Dallas / Denver / Detroit Metro Greenville / Houston / Indianapolis / Jackson / Kansas City / Las Vegas / London / Los Angeles / Memphis / Mexico City / Miami Minneapolis / Morristown / Nashville / New Orleans / New York City / Orange County / Philadelphia / Phoenix / Pittsburgh / Portland / Raleigh Richmond / San Antonio / San Diego / San Francisco / St. Louis / St. Thomas / Stamford / Tampa / Torrance / Tucson / Washington, D.C. Secondment: Documents Needed Secondment Agreement between U.S. entity and host country entity Spell out which entity is responsible for what Transfer pricing arrangements Underlying employment agreement Expatriate Agreement or Letter of Assignment Choose U.S. law to apply to disputes Where possible, place burden on employee to comply with local laws (e.g. regarding taxes and immigration) Spell out benefit entitlements, including any special expatriate benefits Include what happens after assignment ends

Option 2: Hiring Local Employees Pros Clarity of legal obligation No risk of permanent establishment for U.S. parent Cons Cost of setting up subsidiary (if none exists) Host country employment laws apply

Atlanta / Austin / Berlin / Birmingham / Boston / Charleston / Charlotte / Chicago / Cleveland / Columbia / Dallas / Denver / Detroit Metro Greenville / Houston / Indianapolis / Jackson / Kansas City / Las Vegas / London / Los Angeles / Memphis / Mexico City / Miami Minneapolis / Morristown / Nashville / New Orleans / New York City / Orange County / Philadelphia / Phoenix / Pittsburgh / Portland / Raleigh Richmond / San Antonio / San Diego / San Francisco / St. Louis / St. Thomas / Stamford / Tampa / Torrance / Tucson / Washington, D.C. Local Employees: Documents Employment agreement – written contract required in many countries Make sure compliant with local laws Note that some countries require contracts to be in local language and/or bilingual (and local language version trumps)

Option 3: Independent Contractor Pros Less monetary investment Less legal involvement (if properly classified) Cons Less control Risk of misclassification Jurisdictions scrutinize these arrangements (China) Smaller talent pool

Atlanta / Austin / Berlin / Birmingham / Boston / Charleston / Charlotte / Chicago / Cleveland / Columbia / Dallas / Denver / Detroit Metro Greenville / Houston / Indianapolis / Jackson / Kansas City / Las Vegas / London / Los Angeles / Memphis / Mexico City / Miami Minneapolis / Morristown / Nashville / New Orleans / New York City / Orange County / Philadelphia / Phoenix / Pittsburgh / Portland / Raleigh Richmond / San Antonio / San Diego / San Francisco / St. Louis / St. Thomas / Stamford / Tampa / Torrance / Tucson / Washington, D.C. Consider Independent Contractor Relationship where: The host country does not permit employees without a host country entity in place The host country permits independent contractor relationships (or client understands and is willing to take the risk) The relationship is actually one of an independent contractor Arrangement is experimental or temporary Company has no desire to make substantial investment in the particular country The contractor won’t have access to your confidential information

Atlanta / Austin / Berlin / Birmingham / Boston / Charleston / Charlotte / Chicago / Cleveland / Columbia / Dallas / Denver / Detroit Metro Greenville / Houston / Indianapolis / Jackson / Kansas City / Las Vegas / London / Los Angeles / Memphis / Mexico City / Miami Minneapolis / Morristown / Nashville / New Orleans / New York City / Orange County / Philadelphia / Phoenix / Pittsburgh / Portland / Raleigh Richmond / San Antonio / San Diego / San Francisco / St. Louis / St. Thomas / Stamford / Tampa / Torrance / Tucson / Washington, D.C. Similar considerations to U.S. domestic agreement Use appropriate title (“Independent Contractor” or “Consulting” Agreement) Establish and emphasize the parties’ understanding of independent contractor status Avoid exerting control over the means by which the work is performed Avoid providing tools and equipment Avoid requiring exclusivity Payment considerations: How to pay? Which currency? If possible, use invoicing. Independent Contractor Drafting Tips

Atlanta / Austin / Berlin / Birmingham / Boston / Charleston / Charlotte / Chicago / Cleveland / Columbia / Dallas / Denver / Detroit Metro Greenville / Houston / Indianapolis / Jackson / Kansas City / Las Vegas / London / Los Angeles / Memphis / Mexico City / Miami Minneapolis / Morristown / Nashville / New Orleans / New York City / Orange County / Philadelphia / Phoenix / Pittsburgh / Portland / Raleigh Richmond / San Antonio / San Diego / San Francisco / St. Louis / St. Thomas / Stamford / Tampa / Torrance / Tucson / Washington, D.C. SpainContractors devoting 75% of time to one client have annual leave rights (18 days) FranceCompany must make withholdings and deductions similar to employers for a certain category of self-employed freelancers Australia“Fair Work Act” protects independent contractor’s right to associate (trade unions) Laws Protecting Contractors

Option 4: Temporary Staffing Agency Pros Minimal administrative burden Compliance with local law is in the hands of the agency Cons Can be costly Less control Some legal risk that temporary employees have same rights as recipient company’s employees (e.g. China) Quality and availability varies by country

Atlanta / Austin / Berlin / Birmingham / Boston / Charleston / Charlotte / Chicago / Cleveland / Columbia / Dallas / Denver / Detroit Metro Greenville / Houston / Indianapolis / Jackson / Kansas City / Las Vegas / London / Los Angeles / Memphis / Mexico City / Miami Minneapolis / Morristown / Nashville / New Orleans / New York City / Orange County / Philadelphia / Phoenix / Pittsburgh / Portland / Raleigh Richmond / San Antonio / San Diego / San Francisco / St. Louis / St. Thomas / Stamford / Tampa / Torrance / Tucson / Washington, D.C. Consider a Staffing Agency Where: The local entity does not permit independent contractor classification Opening a subsidiary is not desirable Hiring multiple host-country employees

Atlanta / Austin / Berlin / Birmingham / Boston / Charleston / Charlotte / Chicago / Cleveland / Columbia / Dallas / Denver / Detroit Metro Greenville / Houston / Indianapolis / Jackson / Kansas City / Las Vegas / London / Los Angeles / Memphis / Mexico City / Miami Minneapolis / Morristown / Nashville / New Orleans / New York City / Orange County / Philadelphia / Phoenix / Pittsburgh / Portland / Raleigh Richmond / San Antonio / San Diego / San Francisco / St. Louis / St. Thomas / Stamford / Tampa / Torrance / Tucson / Washington, D.C. Staffing Agency: Drafting tips Documents needed Temporary employment agreement (between staffing agency and employee) Contract with staffing agency (e.g., “Services Agreement”) Clearly place burden of compliance on service provider to the extent permissible under applicable law Include indemnification Make clear to employee that service provider employs employee

Atlanta / Austin / Berlin / Birmingham / Boston / Charleston / Charlotte / Chicago / Cleveland / Columbia / Dallas / Denver / Detroit Metro Greenville / Houston / Indianapolis / Jackson / Kansas City / Las Vegas / London / Los Angeles / Memphis / Mexico City / Miami Minneapolis / Morristown / Nashville / New Orleans / New York City / Orange County / Philadelphia / Phoenix / Pittsburgh / Portland / Raleigh Richmond / San Antonio / San Diego / San Francisco / St. Louis / St. Thomas / Stamford / Tampa / Torrance / Tucson / Washington, D.C. Temporary Staffing Agency- pitfalls Outsources employment obligations to local company BUT this is not a failsafe -Potential liability where service provider makes mistakes AND some countries are cracking down on this practice

Atlanta / Austin / Berlin / Birmingham / Boston / Charleston / Charlotte / Chicago / Cleveland / Columbia / Dallas / Denver / Detroit Metro Greenville / Houston / Indianapolis / Jackson / Kansas City / Las Vegas / London / Los Angeles / Memphis / Mexico City / Miami Minneapolis / Morristown / Nashville / New Orleans / New York City / Orange County / Philadelphia / Phoenix / Pittsburgh / Portland / Raleigh Richmond / San Antonio / San Diego / San Francisco / St. Louis / St. Thomas / Stamford / Tampa / Torrance / Tucson / Washington, D.C. Immigration Considerations Most countries require visa for entry All countries, including US, require specific work authorization for foreigners Accompanying spouse often not allowed to work Can be quite time-consuming and costly Requires planning well in advance of assignment Frequently overlooked or delayed in the expat planning process ImmigrationBusiness

Atlanta / Austin / Berlin / Birmingham / Boston / Charleston / Charlotte / Chicago / Cleveland / Columbia / Dallas / Denver / Detroit Metro Greenville / Houston / Indianapolis / Jackson / Kansas City / Las Vegas / London / Los Angeles / Memphis / Mexico City / Miami Minneapolis / Morristown / Nashville / New Orleans / New York City / Orange County / Philadelphia / Phoenix / Pittsburgh / Portland / Raleigh Richmond / San Antonio / San Diego / San Francisco / St. Louis / St. Thomas / Stamford / Tampa / Torrance / Tucson / Washington, D.C. Vet the following issues before deciding to proceed with an international assignment: Entity: Does the employer have an entity in destination country? Feasibility Timing Limitations on business visitor status & work activities (Don’t forget: Spouses) Visas for Expats—Critical, Fundamental, Practical Issues

Atlanta / Austin / Berlin / Birmingham / Boston / Charleston / Charlotte / Chicago / Cleveland / Columbia / Dallas / Denver / Detroit Metro Greenville / Houston / Indianapolis / Jackson / Kansas City / Las Vegas / London / Los Angeles / Memphis / Mexico City / Miami Minneapolis / Morristown / Nashville / New Orleans / New York City / Orange County / Philadelphia / Phoenix / Pittsburgh / Portland / Raleigh Richmond / San Antonio / San Diego / San Francisco / St. Louis / St. Thomas / Stamford / Tampa / Torrance / Tucson / Washington, D.C. Employment Law Considerations Example: Swiss employee sent to U.S. for a two-year assignment How to address Swiss vs. U.S. employment agreement and relationship Choice of law considerations Mechanisms for reducing risk to Employer Business Immigration Employment Law

Atlanta / Austin / Berlin / Birmingham / Boston / Charleston / Charlotte / Chicago / Cleveland / Columbia / Dallas / Denver / Detroit Metro Greenville / Houston / Indianapolis / Jackson / Kansas City / Las Vegas / London / Los Angeles / Memphis / Mexico City / Miami Minneapolis / Morristown / Nashville / New Orleans / New York City / Orange County / Philadelphia / Phoenix / Pittsburgh / Portland / Raleigh Richmond / San Antonio / San Diego / San Francisco / St. Louis / St. Thomas / Stamford / Tampa / Torrance / Tucson / Washington, D.C. Key Contract Terms for Expat Agreements Compensation: amount, source, assignment- related payments and benefits as distinct from ordinary compensation Working hours, holidays Data privacy Choice of law provision Identify legal employer Limits on employee’s right to represent host company Application of policies, procedures and benefits Contingencies: e.g., work permit requirements Termination provisions relating to the assignment Prohibition against duplicate benefits Other market benefits Business Immigration Contract Terms Employment Law

Atlanta / Austin / Berlin / Birmingham / Boston / Charleston / Charlotte / Chicago / Cleveland / Columbia / Dallas / Denver / Detroit Metro Greenville / Houston / Indianapolis / Jackson / Kansas City / Las Vegas / London / Los Angeles / Memphis / Mexico City / Miami Minneapolis / Morristown / Nashville / New Orleans / New York City / Orange County / Philadelphia / Phoenix / Pittsburgh / Portland / Raleigh Richmond / San Antonio / San Diego / San Francisco / St. Louis / St. Thomas / Stamford / Tampa / Torrance / Tucson / Washington, D.C. Assignment-Related Discretionary Benefits Long Term Expat Pre-assignment visit Shipment of personal effects Housing: temporary accommodation and long-term Relocation allowance Cost of living allowance Work permits for family members Tuition Travel stipend Language training Health insurance coverage Tax equalization Reduce/eliminate overtime Short Term Expat Housing, travel Business Immigration Contract TermsBenefits Employment Law

Atlanta / Austin / Berlin / Birmingham / Boston / Charleston / Charlotte / Chicago / Cleveland / Columbia / Dallas / Denver / Detroit Metro Greenville / Houston / Indianapolis / Jackson / Kansas City / Las Vegas / London / Los Angeles / Memphis / Mexico City / Miami Minneapolis / Morristown / Nashville / New Orleans / New York City / Orange County / Philadelphia / Phoenix / Pittsburgh / Portland / Raleigh Richmond / San Antonio / San Diego / San Francisco / St. Louis / St. Thomas / Stamford / Tampa / Torrance / Tucson / Washington, D.C. Tax Considerations Permanent Establishment Treaty or local law Bilateral Tax Treaty Fixed Place of Business Contract Authority Business Contract Terms Tax Immigration Benefits Employment Law

Atlanta / Austin / Berlin / Birmingham / Boston / Charleston / Charlotte / Chicago / Cleveland / Columbia / Dallas / Denver / Detroit Metro Greenville / Houston / Indianapolis / Jackson / Kansas City / Las Vegas / London / Los Angeles / Memphis / Mexico City / Miami Minneapolis / Morristown / Nashville / New Orleans / New York City / Orange County / Philadelphia / Phoenix / Pittsburgh / Portland / Raleigh Richmond / San Antonio / San Diego / San Francisco / St. Louis / St. Thomas / Stamford / Tampa / Torrance / Tucson / Washington, D.C. Tax Considerations Permanent Establishment Inbound/outbound Impact of maintaining foreign employment agreement on U.S. permanent establishment risk Short term/long term “Deemed services” provisions in tax treaty India, China, Indonesia Authority to “Conclude Contracts” for Home Company

Atlanta / Austin / Berlin / Birmingham / Boston / Charleston / Charlotte / Chicago / Cleveland / Columbia / Dallas / Denver / Detroit Metro Greenville / Houston / Indianapolis / Jackson / Kansas City / Las Vegas / London / Los Angeles / Memphis / Mexico City / Miami Minneapolis / Morristown / Nashville / New Orleans / New York City / Orange County / Philadelphia / Phoenix / Pittsburgh / Portland / Raleigh Richmond / San Antonio / San Diego / San Francisco / St. Louis / St. Thomas / Stamford / Tampa / Torrance / Tucson / Washington, D.C. Tax Considerations Payroll taxes Treaty or local law 183 days in any 12 month period Inbound/outbound Short term/long term Social Security Totalization Agreement How to manage Split payroll Shadow payroll

Atlanta / Austin / Berlin / Birmingham / Boston / Charleston / Charlotte / Chicago / Cleveland / Columbia / Dallas / Denver / Detroit Metro Greenville / Houston / Indianapolis / Jackson / Kansas City / Las Vegas / London / Los Angeles / Memphis / Mexico City / Miami Minneapolis / Morristown / Nashville / New Orleans / New York City / Orange County / Philadelphia / Phoenix / Pittsburgh / Portland / Raleigh Richmond / San Antonio / San Diego / San Francisco / St. Louis / St. Thomas / Stamford / Tampa / Torrance / Tucson / Washington, D.C. Additional Documentation Additional Documentation Affecting the Assignment Agreements with Host Country Affiliates Intra-Company Agreement Intra-Affiliate Agreement Confidentiality Agreements Restrictive Covenants Tax Equalization Benefit Agreement Expat/Relocation Benefits Policy

Atlanta / Austin / Berlin / Birmingham / Boston / Charleston / Charlotte / Chicago / Cleveland / Columbia / Dallas / Denver / Detroit Metro Greenville / Houston / Indianapolis / Jackson / Kansas City / Las Vegas / London / Los Angeles / Memphis / Mexico City / Miami Minneapolis / Morristown / Nashville / New Orleans / New York City / Orange County / Philadelphia / Phoenix / Pittsburgh / Portland / Raleigh Richmond / San Antonio / San Diego / San Francisco / St. Louis / St. Thomas / Stamford / Tampa / Torrance / Tucson / Washington, D.C. End of Assignment Issues Address in the international assignment agreement End of assignment/end of employment relationship Return/localize Relocation benefits Reassignment Severance

Atlanta / Austin / Berlin / Birmingham / Boston / Charleston / Charlotte / Chicago / Cleveland / Columbia / Dallas / Denver / Detroit Metro Greenville / Houston / Indianapolis / Jackson / Kansas City / Las Vegas / London / Los Angeles / Memphis / Mexico City / Miami Minneapolis / Morristown / Nashville / New Orleans / New York City / Orange County / Philadelphia / Phoenix / Pittsburgh / Portland / Raleigh Richmond / San Antonio / San Diego / San Francisco / St. Louis / St. Thomas / Stamford / Tampa / Torrance / Tucson / Washington, D.C. Happy to answer any questions Bernhard Mueller Ogletree Deakins Law Firm International Practice Group (803)