Download EBTs— Clear and Present Danger

EBTs—
Clear and Present Danger
BY SARAH DEHAYES AND SOFIA PIRES
Compliance remains a topic of perpetual importance for mobility professionals, especially when
extended business travelers are considered. DeHayes and Pires write that various measures can be
employed to proactively manage and mitigate the risks associated with these types of mobile
employees, with technology playing an integral role in the solution architecture.
A
n “extended business traveler” (EBT) generally
is defined as an employee who travels internationally on business on a temporary basis for a
minimum of 10 consecutive days at any one time during
a one-year period to a given country.
Typically, business line management determines the
need for employee travel and expenditure for business
trips. In many organizations, no distinction exists
between the travel process and oversight of an employee
traveling to a location for a week or a month. Given that
travel expenditures are being processed and initially
tracked by the company’s corporate travel department or
preferred provider, they are key stakeholders in the identification of EBTs. The travel function may use a webbased platform, company intranet, or alternate technolo-
28 MOBILITY/DECEMBER 2011
gy for bookings that may or may not be integrated into
the company’s data warehouse. Why should this be a
concern?
Each country has its own governing immigration and
tax laws. The number of days an EBT is physically present
in a given country, the nature of the work he or she may
be performing, and other criteria (such as the employee’s
employing entity, payroll location, stock option exercise,
etc.) may result in unintended tax and immigration compliance risks for the employer. This lack of compliance
reporting may translate into immigration delays or denial,
employee deportation or legal prosecution, increased
costs, audits, and overall, a negative company reputation.
Consistent infractions can even jeopardize a company’s
ability to operate and conduct business in a country.
MOBILITY/DECEMBER 2011 29
From immigration caps to financial
reform legislation, it can be challenging for companies to both navigate
and remain up-to-date on critical
operating procedures and further
assess the effects on global mobility.
With government coffers running
low, typical responses can be felt
globally from protectionism of one’s
labor pool, seizing the opportunity to
levy taxes on capital flow, and benefits scheme changes to a more vigorous adherence of laws already in
place.
Organizationally, we can all sense
the intense scrutiny on costs at all levels in this economic climate. Budget
limitations notwithstanding, surprise
expenditures such as lingering tax liabilities are unwelcome. The distraction of playing catch-up with internal
ownership and allocation of these
unanticipated consequences of EBTs
is frustrating at best.
The following is an account of
how one organization confronted
this risky landscape and found a new
administrative design to address
compliance and awareness.
Theory in Practice
A multinational organization we
have assisted serviced their global
mobility program via a regional service delivery model. They have a large
population of EBTs globally and this
mobility type was managed by the
global mobility function. The reporting and management of their EBTs
was inconsistent across regions.
Because of these concerns, the
company embarked on a journey to
create awareness across various levels
and functions of the organization
through education; to proactively
identify EBTs prior to the commencement of travel and develop
standardized tracking tools to ensure
30 MOBILITY/DECEMBER 2011
consistency throughout its support
structure.
To achieve these goals, the company first explored the current state of
procedures relative to candidate
identification and decision-making
criteria. This was a cross-functional
exercise with the commitment of
global mobility, tax, and corporate
travel. A dedicated EBT mobility
policy and assignment letter were
created, distinguishing this population from a typical business traveler
or a short-term assignee (this policy
distinction created instant awareness
across the HR community). Policy
benefits included mandatory tax
briefings and immigration coordination. The company also centralized
the operations team dedicated to
EBTs, resulting in greater consistency with reporting and tracking.
Tools such as process flows, scripts,
and reporting were developed to
facilitate the workflow.
From a technology perspective, the
company’s intranet was leveraged to
push out information and share
resources. The human resource information system (HRIS) was not originally designed to accommodate
EBTs, causing resistance by users and
the use of manual processes to sup-
plement data collection. The base of
the tracking and reporting data warehouse became the travel department’s software, which then was
incorporated into a plan for a more
fully integrated technology platform
feeding in data from the accounts
payable and HRIS systems.
Continuous informational training
sessions with HR and business managers proved most effective and
led to sustainable results. Crossfunctional participation required
involvement from senior management and an understanding of the
repercussions of non-compliance. A
shift in perspective took place, now
viewing these recurring business
trips as a function of employee
mobility. Disciplinary action was
taken to address repeat offenders
with senior management.
Effective Application
This company took several steps
that highlight some representative
best practices in the successful management of EBTs. The following recommendations identify the anchors
of a well-integrated program:
Policy development. Defining eligibility criteria for extended business
trips within one’s organizational context and suite of mobility plans and
tiers will aid in clear delineation of
this population. A dedicated policy
and EBT memo (outlining the terms
and conditions) help facilitate consistent and equitable treatment and
support of employees while also
framing the employee’s responsibilities in the process. The oversight and
ownership of EBTs are most successfully placed within the global mobility space given the existing architecture of compliance, tools, service
delivery resources and technical
expertise. Typical policy provisions
and guidelines include temporary
accommodation, per diem or T&E
reimbursement in alignment with the
global travel policy, tax consultation
and return preparation (as required),
immigration procurement, excess
baggage and airfare.
The power of technology.
Technology drives business forward
by leveraging efficiencies. The integration of systems allows for regional
data to be synthesized globally and
ultimately safeguard compliance.
Technology affords mobility teams
the ability to manage workflow, track
activity and share data with their
external suppliers. Limiting the interface to pertinent key EBT identifiers,
along with the additional supporting
information required to deliver the
program, reduces the extensive time
and cost of standard technology constructs. Typical relevant data include:
employee name, employee ID,
employee contact details, home location, host location, business division,
cost center, business manager, start
date, end date and the number of
days in the host location for each trip.
Suppliers, who may have existing
access to the client’s HRIS system via
a web portal, can extract the necessary information in real time and
proactively service the EBT population. For those clients who do not
have the internal technology, similar
results can be obtained via assessment tools offered from various suppliers that provide both countryspecific compliance regulations and
cost projections to be used for budgetary purposes. Maintenance of
those assessments for current application requires due diligence but can
prove highly effective in addressing
the exposure associated with EBT
activity.
Cross-functional involvement.
The engagement of multiple departments within the organization highlights the grasp that mobility and this
particular mobility type—EBTs—
truly have. From tax and treasury to
travel and legal, the effects of EBTs
are far-reaching, thus a solution
should best be crafted synergistically.
Securing buy-in within an organization can assist in forging a new path
to proactive management of these
employees on extended business
travel. This strong partnership aids in
the implementation of new procedures and workflow that could be
met with resistance or at a minimum,
irritation, if the rationale is not successfully conveyed.
Communication and education.
Launching an internal awareness
campaign to highlight the compliance risks and exposure EBTs can
pose to the organization can be an
effective call to action. Educating
HR business partners and line management alike, an organization can
be well on the way to greater investment in the EBT process and administration. Supplemental manager and
administrator guides can support
continued learning and new team
member onboarding. Communications can be reviewed on a quarterly basis to maintain focus and relevance.
Ongoing vigilance. The maintenance of data integrity is vital.
Country regulations or modifications
to corporate governance rulings are
MOBILITY/DECEMBER 2011 31
Testing Your Knowledge
Let’s take a bird’s eye view of your own organization and the
management of EBTs. Though some of the choices are a bit irreverent,
we hope the themes of technology, oversight and compliance resonate.
1. How do you define EBTs in your organization?
a) Eagerness Before Thinking
b) Extended Business Travelers
2. How do you identify EBTs?
a) Pick them out of a line-up
b) In our HRIS system
3. How do you track EBTs?
a) Via the signal from an ankle monitor
b) Our integrated HRIS system with enhanced tracking tools
4. Who does the employee on an EBT call if detained at the border?
a) The immigration provider
b) Global mobility
c) The client
Answers: 1. b 2.c b 3. b 4. a and b.
ever-changing. Communicating
these regulatory updates to stakeholders ensures that compliance
terms are being met. Similar to other
mobility programs, the EBT policy
and accompanying administrative
tools should be audited frequently,
as the maintenance of this educational material is fundamental in the suc-
32 MOBILITY/DECEMBER 2011
cessful management of EBTs. Extracting and disseminating valuable
reporting from an organization’s
mobility system of record can be
beneficial to keep a close eye on the
movement of its mobile population.
In tandem with tracking tools, the
establishment of prescribed escalation protocols can be implemented
to send off “alarms” to key stakeholders and decision-makers prior to
an EBT approaching a critical tax
threshold. The organization then is
empowered to make an informed
decision rather than pick up the
pieces after an unwitting commitment.
Bringing It All Together
The subject of extended business
travelers and their related compliance
risks for organizations will continue
to be a hot topic of discussion in the
mobility community. It is true that
the hazards are plentiful, however,
the various measures discussed above
can be implemented to tighten procedures, enhance visibility and
deploy mobility administration with
greater confidence and ease. Now go
forth and wear your compliance
badges proudly!
Sarah DeHayes is director, consulting
services at Crown Relocations, Brookfield,
CT. She can be reached at +1 203 482 6271
or e-mail [email protected].
Sofia Pires is a project manager, consulting
services at Crown Relocations, Brookfield,
CT. She can be reached at +1 203-788-9943
or e-mail [email protected].