Sunday, November 1, 2009

South Africa

The importance of Immigration Compliance

By Zahida Ebrahim 
Edward Nathan Sonnenbergs

As a result of the growing international focus on security risks and with most countries enforcing stricter and, often more complicated, immigration policies as a result of the global increase in staff mobility, the issue of legal compliance has become increasingly important.

Although there are some fundamental principles common to most jurisdictions, the law governing immigration can differ substantially from jurisdiction to jurisdiction, making compliance with domestic laws an administrative nightmare for a Human Resources Department without the specialist training required to deal with the complexities of the specific legal system. This results in multinational employers spending copious amounts of money, time and resources on remedying their compliance problems.

To avoid the compliance risks inherent in multi-jurisdictional employment, mitigating compliance risks must be a core focus when planning expatriate employment strategies. Particular emphasis needs to be placed on compliance in areas of tax, exchange control, employment law, payroll regulation and, of course, immigration law, which we focus on here. Ironically though, most information pertaining to immigration compliance can also be applied to other areas of legal compliance.

Aside from the administrative headaches that result from adhering to compliance requirements, the effect of non-compliance can be quite far-reaching with potential consequences of fines, penalties and even criminal sanction for both employer and employee; damage to employer/employee relationships; future migration difficulties; delays in time-sensitive projects as a result of refusal of entry or deportation of expatriate employees; damage to individual and company reputation; and, as a result, loss of productivity and revenue.

The key factors in establishing an effective system of immigration compliance in multi-jurisdictional transfers include identifying areas of compliance risk; implementing specific internal controls to address these risks; and adhering to a codified internal practice which encompasses effective processes, such as creating a basic reporting procedure applicable to all expatriates as well as their accompanying family members; adopting a consistent approach and establishing uniform processes by determining which issues affect an expatriate in any jurisdiction;

  • ensuring HR Managers are trained to determine, enforce and monitor legislative and regulatory compliance;
  • developing policies setting out guidelines for HR managements of different types of assignments in each jurisdiction;
  • ensuring synergy between business units such as HR and Legal Compliance;
  • creating awareness with division/line management of the importance of making HR aware of regular travellers;
  • Implementing measures and securing professional support to keep HR and expatriate employees abreast of changes in laws and regulations;
  • Implementing document checking and formalizing record-keeping procedures in accordance with regulation;
  • And, lastly, monitor the expiry dates of permits.

Another key factor includes Outsource specialist functions. Although fees will be incurred, these will often be less substantial than the costs of non-compliance. It is wise to weigh up the cost of effective external management against internal management costs and even companies who wish to administer the process in-house must at least consider outsourcing complex compliance aspects to professionals who are familiar with potential pitfalls peculiar to the jurisdiction. By outsourcing specialist functions, it ensures accurate and timeous information transfer to professional support and that all facts are relayed in as much detail as possible as even seemingly unimportant facts can have dire consequences;

It is important to secure services from professionals who can assist with all areas of legal compliance as a 'one stop' approach is often less time-consuming and less expensive.

The one common factor in the different jurisdictions is the severe sanctions imposed for non-compliance, whether in the form of fines, penalties, blacklisting or criminal sanctions. This all proves that while compliance can be costly, non-compliance can prove to be extremely expensive!