Key relocation Risks

Key relocation Risks

Evolutionary change is currently taking place in Human resources and the Global Mobility/Relocation industry.  We are all having to adjust to the ever-changing needs affecting mobile talent.  Managing risk, which has always been a critical component of the process, is a multi-faceted challenge as it pertains to relocation and global mobility. Even in these difficult economic times, companies continue to relocate employees and support global assignments.  

If these key areas are not handled correctly, a great deal of damage can be done to the business, personnel, and the financial impact could be felt for years to come.  Issues can cause business disruptions as well as reputational damage.  With tax and legal authorities’ operating systems becoming more sophisticated every day, companies should evaluate each situation to ensure the relocation or assignment will meet the various areas of compliance.

Key mobility risks apply for domestic US relocations as well as international assignments and cross-border relocations, but they do vary by the type of move.  Key mobility risks are:

  • Tax
      • Corporate tax implications of relocating employees to a new work location
      • Impact of relocation to residency status, state / local tax filing, and withholding requirements
      • Physical presence risk of creating a PE (Permanent Establishment)
      • Relocation benefits being administered in a tax compliant manner
      • Increased risk of audit
  • Legal
      • Inbound or Outbound US immigration status, effective dates, and work location restrictions
      • Failure of proper registrations, work permits, etc.
      • Risk of losing licenses, fines, penalties, and possible deportation
  • Social Security
    • Totalization agreements and risk for non-compliance
    • Certificates of coverage, critical for assignments
    • Employee tracking for reporting and renewals
  • Data Security and Reporting
    • Critical data integrity, housed in a compliant and secure manner

It’s important to choose the right operating model and be confident it considers the risks for Corporate tax and Payroll tax, Permanent Establishment, Employment law, Immigration, domestic and international Human Resources, Talent Acquisition and Talent Management needs.  InterLink provides our clients with an integrated approach to help our clients assess risk and administer a compliant mobility program. 

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Our company was faced with changing relocation vendors due to the poor customer service level. When reviewing Interlink’s proposal and touring their site, I was impressed. However, I still had concerns about their size as it relates to managing national and global projects. Erroneously, I thought a relocation company had to be a well-known, to handle national and expatriation relocations. After two years into our contract, Interlink’s performance has exceeded my expectation. • Their service is cost competitive • Their customer service levels are highly responsive • They provide recommendations and guidance based on market trends • They customized relocation plans to meet our business strategies • Most importantly, they handle the entire relocation process in a seamless fashion.
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