An “extended business traveller” (EBT) generally is defined as an employee who travels internationally on business on a temporary basis for a minimum of 10 consecutive days at any one time during a one-year period to a given country.

Typically, business line management determines the need for employee travel and expenditure for business trips. In many organisations, no distinction exists between the travel process and oversight of an employee traveling to a location for a week or a month.

Given that travel expenditures are being processed and initially tracked by the company’s corporate travel department or preferred provider, they are key stakeholders in the identification of EBTs.

The travel function may use a web based platform, company intranet, or alternate technology for bookings that may or may not be integrated into the company’s data warehouse.

Why should this be a concern?

Each country has its own governing immigration and tax laws. The number of days an EBT is physically present in a given country, the nature of the work he or she may be performing, and other criteria (such as the employee’s employing entity, payroll location, stock option exercise, etc.) may result in unintended tax and immigration compliance risks for the employer.

This lack of compliance reporting may translate into immigration delays or denial, employee deportation or legal prosecution, increased costs, audits, and overall, a negative company reputation.

Consistent infractions can even jeopardize a company’s ability to operate and conduct business in a country. From immigration caps to financial reform legislation, it can be challenging for companies to both navigate and remain up-to-date on critical operating procedures and further assess the effects on global mobility.

With government funds running low, typical responses can be felt globally from protectionism of one’s work force, seizing the opportunity to levy taxes on capital flow, and benefits scheme changes to a more vigorous adherence of laws already in place.

Organisationally, we can all sense the intense scrutiny on costs at all levels in this economic climate. Budget limitations notwithstanding, surprise expenditures such as lingering tax liabilities are unwelcome.

The distraction of playing catch-up with internal ownership and allocation of these unanticipated consequences of EBTs is frustrating at best. The following is an account of how one organisation confronted this risky landscape and found a new administrative design to address compliance and awareness.

Theory in Practice

A multinational organisation we have assisted serviced their global mobility program via a regional service delivery model. They have a large population of EBTs globally and this mobility type was managed by the global mobility function.

The reporting and management of their EBTs was inconsistent across regions. Because of these concerns, the company initiated a strategy to create awareness across various levels and functions of the organisation through education; to proactively identify EBTs prior to the commencement of travel and develop standardised tracking tools to ensure consistency throughout its support structure.

To achieve these goals, the company first explored the current state of procedures relative to candidate identification and decision-making criteria. This was a cross-functional exercise with the commitment of global mobility, tax, and corporate travel.

A dedicated EBT mobility policy and assignment letter were created, distinguishing this population from a typical business traveller or a short-term assignee (this policy distinction created instant awareness across the HR community). Policy benefits included mandatory tax briefings and immigration coordination.

The company also centralised the operations team dedicated to EBTs, resulting in greater consistency with reporting and tracking. Tools such as process flows, scripts, and reporting were developed to facilitate the workflow.

From a technology perspective, the company’s intranet was leveraged to push out information and share resources. The human resource information system (HRIS) was not originally designed to accommodate EBTs, causing resistance by users and the use of manual processes to supplement data collection.

The base of the tracking and reporting data warehouse became the travel department’s software, which then was incorporated into a plan for a more fully integrated technology platform feeding in data from the accounts payable and HRIS systems.

Continuous informational training sessions with HR and business managers proved most effective and led to sustainable results. Cross functional participation required involvement from senior management and an understanding of the repercussions of non-compliance.

A shift in perspective took place, now viewing these recurring business trips as a function of employee mobility. Disciplinary action was taken to address repeat offenders with senior management.

Steps for an Effective Application

This company took several steps that highlight some representative best practices in the successful management of EBTs. The following recommendations identify the anchors of a well-integrated program:

Step One: Policy Development

Defining eligibility criteria for extended business trips within one’s organisational context and suite of mobility plans and tiers will aid in clear delineation of this population.

A dedicated policy and EBT memo (outlining the terms and conditions) help facilitate consistent and equitable treatment and support of employees while also framing the employee’s responsibilities in the process.

The oversight and ownership of EBTs are most successfully placed within the global mobility space given the existing architecture of compliance, tools, service delivery resources and technical expertise.

Typical policy provisions and guidelines include temporary accommodation, per diem or T&E reimbursement in alignment with the global travel policy, tax consultation and return preparation (as required), immigration procurement, excess baggage and airfare.

Step Two: The Power of Technology

Technology drives business forward by leveraging efficiencies. The integration of systems allows for regional data to be synthesised globally and ultimately safeguard compliance.

Technology affords mobility teams the ability to manage workflow, track activity and share data with their external suppliers. Limiting the interface to pertinent key EBT identifiers, along with the additional supporting information required to deliver the program, reduces the extensive time and cost of standard technology constructs.

Typical relevant data include: employee name, employee ID, employee contact details, home location, host location, business division, cost centre, business manager, start date, end date and the number of days in the host location for each trip.

Suppliers, who may have existing access to the client’s HRIS system via a web portal, can extract the necessary information in real time and proactively service the EBT population.

For those clients who do not have the internal technology, similar results can be obtained via assessment tools offered from various suppliers that provide both country specific compliance regulations and cost projections to be used for budgetary purposes.

Maintenance of those assessments for current application requires due diligence but can prove highly effective in addressing the exposure associated with EBT activity.

Step Three: Cross-functional Involvement

The engagement of multiple departments within the organisation highlights the grasp that mobility and this particular mobility type—EBTs— truly have. From tax and treasury to travel and legal, the effects of EBTs are far-reaching, thus a solution should best be crafted synergistically.

Securing buy-in within an organisation can assist in forging a new path to proactive management of these employees on extended business travel. This strong partnership aids in the implementation of new procedures and workflow that could be met with resistance or at a minimum, irritation, if the rationale is not successfully conveyed.

Step Four: Communication and Education

Launching an internal awareness campaign to highlight the compliance risks and exposure EBTs can pose to the organisation can be an effective call to action.

Educating HR business partners and line management alike, an organisation can be well on the way to greater investment in the EBT process and administration. Supplemental manager and administrator guides can support continued learning and new team member on boarding. Communications can be reviewed on a quarterly basis to maintain focus and relevance.

Step Five: On-going Governance

The maintenance of data integrity is vital. Country regulations or modifications to corporate governance rulings are ever-changing. Communicating these regulatory updates to stakeholders ensures that compliance terms are being met.

Similar to other mobility programs, the EBT policy and accompanying administrative tools should be audited frequently, as the maintenance of this educational material is fundamental in the successful management of EBTs.

Extracting and disseminating valuable reporting from an organisation’s mobility system of record can be beneficial to keep a close eye on the movement of its mobile population. In tandem with tracking tools, the establishment of prescribed escalation protocols can be implemented to send off “alarms” to key stakeholders and decision-makers prior to an EBT approaching a critical tax threshold.

The organisation then is empowered to make an informed decision rather than pick up the pieces after an unwitting commitment.

Bringing It All Together

The subject of extended business travellers and their related compliance risks for organisations continues to be a hot topic of discussion in the mobility community. It is true that the hazards are plentiful; however, the various measures discussed above can be implemented to tighten procedures, enhance visibility and deploy mobility administration with greater confidence and ease.

By Peter Sewell, Regional Director, Crown World Mobility.