Austin Labor & Employment Updates ARCIE JORDAN

INTERNATIONAL EMPLOYMENT Presents Unique Challenges –Foreign legal provisions –Foreign customs & practices –Assimilation of foreign workers in U.S. –Creation of tax presence through actions of personnel

Foreign legal provisions Rendering of services abroad may create non- waivable employee rights under law of foreign country, irrespective of terms of employment agreement or expatriate assignment, for example: –Severance payments –Profit sharing

Foreign legal provisions Rendering of services abroad may create liability for employee-related tax contributions and other government obligations under law of foreign country, for example: –Host country payroll tax –Host country social security contributions

Foreign legal provisions Immigration laws limit activities of expatriate workers Unauthorized activities may be voidable or unenforceable under foreign law; for example: –Participation in Board Meetings Absence of proper immigration permit creates liability for worker and host company

Foreign legal provisions May impede enforcement of non-compete agreements –May need to look for other ways to achieve goals (e.g., confidentiality & non-disclosure agreements) Inbound foreign workers may have rights under foreign legal provisions when providing services in the U.S., for ex: employer-provided housing or subsidized transportation

Foreign customs & practices Host country practices may be difficult to accept in light of U.S. laws, for example: –Protection or “white” unions –Negotiations with “red” or “democratic” unions –Recruitment & interviewing practices –Worker termination practices

Assimilation of foreign workers in U.S. Foreign practices may require greater amount of training and education than anticipated, for example: –Sexual harrassment –FCPA compliance –Use of Ombudsmen & grievance procedures

Creation of tax presence through actions of personnel Conduct of certain activities by workers or representatives may create income tax liability for expatriates abroad, as well as for U.S. company –Concept applies in the U.S. for foreign company workers & representatives too –Tax treaty provisions, as well as domestic laws should be examined Tax liability may exist for individual worker/rep too