Beyond H-1B—Global Parking and Digital Nomad Paths for US Employers

Grace Shie: Welcome to The Inside Track. My name is Grace Shie and I lead Mayer Brown's Global Mobility Practice. I've hosted a few episodes now on the changing immigration landscape in the United States, particularly with respect to the H-1B visa category and the impact to U.S. employers and their ability to hire H-1B workers. So for today's episode, I thought we'd look at options available outside the United States, options that employers are starting to consider as they engage in contingency planning. And for that discussion, I am joined by my colleague, Maria Maru Ferre from our San Francisco office. Welcome, Maru.

Maria Ferre: Thank you, Grace. Very happy to be here.

Grace Shie: So Maru, for the past month or so here in the United States, we've been studying the impact of the September 19th proclamation that imposes a $100,000 fee on new H-1B petitions. And we've been looking for and receiving some guidance from the administration, from the agencies, to understand the instances when that fee attaches to an H-1B.

Maria Ferre: Indeed, we have been hearing a lot of that in the past months or so, and there many employers here in the United States, be it small, who will not be able to pay that fee. And even if the US government narrows all the instances where the fee will be triggered or applicable, the fee makes it cost prohibit for many, if not most of US employers to participate in the H1B visa program. I'm based here in San Francisco and I know for many startups, companies and small firms, the fee will heavily restrict their ability to access global talent.

Grace Shie: That is the current reality. And yet we know that these same employers may have already identified highly skilled workers who will contribute, in fact, materially contribute to their organizations. Workers who have the knowledge, education, experience, and skills that companies need to make advancements in, you're in San Francisco, so in AI, in digitization. What type of contingency planning are you seeing with those companies?

Maria Ferre: Well, employees will need to be very creative right now and employ as many solutions as possible in order to optimize their short-term but also the long-term recruitment strategies and in order to overcome all the challenges that we have now accessing top talent. And global mobility may be able to provide that potential solutions and we are seeing more and more companies exploring global parking, which is not new and digital nomad pieces.

Grace Shie: So I definitely want us to talk further about those two strategies you've just mentioned. But before we dive into them, let's recognize that today we're talking about overseas options, options outside the United States for employers who otherwise would be hiring in the United States. Can you explain a little bit why employers should consider going global?

Maria Ferre: Well, employing a global strategy is not new, it's not unusual. And we have seen this in the past, particularly global parking, where there have been challenges with the H-1B program. And sometimes there may be times where employers may found a strategic to go global in order to attract and continue to attract the personnel that they have and the skills that they need. There is a global trend as well now. where we know that we live in a world where more people than ever live in a country other than the one in which they have been born. So we know that there is about 300 million international migrants worldwide. So the global trend coupled with some of the challenges that we are seeing hiring the talent that is needed requires the employers, US employers and also global employers to employ other solutions in order to remain competitive. And we are looking at employers developing solid talent recruitment strategies that focus now on global mobility.

Grace Shie: So then let's tackle the two strategies that we'll focus on today. One is global parking that you've mentioned, not something new, but something to be continued to be considered and also remote work or digital work visas. Now these are not necessarily self-defining terms. So I think we should start with explaining what we mean by each. Let's start with global parking. What does that refer to?

Maria Ferre: All right, global parking refers to a global mobility strategy that focuses on managing international personnel who are unable to obtain an immigration benefit in the United States, for example, an H-1B visa, and placing them on a temporary basis with affiliates outside of the United States or even in their country or region. Sometimes what we have seen is employers asking us for options, particularly for Canada or Mexico because of the proximity to the United States.

Grace Shie: So what we're talking about is a new hire or an employee being placed in and hired in a different country other than the United States. Is that right?

Maria Ferre: That's correct. Precisely.

Grace Shie: Okay. So let's tease that out a little bit more. If a country, if a company is interested in a candidate who cannot be employed in the United States because of any number of reasons, but including the unavailability of U.S. visa options, where does a company begin? How should they assess overseas options to make this higher viable?

Maria Ferre: Definitely there are three most common options that have been utilized in this particular area of global parking. The first way to see this is the employer may approach to us and ask us, I have offices in 10 different countries where it's convenient for me to place this individual. My goal is, it could be that the goal is for the individual to return to the United States after one year. So if that's the goal, then we will analyze from an immigration perspective and also the other key considerations where it may be more convenient to place this individual on a temporary basis with an affiliate of the home employer. So that would be strategy number one and assess and advise clients on that. Strategy number two for global parking will be if the company is one that does not have branches or subsidiaries outside the United States or such entities are not able to sponsor for immigration benefits, some companies may utilize the services of an employer of record. In jurisdictions where those strategies are permissible. It's a little controversial, but in some jurisdictions this may be possible. And the third option for global parking, actually we have seen in the past employers doing, even though it's costly, is to make a strong business case for the establishment of a new entity outside, for example, the United States for purposes of placing these individuals on a temporary basis and then file for the intra-company transfer when they return to the United States.

Grace Shie: So it's good to know that even within this global parking option, there are three different pathways, I suppose, paths for companies to pursue, whether they have an existing entity or not. But even as I sit back and listen to your description of the various options, they do seem to require quite a bit of effort on a company's part, especially if they choose option three, which is needing to establish a corporate presence in a new country. So are there less onerous options that are available for employers to consider?

Maria Ferre: Yeah, definitely. After the COVID-19 pandemic, we see more the usage of digital nomad visas or remote work visas. About 38 % of countries have passed legislation on remote work visa options. So now that it becomes a little more...

Grace Shie: common.

Maria Ferre: So what's the definition of digital nomad or worker visa? It's someone who works remotely in a foreign country for an employer outside of his or her host country. For example, we have an employee of the US entity who is working, continue to be working under controlled supervision of the US entity, but working remotely from Spain or from Singapore. The definitions requirements, the visa duration, they all vary from country to country, but there's some common ground.

Grace Shie: So that to me sounds like a pretty attractive option for an employer because I didn't hear you say that the employer needs to establish a corporate presence. So that's taken care of. And so long as the employee is able to conduct the job, to work the job remotely from that overseas location, then that seems to satisfy the main criteria of the digital nomad visa. Is that correct?

Maria Ferre: Yeah, that's correct. The emphasis would be on having proof of remote employment or business ownership. So it's very typical that you are required to present a remote employment agreement. There may be requirements like monthly income, age, health insurance, but those are the most common ones for this visa type.

Grace Shie: So if an employer is considering utilizing the digital nomad option or the remote work visa option for a new hire, what factors should the employer be evaluating? What questions do they need to ask?

Maria Ferre: Most of the time the questions that we see from clients or the most common question from employers are how long are the visas valid for? Typically they can be six months to one year. How much time it takes? What's the cost? How difficult are these visas to be processed? Can these visas be renewed because if they only last six to one year, they may need additional time to spend in the host country. What are the overall causes? A lot of discussions about cause and only immigration cause, but cause related to the move. And can family members join in order to be accompanied by any family members.

Grace Shie: So outside of the immigration requirements and considerations that you just identified, what other legal considerations must employers and companies take into account?

Maria Ferre: Yeah, there are key considerations. The application of local employment laws, social security obligations, benefits and tax regulations. And actually these key considerations will influence the decision more than immigration or the ease of the visa processing for these type of visas.

Grace Shie: So it sounds like a holistic review of that option from multiple different legal angles.

Maria Ferre: Correct, yeah.

Grace Shie: So as we look to wrap up, we're looking at global parking and remote work visa strategies as two potential options for employers who are encountering difficulties or obstacles with new hires in the United States. So it seems to me evaluating these types of global mobility strategies that you've introduced, that's going to be key to an employer maintaining competitiveness in the market for global talent for what we consider to be the best and the brightest.

Maria Ferre: Yeah, that's exactly right. This proactive approach will allow employers to access or continue access to highly skilled workers and to achieve economic growth, innovation, job creation, maintain, you know, be competitive in the marketplace, which is the key.

Grace Shie: Thank you. I'm looking forward to future episodes with you and with our colleagues to do a deep dive into some of these strategies. This wraps up our segment of The Inside Track. We hope you've found value in the discussion today on global mobility strategies. Thank you for joining us.