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The Definitive HR Checklist-Moving Workers from Canada to the U.S.A.
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The Definitive HR Checklist-Moving Workers from Canada to the U.S.A.
Introduction to this Web Page
Introduction: Canada to U.S. Transfers
Orchestrating the Move
Short Human Resources Checklist
Detailed Checklist: All Human Resource Issues
Return to the top of this page
1. Introduction to this Web Page
Even with NAFTA, human resource managers face a
multitude of unique issues when transferring employees from Canada to the U.S.
This page provides three massive checklists containing all of these issues.
The
Law Office of Joseph C. Grasmick is prepared to assist
HR managers with U.S. immigration permits. Nevertheless there are other
related employment issues to handle. Although we do not represent clients in
these areas, we share this information with our readers.
For a list of other professionals who can handle items on these checklists
see Joseph Grasmick's Rolodex® or the
U.S. Trade Directory. For help locating the right
experts, we invite you to seek our
recommendation. For detailed information on HR U.S. immigration issues, see
the links on the home page.
Return to the top of this page
2. Introduction: Canada to U.S. Transfers
Irrespective of whether the transfer to the U.S.A. is short term or
permanent, the issues are often complex --- and solutions not quick or easy.
Having said that, this page shows you how you can plan to make transfers
effective, cost-efficient and with least hassle to you (the employer), and for
the transferee.
As in any major project, good planning --- in advance --- is the key.
Similarities and Differences
Canada and the U.S.A. are neighbors and normally good ones - except if we
are talking about a special tariff on shingles or beer, or a Stanley Cup
series between the Maple Leafs and the Pittsburgh Penguins!
We share a common border, love of the outdoors,
BBQ's, common language (well, almost), currency called a dollar, and both
countries have education and personal taxes!
You will see that in these similarities, the differences are already
emerging --- and major ones at that!
The dollar relationship tends to be up and down like a a yo-yo --- although
for the last few years the yo-yo doesn't seem to have had much elasticity
and has resulted in the Canadian dollar usually sinking --- from 87 cents
(U.S.), to 70 cents, before recently creeping up from the floor to 73
cents (U.S.)
This raises a major issue in determining how and where the transferee should
be paid. Other compensation and benefit elements which must be addressed
include:
health (and dependent) care coverage;
life, disability, and other insurances;
pension, saving plan participation.
Likewise, decisions are also required on important life-style elements such
as:
schooling for children;
spousal employment;
accommodation (in both countries);
cultural, church, sport, clubs and other leisure activities.
Having got your attention - and perhaps raised your concern as to how to
cope with all these issues and elements, now, let's try to put these matters
into a logical, cohesive plan.
Masterminding The Move-Major Functions
We've already said good planning is the key.
Whether you decide to handle the move inside your company, or to outsource
and use a third party provider, someone must mastermind the move and
have overall responsibility for its implementation (we avoided the word "execution"
as that might be what happens if the move is not well planned!)
As the quarterback orchestrates strategy for the football team, so the
quarterback in cross border transfers, orchestrates and masterminds the
totality of the move --- of course working in concert with you, the employer.
In the past, most of the transfers were initiated by large Canadian
companies who usually had their in-house HR Department to plan and coordinate
such moves.
Now this seems to be changing in a number of ways:
Small and medium size companies have been forced to enter the international
arena to survive and prosper - particularly with the Free Trade Agreement;
Large companies have continued to decentralize and downsize; their in-house
HR capabilities have consequently dwindled, been fragmented or
dismantled --- or in smaller companies, simply did not exist.
Outsourcing to third party providers seems to be the "in-thing."
It is critical that the third party provider has excellent access to the
key executive/manager of the Canadian company. Even with telephones, faxes,
E-mail, etc., there is no substitute for periodic face to face meetings,
often required at short notice. Such services located in Buffalo,
"The Gateway or Bridge to the U.S.A.," are
therefore strategically placed to best handle transfers --- with quick
travel to southern Ontario or Toronto within an hour (peak traffic
downtown excepted!). While knowledge and experience of
U.S. Immigration and employment arrangements are
essential requirements to handle transfers, so is a thorough appreciation
of similar arrangements in Canada. Having personally worked and lived in
Toronto for 10 years until transfer to the U.S.A. four years ago provides
this background; as does having orchestrated the move of a large corporate
office from Canada to the U.S.A. at that time.
Whether the quarterback is someone in your company, or a third party
provider, the role is very similar.
This role is indispensable and should be one person within the company -
or a company representative, plus one person in the third party provider.
This approach (the quarterback appointment) is the most important step in
the whole process towards ensuring that the transferee has a "smooth
move" with:
a known, individual person to refer to for all aspects, particularly
problems;
assurance of all elements being coordinated in a timely manner;
and in Canadian Institute terms, a transfer that is accomplished "quickly
and painlessly." Note: They may have used a little "poetic
license" here!
Career
You will normally only be transferring your best employees in their
respective areas of skill whether they be executives, managers or
professionals. They must be able to expect equal "best" treatment
from you (the employer) otherwise you will risk losing these key people.
This starts with career planning---which some say is obsolete in the world
as it is today --- but don't you believe that. Be open and honest with
the transferee.
Give specific details of the terms of the transfer, if possible, or as a
minimum, guidance as to the approximate period, plus tasks/objectives to be
completed prior to return to Canada. Identification of the likely next
career appointment likewise is of paramount importance to the transferee.
This may not always be clear, but some form of undertaking is key to a
successful move.
Masterminding The Move-The Detail
After a decision has been made as to the length/type of transfer we are then
in a position to start designing all the transfer elements.
Return to the top of this page
3. Orchestrating the Move
Quarterback-Masterminds the Whole Move
DETERMINE INTERNAL/EXTERNAL RESPONSIBILITIES FOR ALL ASPECTS OF
TRANSFER
APPOINT FIRMS FOR OTHER ELEMENTS
COORDINATE ALL ELEMENTS WITH COMPANY AND TRANSFEREE
COUNSEL AND ADVICE TO EMPLOYER
MONITOR PERFORMANCE OF THIRD PARTY PROVIDERS
Immigration Expert
IMMIGRATION VISAS
HANDLE ALL U.S. EMPLOYMENT/RESIDENT ISSUES FOR TRANSFEREE &
FAMILY/DEPENDENTS
Compensation and Benefit Design
DEVELOP TERMS & CONDITIONS RELATED TO TRANSFER INCLUDING:
COMPENSATION
PENSION & BENEFITS
PERQUISITES
RELOCATION PROVISIONS
Relocation
ASSISTANCE WITH:
MOVING HOUSEHOLD GOODS AND AUTOMOBILE
HOUSING (CANADA & U.S.A.)
SCHOOLING
EMPLOYMENT FOR SPOUSE/CHILDREN
LIFESTYLE SELECTION (EG. CLUBS, CHURCHES, SPORTS, ETC.)
Tax and Financial Counseling
CANADIAN & U.S.A. TAXES (PERSONAL & COMPANY)
ADVICE ON "RESIDENCE" ALTERNATIVES FOR
TAX PURPOSES
COUNSELING RE: ESTATE PLANNING (PREPARATION OF NEW WILL, IF REQUIRED).
INSURANCE & INVESTMENT ADVICE
Return to the top of this page
4. Short Human Resources Checklist
Reasons For Assignment
Category of assignment can make significant differences to elements in
transfer arrangements and their size/level!
Executive management
President, C.E.O., senior executive of U.S. company
Start-up, joint venture, acquisition
Management development
Broaden experience for future career promotion
Technical support/knowledge
Support or install technical/professional programs; train local employees.
Assignment Term
Different elements and/or practices applicable to each term
Short term
3 to 6 months
Extended term
6 to 12 months
Expatriate term
1 to 3 years
International transfer (permanent).
Career Planning
Next appointment/re-entry plan
Working spouse
Compensation
Base salary
Annual (bonus) incentive
Long term incentive
Housing and/or cost of living allowance
Retained housing allowance
Mobility premium
Tax equalization
Benefits
Pension and Savings Plans
Deferred compensation
Health, life, disability insurance
Flexible Spending Account
Vacation/holidays
Dependent care
Social Security
Perquisites
Automobile/allowance
Club(s)
Financial counseling, tax planning/preparation
Annual medical examination
Fitness facility/health club
Computers/fax
Home security
Car telephone
Taxation
Canada
U.S.A.
Dual tax treaty
Residency
Tax equalization/adjustment
Relocation
Look-see visits
Accommodation
Canada/U.S.A.
Retain house; rent/sell/leave vacant
Buy/rent in U.S.A.
Transportation personal/household effects
Method/cost
Storage
Legal and realtor fees
Incidental expenses/allowance
Dependent care
Education
Canada/U.S.A.
Working spouse (See the FAQ re: immigration for
working spouses
Government documentation---Work/residence approvals
Home leave/compassionate leave/travel, etc.
Return to the top of this page
5. Detailed Checklist: All Human Resource Issues
I. Personal and Career Lifestyles
Career
Reason for transfer and term?
Where next? Give assurances; must have plan.
Monitor performance
Communications
Develop on-going communications program; keep in touch!
Family
Working spouse? See the FAQ-Frequently Asked
Questions information about immigration for working spouses.
Children education?
Dependent care responsibilities?
Housing
Rent, sell or leave vacant
Type of accommodation in U.S.A., rent/buy?
Lifestyle
Decisions in Canada and U.S.A. regarding clubs, sport, committees, church,
cultural, clubs and other leisure activities.
Security
Increased job/career concern?
Personal security concerns?
II. Compensation
Cash compensation
How much pay? U.S. or Canadian dollar basis?
How/where paid? U.S. and/or Canada?
Recognize higher costs - housing/cost of living?
Base salary
Same or higher (to recognize additional responsibilities)?
Related to competitive salaries in U.S.A. or Canada?
Annual bonus
Based on Cdn. or U.S. company plan (or split)?
Which salary basis - U.S. or Cdn. company?
Long term incentive
Eligible same as in Canada, or
More/less grants (or special grant as part of transfer arrangements)?
Mobility premium
To motivate to transfer? How much?
Recognize disruption, etc?
Housing allowance or loan
Recognize higher cost of living?
Cost of living allowance/differential
Recognize higher cost of living?
Retained housing allowance
Incentive to retain home in Canada.
Contributions to mortgage, maintenance, utilities, etc;
In lieu sell/repurchase.
Education
Pay for boarding school (or additional living expenses) for children
remaining in Canada, or higher fees in U.S.A.
Tax equalization
Need determine company practice; reimburse all additional personal taxes?
Very careful tax planning essential to:
avoid excess taxes
take advantage of dual tax treaty Canada/U.S.A.
determine "residency" for tax purposes
Currency exchange
If some/all compensation paid in Canadian dollars, adjust amount for rate
changes?
III. Pensions and Benefits
Pension plans
Retain in Canadian plan(s) or enroll in U.S. plan(s)?
How to resolve integration of plan benefits if in U.S. plan(s)?
If salary paid in U.S.A., is participation in U.S. plan mandatory?
Registered or unregistered plans (or in U.S.A., qualified or unqualified
plans)?
Integrate U.S. plan benefits with Canadian plan or "stack"?
Challenge of integration if mix of defined benefit and defined contribution
plans Canada/U.S.A.
Health coverage
Enroll transferee and DEPENDENTS in U.S. health plan?
Role of OHIP?
Life, Accident, Disability insurance
Retain in Canadian plans?
Vacation/holidays
Same as in Canada, or only eligible for U.S. holidays
Social Security
Retain in Canadian social security though reciprocal agreement
Canada/U.S.A.?
Dependent Care
May become more complicated/expensive
Resolve how/where provided
IV. Perquisites
Automobile(s)/allowance
Provide car(s) or allowance?
Watch tax implications and licensing.
Club(s)
Provide club(s) in U.S.A. in addition to Canada?
Financial counseling, tax planning/preparation Critical element for both
employee or company.
Need mastermind Canadian and U.S. company and personal
taxes before, during and after transfer.
Continue/expand service
Develop compensation, benefit, perquisite, relocation arrangements to be as
tax effective as possible consistent with company practices.
May mean creative "structuring".
Other Perquisites
Determine whether other plans can/should continue in Canada or U.S.A.
V. Relocation
Mastermind and coordinate all aspects as detailed in checklist - refer
Appendix 4.
VI. Company Administration
Determine which elements will be handled from internal and/or external
sources; select provider(s).
Recognize administration complexities and factor-in accordingly. No scope
for "amateur" administrators!
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E-mail ©2000 Law Office of Joseph C. Grasmick
Law Office of Joseph C. Grasmick, Business
Immigration
Olympic Towers 300 Pearl Street Suite 200 Buffalo, New
York 14202 USA Tel: 716/842-3100 Fax: 716/842-3105
jgrasmick@grasmick.com
This Internet Web page is
http://www.grasmick.com/hrcheck.htm
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