1. Global Mobility University
ACC Labor and Employment Summit
25 January 2018
Seattle, Washington

2. 09 November 2018
Our Speakers Today
Kerry Weinger Partner, Chicago T:
Nicole C. Calabro Partner, San Francisco T:
Betsy Morgan Partner, Chicago bakermckenzie.com T:
Beth Henderson Attorney, Global Employment and Migration Team
Microsoft Corporation

3. Agenda 1 Introduction to Global Mobility 2
Employment Law and Documentation 3
Immigration 4
Taxes 5
Global Equity Plan Issues

4. Introduction to Global Mobility Kerry Weinger1
Introduction to Global Mobility Kerry Weinger

5. What we will discuss during this course
Who is a Mobile Employee?
Introduction to Legal and Tax Issues Created by Sending an Employee to Work in Another Country

6. Types of mobile employees
Expatriate assignments
Indefinite / permanent transfers
Short-term international assignments
Cross-border travelers
Rotators
Virtual Assignments
Global Nomads
Business Commuters
Others
Digital Nomads
Working from Home
Just in time assignments
Accidental expatriates

7. Legal & tax issues to consider for the mobile employee
Who should be the employer?
Immigration compliance
Income tax and social tax compliance
Benefit plan issues
Documenting the assignment / relationships

8. Employment Law and Documentation2
Employment Law and Documentation

9. Employment Law 101 What does it mean to be the "employer"?
Direction and control
Employee benefits and insurance coverage
Protection under Federal, state and local employment laws
Implications for global mobility:
Immigration
Tax (individual and corporate)
Withholding and reporting / payroll
Local registration / doing business

10. Documenting the assignment / relationships
Letter of understanding / assignment letter
Employee consent to transfer
Secondment / intercompany agreements
Local employment agreement
Repatriation letter
Repayment agreement

11. Purpose of expatriate agreement
Specify terms of assignment
Parties acknowledge rights and obligations
Evidences employment relationship
Significant in event of dispute and litigation

12. Key terms Identify the employer / reporting relationships
Duties / responsibilities
Clarify scope and length of assignment
Work authorization
Is "at will" language permitted?
Hours / location
Compensation / benefits
Vacation / holiday
13th month bonus
Termination of assignment / employment
Choice of law / forum
Language requirements
Privacy
Note: Do not mention equity awards in employment documents

13. Other documents Non competition / solicitation Equity award letters
Confidentiality
Non competition / solicitation
Intellectual property protection
Local work rules / policies

14. Immigration Betsy Morgan and Beth Henderson3
Immigration Betsy Morgan and Beth Henderson

15. Course syllabus
Global Immigration 101: What Triggers the Need for Work Authorization?
Entry as Business Visitor: Why the Perpetual Business Traveler May Be at Risk
Primer on Work Permit / Visas: Lowest Common Denominator Concepts
The Devil is in the Details: Considerations That May Keep Your Employee (and You) Up at Night

16. Global Immigration 101 What triggers the need for work authorization?
Duration of stay
Source of income
Activities performed in destination country
Frequency of travel
Role that is global in scope
Accrual of profits from traveler's activities (where and who)

17. Entry as business visitor
Why the perpetual business traveler may be at risk
What visa requirement?
Increased scrutiny at ports of entry

18. Primer on work permit / visas
09 November 2018
Primer on work permit / visas
Lowest Common Denominators
In-country corporate sponsor
Employee with executive / managerial experience or specialized skills
Employee who meets health and character-related requirements
Proof that employment of foreign worker will not adversely impact the local labor market

19. 4
Taxes Kerry Weinger

20. Ongoing home country tax approaches
Citizenship (U.S. – but otherwise very rare)
Residence (usually facts and circumstances definition)
Hybrid
If foreign assignment income is taxed, relief may be available via foreign tax credit or exemption
THIS IMPACTS THE ONGOING HOME COUNTRY TAX EXPOSURE DURING THE ASSIGNMENT

21. Host country taxation Triggers for becoming tax resident
Consequences – worldwide taxation but also consider relief
If not tax resident, taxed on host country source income
How is the source taxation determined?
Is there a territorial regime?

22. U.S. Social Security (FICA)
Who is subject depends upon the status of employer and the US tax status of employee.
Employing Entity
US citizen/greencard holder
Nonresident alien
"American Employer"
FICA on worldwide income
FICA on US source income
Other Entity
Definition of "American Employer"
Entities legally organized under US law
Includes certain foreign entities that contract with U.S. federal government

23. Employment relationships and payroll procedures
Employment is the formal relationship between employee and employer
Payroll is the process of delivering compensation to the employee
Employment and payroll are not synonymous!

24. Global Equity Plan Issues Nicole Calabro5
Global Equity Plan Issues Nicole Calabro

25. Taxation Taxation: Employee Taxation: Employer Local Entity Timing
Types of taxes (income versus social taxes)
Preferential tax treatment
Self-reporting vs. tax withholding
Impact of reimbursement by local employing entity
Taxation:
Employer Local Entity
Tax withholding and reporting (payroll / non-payroll) obligations
Employer social tax obligations
Local corporate tax deduction by local employing entity

26. Securities laws
Key Question: Is the award an "offering of securities"?
Registration / prospectus requirements
Disclosure / lodgment requirements
Exemptions

27. Labor & employment laws
Acquired rights
Termination indemnities
Discrimination (Part-time workers / age / gender)
Approval / consultation requirements with local works councils or trade unions

28. Foreign currency / exchange controls / reporting
Approval / registration requirements
Conversion of funds
Remittance of funds
"Foreign" Asset Reporting (many new rules recently enacted)
Holding of foreign company shares or even awards in some cases
Maintenance of foreign bank accounts

29. Data privacy Collection, processing and transfer of employee data
Consent requirements
Registration requirements

30. Best practices and risk mitigation strategies
Why? Other Comments? #1
Adopt global form(s) of award agreement
Ease of administration; flexibility for addressing changing circumstances (employee moves, legal changes) without formal amendments #2
Assess nature of mobile award recipients:
Nature of award recipients
Key countries (home/host)
Award type(s)
Employment structure
Risk assessment; development of tracking system (see #3 and #4) #3
Establish manageable tracking system of key information for mobile award recipients
Supports legal, regulatory and tax compliance actions #4
Develop "assumptions" for certain key information for mobile award recipients

31. Best practices and risk mitigation strategies
Why? Other Comments? #5
Prepare legal, regulatory and tax "rules" for key home / host country combinations (based upon capabilities of tracking system and company-developed assumptions)
Supports legal, regulatory and tax compliance actions #6
Prepare tax compliance calendar for key events #7
Develop and implement appropriate procedures for taxable events
Legal, regulatory and tax compliance #8
Periodically review/update practices #2 to #7 periodically (annually at a minimum)

32. 09 November 2018
Our Speakers Today
Kerry Weinger Partner, Chicago T:
Nicole C. Calabro Partner, San Francisco T:
Betsy Morgan Partner, Chicago bakermckenzie.com T:
Beth Henderson Attorney, Global Employment and Migration Team
Microsoft Corporation