Managing Intermittent Foreign Employees in the I-9 Context
[Editor’s Note: Today’s article is courtesy of Claudia Martorell, Attorney at Larrabee | Mehlman | Albi | Coker LLP in San Diego, California.]
As business operations become more global in scope, it has become increasingly common for U.S. companies to sponsor foreign nationals for intermittent employment in the U.S. Such assignments may occur in regular intervals or more sporadically, and may vary in duration from days, to weeks, to months. Intermittent employees may be assigned to work off-site and may, depending on visa classification, be able to remain on a foreign payroll while working in the U.S. The nature of intermittent employment can make it very difficult for the U.S. petitioner to keep track of individuals’ presence in the U.S., placing companies at risk of I-9 non-compliance, as well as U.S. payroll and tax laws.
The Internal Revenue Code places withholding and reporting burdens on US businesses for all workers receiving a salary while employed in the US, even when on foreign payroll. Although the topic of payroll and tax implications falls outside the scope of today’s article, employers should consider how intermittent employment of foreign nationals in the U.S. can implicate payroll and tax liaiblities. Both foreign nationals and their employers should consult with tax professionals experienced in international tax law to develop strategies to reduce tax liability while ensuring compliance with US and foreign tax laws.
Form I-9 Compliance
Regulations require U.S. companies to keep an I-9 on file for all persons working in the U.S for a U.S. employer. This requirement applies regardless of the amount of time the worker spends in the US and even when the employee remains on foreign payroll. While the employer may not consider this individual a “U.S. employee”, if they are working in the U.S. pursuant to a work visa sponsored by the U.S. employer, then they are a U.S. employee for I-9 purposes.
With intermittent employees often spending a minimal amount of time in the U.S. or entering the U.S. with little notice, completing a Form I-9 within the three day rule can be challenging. The employee may neglect to report to HR after initially entering the U.S. for employment and subsequently depart before a Form I-9 can be completed, resulting in a substantive violation according to I-9 regulations. In this situation, the Form I-9 would have to be completed upon the employee’s next entry into the U.S. As a result of the I-9 often not being done timely (or at all), E-Verify completion for these indivduals is also a challenge and can lead to non-compliance.
An additional issue that may arise when sponsoring intermittent foreign employees is the timeliness of reverifying employment authorization in Section 3 in instances where documents establishing employment authorization are due to expire while that employee is outside the U.S. In such instances, a note or memo should be affixed to that employee’s Form I-9 stating that reverification could not take place because the individual was absent from the U.S. The company must then keep track of the employee’s next trip into the U.S. in order to complete the reverification of employment on the Form I-9 as soon as the employee returns to the U.S.
Moreover, companies may inadvertently neglect to verify the employment eligibility of intermittent foreign employees. This is often the biggest challenge regarding intermittent employees as the employer often treats these individuals differently (as foreign based employees) and as such, may overlook any U.S. requirements for employment. Where the employee remains on a foreign payroll, the missing Form I-9 may not be discovered during a routine I-9 self-audit if the employer were only to review U.S. payroll records. However, the issue will often come up during an ICE audit if company tax records are requested.
Given the difficulties of tracking the travels of mobile employees, companies should develop policies and procedures to ensure HR is notified, in advance, of international travel plans for intermittent employees in order to decrease the potential for I-9 and E-Verify violations. For organizations with a global workforce, adopting an electronic I-9 software can be an efficient way to (literally) track all of the moving parts and work authorization deadlines for its international employees.
It can be a daunting task to keep track of intermittent employees’ presence in the U.S. but as immigration and laws are becoming more enforcement-based, the importance of implementing a compliance system to reduce these liabilities cannot be overstated.