Preventing Noncompliance in Global Mobility
Global mobility programs of multinational companies are subject to numerous regulations and laws, not only at home, but in foreign locations. Among the latter are rules surrounding immigration, employment, and taxation of workers. These can be some of the most challenging noncompliance aspects of global mobility.
Most companies understand the need to adhere to local regulations when entering a foreign market and will not intentionally violate these regulations. However, due to the complexity of each country’s laws and regulations, there may be instances where compliance becomes difficult.
Failure to research local laws or seek professional assistance can quickly thwart a company’s global expansion plans. A lack of knowledge or understanding of a jurisdiction’s laws will not be sufficient to insulate companies from the consequences of violating regulation.
This article offers an overview of each area of potential noncompliance, examples of specific violations, and possible methods for remediating noncompliant scenarios.
With regard to global mobility and expansion, noncompliance is any instance in which a foreign company, subsidiary, or worker is in violation of rules that govern employment and business activity in a host country.
These rules can be divided into three primary areas:
In each of these areas, there is a specific authority within the host country that monitors compliance. Should a violation be identified, the consequences can be significant, and may include fines, blacklisting, penalties, criminal charges, imprisonment, and/or future restrictions on business activity. Violations can also invite ongoing scrutiny from authorities and tarnish a company’s reputation.
Common Noncompliance Issues
Below are examples of common noncompliance issues HR teams should be aware of in each of the three categories noted above. Although there are potentially many more areas of noncompliance, the following serves as a starting point for mitigation and prevention strategies.Download