Worldwide ERC® calls on governments to be agile and attentive to support work from anywhere

As the world changes around you, you must constantly adapt your business practices to keep up and stay ahead, and you need public policies to support what you do. That’s where Worldwide ERC® comes in – advocating with ONE voice for our industry.

So much that impacts global mobility is still up in the air in Washington, DC. Congress is debating a $3.5 trillion budget package that would have far-reaching implications for business. Immigration provisions were ruled out of bounds for this deal, which increases the urgency for Congress to come up with a legislative fix for the DACA program and other immigration-related issues.

Meanwhile, this fiscal year ends on September 30, and we expect employment-based green cards to go unused again. And the new fiscal year that starts on October 1 will kick off another H-1B visa cycle.

Earlier this year, we released our Principles for Public Policy Reform, calling on governments around the world to enact public policies that support work anywhere, especially with the rise in remote work; that are agile to give employers the flexibility they need to get business done in this rapidly changing world; and that are attentive to the needs of employers and workers alike.

We’ve used this anywhere-agile-attentive public policy framework to advocate on your behalf in Washington, DC, and around the globe, joining forces with the Canadian Employee Relocation Council and the European Relocation Association, and partnering with organizations like the International Organization of Employers to make your voice heard on a global scale.

Global Mobility Association Brings on Five New Talents; Newest Foundation Trustees Also Announced

ARLINGTON, Va., September 21, 2021 – Worldwide ERC®, the professional association for workforce mobility and relocation professionals, announced today five new members of its Board of Directors, positioning itself to lead as one industry united in driving economic revitalization around the world. The move comes as the association gathers in-person for the Global Workforce Symposium (GWS) 2021. The must-attend annual event for global mobility and relocation professionals is being held in Chicago, October 19-22, 2021. 

Joining the Worldwide ERC® Board of Directors are Benny Tan, Senior Vice President, APAC Altair Global Relocation; Mark Burchell, Chief Commercial Officer, Sterling Lexicon; Eluned Wallace, Senior Manager, Global Mobility EMEA, The Walt Disney Company; Ashli Aldrich, Global Immigration Manager, Talent Mobility, Netflix; and Simon Mason, Chief Operating Officer & Chief Revenue Officer, Writer Relocations. Each begins a three-year term on January 1, 2022. They will serve with current members: Andrew Walker, Director, Global Mobility and Reward Leader, EY; Tyler Reynolds, President, Equus Software LLC; Anupam Singhal, Senior Vice President, Strategic Partnerships, Topia, Inc.; Michelle Moore, Chief Global Mobility Officer, NEI Global Relocation; Lynn Shotwell, President & CEO, Worldwide ERC®; Horst Gallo, Vice President, HR Talent Solutions & Global Mobility, IBM Corporation; Binwa Sethi, Principal, Threefold Leadership; Kathy Connelly, Senior Vice President, Corporate Services, Berkshire Hathaway HomeServices Georgia Properties. 

“We are thrilled to welcome Benny, Mark, Eluned, Ashli, and Simon to the Worldwide ERC® Board of Directors,” said Worldwide ERC® CEO Lynn Shotwell. “Their diverse professional experiences and unique perspectives will shape the direction of the organization and reflect the collective voice of an industry—marshalling the strength of many as one. I look forward to working alongside them to advance talent mobility in the coming term.” 

Shotwell went on to express gratitude for the leadership of five directors leaving the Board and thanks for their service to the association and the profession: Edward Hannibal, Principal/Partner, Global Employer Services, Deloitte Tax, LLP; Shelby Wolpa, Founder, Shelby Wolpa Consulting; Merritt Anderson, Principal, Merritt+ Consulting, LLC; Sigrid Nauwelaerts, EMEA Talent Mobility Director, Johnson & Johnson; and Eve Seib, CEO, OneSource Relocation, LLC.  

Foundation for Workforce Mobility 

The Worldwide ERC® Foundation for Workforce Mobility is pleased to welcome four new additions to its Board of Trustees. David Bunnell, Vice President of Sales Transportation Worldwide, Inc.; Tim Nowak, Client Leads Director, Coldwell Banker Realty, Robert Brizuela, Strategic Global Mobility Advisor, MNRB, LLC; and Sylvia Salazar, Global Mobility Manager, West Pharmaceutical Services. Each new Trustee will begin a three-year term on January 1, 2022. They will serve with current members: Eve Seib, CEO, OneSource Relocation, Zeke Oaks, Vice President, Alexander's Mobility Services; Bob Portale, President & CEO, ReloDirect, Inc.; Cheryl Bilancia, Global Mobility Program Lead, ON Semiconductor; John Brennan, President, Brennan Title Company; Angel Lozano, Director of Institutional Advancement, TASIS The American School in England; Elizabeth Hotze, Vice President of Sales and Marketing, CWS Corporate Housing; Shannon Brown, Relocation Director, Fazendin Realtors; Stephen McGarry, Director, Global Mobility, WPP. 

Worldwide ERC® has sent public policy papers to the Biden-Harris transition team on key economic and tax relief as well as immigration solutions that will benefit the workforce mobility industry.

As we enter 2021 with a new Biden-Harris administration’s inauguration on January 20, it is imperative to bring the importance of the workforce mobility industry to the forefront of public policy decision-making with President-elect Joe Biden, Vice President-elect Kamala Harris and new members of Congress. To aid in this task, Worldwide ERC® sent public policy papers to the Biden-Harris transition teams on key economic and tax relief and immigration solutions that will benefit the workforce mobility industry.

The Economy and Workforce Mobility

As the U.S. continues to grapple with the COVID-19 pandemic and fully recovering the economy, workforce mobility will play a key role with many employers resuming physical work assignments. Worldwide ERC®’s public policy paper on the economy and workforce mobility addresses the needs that must be met to facilitate assignments, relocations and remote work. Such solutions are crucial in helping the U.S. economy return to its pre-pandemic productivity. Worldwide ERC® recommends that the new Administration and Congress act on the following:

Immigration and Workforce Mobility

Immigration policies play a critical role in workforce mobility, helping employers facilitate relocations or transfer foreign-born workers to complement the American workforce. Doing so makes the workforce even stronger while driving economic growth and creating jobs. However, restrictions over the last several years have made workforce immigration more difficult. Worldwide ERC®’s public policy paper on immigration and workforce mobility argues for solutions that reverse harmful decisions made over the last year and calls for broader legislative reforms to help employers and workers thrive during post-pandemic recovery.

In the near term, Worldwide ERC® recommends that the new Administration and Congress act on the following:

In the longer term, Worldwide ERC® recommends that the new Administration and Congress act on the following:

In a Notice issued March 28, 2019, the U.S. Internal Revenue Service (IRS) provided adjusted foreign housing amounts for 2019 for a long list of locations around the world. (See https://www.irs.gov/pub/irs-drop/n-19-24.pdf.) The annual notice lets taxpayers exclude higher housing amounts in high-cost areas.

Under section 911 of the U.S. tax code, qualifying workers abroad may elect to exclude from U.S. income reimbursements and payments for foreign housing, up to a limit. The limit is computed by first establishing a maximum allowable housing cost, and then subtracting from that a “base housing amount.” For 2019, the maximum housing expense amount is $31,770 and the base housing amount is $16,944. Consequently, absent any adjustment, the largest amount excludable for foreign housing in 2019 is $14,826.

However, the law gives the IRS authority to adjust the maximum housing cost upward for locations in which housing is more expensive. The IRS has done so every year for a number of years and Notice 2019-24 provides the allowable costs for 2019 in dozens of cities and areas around the world. As is usual, a few very high-cost locations stand out: Hong Kong leads the list at $114,300, followed by Moscow at $108,000. Other notable high-cost cities include Tokyo at $93,200, Paris at $71,800, and Milan at $71,500.

As it has also done in prior years, the IRS provides an option to use the 2019 amounts for 2018 if they are higher.

Companies with employees living abroad save money to the extent the employees are able to exclude foreign housing costs from U.S. income. The new list of heightened amounts for 2019 will allow for additional savings, and companies should also examine whether the 2019 amounts are higher than the 2018 amounts in any locations in which they had employees in 2018, and apply the higher amounts, although that might require amended returns for some employees.

The Trump Administration is making changes to the H-1B visa filing process, as well as moving to eliminate the ability of H-4 visa holders to seek employment in the U.S. As a result, we will likely see a shift in the education levels and marital status of foreign nationals filing positions in the U.S.

On December 3, 2018, the Department of Homeland Security (DHS) issued a notice of proposed rulemaking to change the lottery process in which companies file H-1B visa petitions. The U.S. issues 65,000 H-1 visas each year, with another 20,000 to applicants with an advanced degree from a U.S. school of higher education. Presently, the lottery selection applies first to those with higher degrees and then to the larger pool of H-1B petitions.

Under the proposed rule, U.S. Citizenship and Immigration Services (USCIS) would first issue visas for the larger pool of 65,000 applicants before then filling the 20,000 slots for individuals with advanced degrees. According to DHS, the process will result in more individuals being selected with advanced degrees as part of the larger pool. DHS estimates an additional 16% or roughly 10,000 more individuals with advanced degrees will receive H-1B visas each year.

How This Impacts Mobility
Regarding workforce mobility, we will likely see more hiring of individuals with advanced degrees from U.S. institutions who are already in the U.S. than relocating or hiring foreign nationals from abroad.

On February 20, 2019, the Department of Homeland Security sent to the Office of Management and Budget (OMB) a proposed rule which would eliminate the ability of H-4 visa holders, as the spouses of H-1B visa holders, to work in the U.S.

Last fall, California Governor Jerry Brown signed Senate Bill 826 into law, which will require all publicly traded companies whose “principal executive offices are located in California” to have at least one woman on their board of directors by the end of 2019. By the end of 2021, the law states that boards with five directors must have at least two women, and boards comprised of six or more people must include a minimum of three women. Non-compliance with this new law will be expensive, with the first violation costing $100,000 and a second or subsequent violation costing $300,000.

Though Governor Brown noted that this new law may face “fatal” legal challenges, it will still undoubtedly have an impact on the way companies think going forward. California’s Chamber of Commerce and other business groups are already arguing that this new law is unconstitutional, and it will likely face legal challenges.

New Jersey has followed California’s lead and introduced legislation that would also require that women be represented on the boards of companies based in state. Other states have passed non-binding resolutions encouraging board diversity, highlighting that this issue is top of mind for many legislators.

Last fall, a record number of women legislators were elected across the country. For the first time ever, there are over 100 women in the U.S. Congress. Nevada made history last fall by electing the first-ever state legislature where a majority of the lawmakers are women. In the U.S. House of Representatives, Congresswoman Maxine Waters (D-CA) is now the first woman and African American to chair the powerful Financial Services Committee. Chairman Waters has publicly stated that increasing the number of women and minorities on corporate boards will be a priority for the Committee going forward. In fact, Chairman Waters has created a new Subcommittee on Diversity and Inclusion to take the lead on this issue. Under the Democrat-led committee, there are already proposals from Rep. Carolyn Maloney (D-NY) and Rep. Gregory Meeks (D-NY) for increased transparency as to the gender, race, and ethnicity of corporate boards.

The increased focus on more diverse corporate boards is building, and even if California’s new law does not hold up in court, the increase in legislative activity on board diversity will likely make companies closely evaluate their own board of directors, with an eye toward more proactively increasing diversity. Though companies may not be forced to comply with diversity standards by law yet, the increase in public scrutiny may push companies to think differently. Diversifying the composition of corporate boards could increase the number of corporate executives who must relocate and shines a light on the role that gender equality plays in a company’s brand, transparency, career options and opportunities. Diversity and inclusion are increasingly woven into workforce considerations as employers build their talent stream – and they are top-of-mind issues for mobility professionals, too.

The U.S. Department of Labor (DOL) has published its long-awaited proposed rule on overtime pay. Under the proposed rule, the annual salary threshold would increase from $23,660 to $35,308 for white-collar employees who are exempt from receiving overtime pay. For highly compensated employees, the exemption would increase from $100,000 to $147,414. If adopted, the mobility industry would be more impacted by the increase in exemption for highly compensated employees but less by the standard white-collar exemption, as a small portion of transferees earn less than the proposed new threshold of $35,308.

On March 13, 2014, then-President Obama signed a Presidential Memorandum that directed the DOL to revise the rules governing the exemption for white-collar workers from overtime pay.   On November 22, 2016, a federal judge in Texas issued an injunction blocking the U.S. Department of Labor (DOL) from implementing the overtime pay rule.  The DOL, as part of the then-Obama Administration, appealed the ruling to the 5th Circuit Court of Appeals.

On February 22, the DOL under the Trump Administration filed for a 60-day extension in which to file its brief in the case stating the Secretary of the Department was still waiting Senate Confirmation.  The Court granted the request and the DOL had until June 30 to submit its brief. The case is still on appeal, but the DOL has pushed forward with the proposed rule in which stakeholders have 60 days to comment. The final rule is expected to be published by early next year.

Under the Fair Standards Labor Act (FSLA), employers are required to pay a minimum wage as well as overtime pay for over 40 hours worked in a week.  However, the FSLA allows for exemptions to paying overtime to most executive, administrative, professional and other white-collar employees whose salary is over a specified amount. The proposed rule would increase these thresholds.

Please note that the Fair Standards Labor Act applies only to employees working in the U.S. and not to U.S. citizens working in foreign countries.  To access the Office of Personnel Management FLSA: Foreign Exemption Fact Sheet, please go to: https://www.opm.gov/policy-data-oversight/pay-leave/claim-decisions/fair-labor-standards-act/foreignexemption.pdf.  For foreign nationals working in the U.S., there may be other factors that need to be considered related to overtime pay.

A March 7, 2019 report from the Transactional Records Access Clearinghouse (TRAC) at Syracuse University—which has for years tracked IRS audit activity—says that in 2018, audits of major corporations fell below 50% for the first time in the period 2010-2018.  The IRS audited 302 of 633 corporations that reported $20 billion or more in assets.  

The IRS also audited fewer individuals reporting $1 million or more in income: 16,305 out of 504,278.

These results are not surprising, considering the severe cuts in personnel that IRS has experienced since 2010, and the extra work necessitated by the Tax Cuts and Jobs Act (TCJA).  IRS staffing has dropped 22% since 2010, with the number of revenue agents conducting audits falling by 35%.  Although Congress is currently considering legislation to reorganize the IRS, nothing in that legislation would address staffing levels.

According to TRAC, in 2010 the IRS audited 96% of large corporations and asserted $23.7 billion in extra taxes.  The audits of 48% of such corporations in 2018 brought in only $12.5 billion.  Audits of millionaires in 2010 resulted in some $5.1 billion in extra taxes, compared to $1.9 billion in 2018.

Worldwide ERC® members can expect fewer audits of relocation issues such as the taxability to transferees of costs incurred in home sale programs, and treatment of company losses in such programs.

In a March 22, 2019 Notice, the U.S. Internal Revenue Service expanded its previously announced relief for taxpayers who unintentionally underpay their taxes.  https://www.irs.gov/pub/irs-drop/n-19-25.pdf.

Under the tax code, taxpayers are expected to pay taxes due either through withholding or quarterly estimated tax payments.  If the taxes paid through those means turn out to be less than the taxes actually owed, an underpayment penalty is applied.  However, under the law, the penalty is waived if payments through withholding or estimated tax equal at least 90% of the current year tax owed, or 100% of the tax owed for the previous year.

Due to changes in the Tax Cuts and Jobs Act (TCJA) that took effect in 2018, some taxpayers who did not proactively change their withholding were under-withheld and owe additional taxes.  Others made insufficient estimated tax payments because they did not account for changes, such as the new $10,000 limitation on the deduction for state and local taxes.

The IRS had earlier announced that it would reduce the 90% threshold for avoiding penalties to 85%.  Responding to considerable concerns on the part of legislators and others, it has now reduced the threshold to 80%.  The Treasury Department estimates that at least 25% to 30% fewer taxpayers will owe penalties as a result of the relief granted.  

Transferees are among groups of taxpayers more likely than others to have been adversely impacted by the TCJA despite lower tax rates, due to loss of the moving expense deduction and other deduction limitations.  Additional penalty relief for such taxpayers is welcome.

If your idea of a good time is one spent in the beautiful outdoors doing something for a good cause, this year’s Americas Mobility Conference will not disappoint. You will have two opportunities to do just that in Atlanta, supporting the Worldwide ERC® Foundation’s golf tournament and walk.

Fun on the Fairway – and More

Start your AMC experience with nine holes of fun that encompass a lot more than just golf. At each hole along the Heritage Links Golf Course, you’ll find a little fun from participating sponsors – like chair massages, crazy contests, snacks and goodies.  Before heading out for such a highly rigorous competition, you can get powered up with continental breakfast at the clubhouse. Not a golfer? Not a problem. You can still join in the fun with an interactive cooking class tasked with helping the clubhouse chefs prepare an amazing brunch for the group, complete with decorate-your-own Bloody Marys and Mimosas. We’ll hand out prizes, awards and lots of laughs as we celebrate for a good cause.

The foundation golf outing is Wednesday, 8 May 2019. Buses leave the Hyatt Regency at 7 a.m. and will have you back to the hotel in plenty of time for afternoon conference sessions.

Get Your Steps in With Foundation Walk

By the beginning of 2021, U.S. travelers and other travelers to Europe who do not need a visa to visit countries in the Schengen zone will be required to first get approval under the new European Travel Information and Authorization System (ETIAS) or will be denied entry into zone countries.

For workforce mobility, although the impact is expected to be minimal, ETIAS will have more of an effect on business travelers to Europe as opposed to transferees, who are subject to the much more extensive process of obtaining a work visa.

The application process is expected to take about 10 minutes and will require the applicant to provide personal background information, a credit card to pay the fee of 8 euros, and an email address to receive a response. If there are no issues with the application or the background of the applicant, the system is expected to provide approval within a matter of minutes.

There are 60 countries, including the United States, in which citizens do not need a visa to enter countries comprising the Schengen zone and who will be required to receive approval under ETIAS. Schengen zone countries consist of Austria, Belgium, the Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Iceland, Italy, Latvia, Liechtenstein, Lithuania, Luxembourg, Malta, the Netherlands, Norway, Poland, Portugal, Slovakia, Slovenia, Spain, Sweden and Switzerland.

How It Impacts Mobility

On Monday, March 11, 2019, President Donald Trump released his budget proposal for Fiscal Year 2020 which starts on October 1, 2019. The budget is not an actual piece of legislation, but instead serves as an overview of the Trump administration’s policy positions, goals, and priorities.

The House and the Senate will now prepare budget resolutions to help guide spending. Once Congress has a single budget resolution setting discretionary spending levels, the 12 Appropriations Subcommittees in the House and Senate will work to finalize their respective bills to determine specific funding amounts for federal agencies and programs. With Democrats now controlling the House of Representatives, much more compromise will be needed to keep the government funded as of October 1.

Top Budgetary Priorities that Impact Mobility

With control of Congress split between Democrats and Republicans, it is unlikely that any of these budgetary proposals will be passed exactly as written. The next step is for Congress to start drafting individual appropriations bills to keep the government funded in FY2020. Worldwide ERC® will continue to provide updates on this process, providing periodic reports on potential impact to the mobility industry.

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A bipartisan group of U.S. Senators introduced the “Mobile Workforce State Income Tax Simplification Act” in the Senate on March 1, 2019.  The bill, which has more than two dozen co-sponsors from both political parties, is the same as legislation that has passed the House on several occasions but has not been approved by the Senate.  The same legislation is expected to be introduced in the House again this session.

The proposed legislation would hold that a nonresident working in a state must work there for at least 30 days during the year to be taxable in the state.  It would eliminate a problem created by each state imposing its own rules on when and if out-of-state workers become taxable.  Worldwide ERC® continues to support the legislation.

Once introduced in the House, it is expected that the legislation will again move forward.  Last year’s effort accumulated some 61 co-sponsors in the Senate, and easily passed the House.  

However, success is once again uncertain.  The legislation is opposed by the powerful New York delegation in the House and Senate because it would cost New York millions in lost taxes.  Senate Minority Leader Schumer (NY) has until now prevented the legislation from achieving a vote of the full senate.  However, the legislation has the backing of a coalition of large corporations, which will continue to work for its passage.

Worldwide ERC® members currently operate in a confusing environment which requires a state-by-state determination of when taxation and withholding should begin.  The Mobile Workforce Act would resolve that problem in a very favorable way.

The state of Arizona is poised to pass legislation extending the filing deadline for state income tax returns from April 15, 2019, to June 15, 2019.  The bill is S.B. 1481, which passed the state Senate on March 7, 2019 and is awaiting approval of the state House of Representatives.  The governor is expected to sign it.

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The legislation is necessitated by political infighting that has delayed Arizona legislation to advance its conformity date with the federal tax code to incorporate changes made by the Tax Cuts and Jobs Act (TCJA).  Full conformity would generate additional revenue for the state, and there has been disagreement on whether to offset that with a lower state income tax rate. In early February, the governor vetoed a bill that would have fully conformed Arizona law but reduced state tax rates, and subsequent negotiations have not produced an acceptable substitute.

In the meantime, the Arizona Department of Revenue has produced 2018 tax return forms assuming full conformity, but with no change in tax rates, which means that taxpayers who have filed already may have to file amended returns to seek refunds if tax rates change.  Generally, tax practitioners have been advising taxpayers to wait, or to seek extensions.  The new bill would eliminate the need for extensions, assuming the conformity impasse is resolved before June.

Other bills are pending that would conform without changing tax rates, but would decouple the state from some TCJA changes such as eliminating or curtailing some deductions.  Unfortunately, the moving expense deduction/exclusion is not among those which would be preserved.

The result is continuing uncertainty as to whether Arizona will adopt federal changes of importance to the mobility industry.  Currently, moving expense reimbursements/payments remain excludable from Arizona state income, but none of the pending legislation would preserve that treatment.  Consequently, companies that excluded such payments from Arizona income and did not gross up for them may be faced with requests to revisit their gross-up calculations once conformity legislation is enacted.

Following a series of votes this week on Brexit, the United Kingdom (UK) House of Commons ultimately voted last night in support of seeking a delay of the withdrawal of the UK from the European Union (EU). Brexit is scheduled to occur on March 29 but would be pushed back to June 30 under the adopted proposal.

All twenty-seven members of the European Council will need to sign off on approving the delay when they meet on March 21. Prior to the vote, Council President Donald Tusk indicated his support for a delay. However, other EU officials have stated in the past that Brexit should only be delayed to provide time for a vote on a second referendum or a UK special election.

UK Prime Minister Theresa May is now working on both gaining European Council approval for the delay and advocating for Members of Parliament (MPs) to support the proposed Brexit agreement, which will be voted on for a third time by the House of Commons on March 19.  MPs rejected the deal for a second time earlier this week and supported again the somewhat contrary position of the UK not leaving the EU without an agreement.

In addition to the vote yesterday on the delay, the House of Commons rejected several amendments to the proposal for delay. The first amendment would have called for a vote on a second referendum as to whether the UK should indeed leave the EU. The amendment was defeated, with many supporters of the remain movement not voting, as they did not believe the timing politically was optimal for the vote to succeed.

Two other amendments were defeated that would have enabled MPs to debate and craft alternative Brexit agreements to the one negotiated by PM. A final amendment was withdrawn that would have prevented May from bringing the proposed agreement before Parliament for a third vote.