Established in 1979

The Definitive HR Checklist-
Moving Workers from Canada to the U.S.A.

1. Introduction to this Web Page
2. Introduction: Canada to U.S. Transfers
3. Orchestrating the Move
4. Short Human Resources Checklist
5. Detailed Checklist: All Human Resource Issues

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1. Introduction to this Web Page

Even with NAFTA, human resource managers face a multitude of unique issues when transferring employees from Canada to the U.S. This page provides three massive checklists containing all of these issues.

The Law Office of Joseph C. Grasmick is prepared to assist HR managers with U.S. immigration permits. Nevertheless there are other related employment issues to handle. Although we do not represent clients in these areas, we share this information with our readers.

For a list of other professionals who can handle items on these checklists see Joseph Grasmick's Rolodex® or the U.S. Trade Directory. For help locating the right experts, we invite you to seek our recommendation. For detailed information on HR U.S. immigration issues, see the links on the home page.

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2. Introduction: Canada to U.S. Transfers

Irrespective of whether the transfer to the U.S.A. is short term or permanent, the issues are often complex --- and solutions not quick or easy.

Having said that, this page shows you how you can plan to make transfers effective, cost-efficient and with least hassle to you (the employer), and for the transferee.

As in any major project, good planning --- in advance --- is the key.

Similarities and Differences

Canada and the U.S.A. are neighbors and normally good ones - except if we are talking about a special tariff on shingles or beer, or a Stanley Cup series between the Maple Leafs and the Pittsburgh Penguins!

We share a common border, love of the outdoors, BBQ's, common language (well, almost), currency called a dollar, and both countries have education and personal taxes!

You will see that in these similarities, the differences are already emerging --- and major ones at that!

The dollar relationship tends to be up and down like a a yo-yo --- although for the last few years the yo-yo doesn't seem to have had much elasticity and has resulted in the Canadian dollar usually sinking --- from 87 cents (U.S.), to 70 cents, before recently creeping up from the floor to 73 cents (U.S.)

This raises a major issue in determining how and where the transferee should be paid. Other compensation and benefit elements which must be addressed include:

• health (and dependent) care coverage;
• life, disability, and other insurances;
• pension, saving plan participation.

Likewise, decisions are also required on important life-style elements such as:

• schooling for children;
• spousal employment;
• accommodation (in both countries);
• cultural, church, sport, clubs and other leisure activities.

Having got your attention - and perhaps raised your concern as to how to cope with all these issues and elements, now, let's try to put these matters into a logical, cohesive plan.

Masterminding The Move-Major Functions

We've already said good planning is the key.

Whether you decide to handle the move inside your company, or to outsource and use a third party provider, someone must mastermind the move and have overall responsibility for its implementation (we avoided the word "execution" as that might be what happens if the move is not well planned!)

As the quarterback orchestrates strategy for the football team, so the quarterback in cross border transfers, orchestrates and masterminds the totality of the move --- of course working in concert with you, the employer.

In the past, most of the transfers were initiated by large Canadian companies who usually had their in-house HR Department to plan and coordinate such moves.

Now this seems to be changing in a number of ways:

• Small and medium size companies have been forced to enter the international arena to survive and prosper - particularly with the Free Trade Agreement;
• Large companies have continued to decentralize and downsize; their in-house HR capabilities have consequently dwindled, been fragmented or dismantled --- or in smaller companies, simply did not exist.
• Outsourcing to third party providers seems to be the "in-thing."

It is critical that the third party provider has excellent access to the key executive/manager of the Canadian company. Even with telephones, faxes, E-mail, etc., there is no substitute for periodic face to face meetings, often required at short notice. Such services located in Buffalo, "The Gateway or Bridge to the U.S.A.," are therefore strategically placed to best handle transfers --- with quick travel to southern Ontario or Toronto within an hour (peak traffic downtown excepted!). While knowledge and experience of U.S. Immigration and employment arrangements are essential requirements to handle transfers, so is a thorough appreciation of similar arrangements in Canada. Having personally worked and lived in Toronto for 10 years until transfer to the U.S.A. four years ago provides this background; as does having orchestrated the move of a large corporate office from Canada to the U.S.A. at that time.

Whether the quarterback is someone in your company, or a third party provider, the role is very similar.

This role is indispensable and should be one person within the company - or a company representative, plus one person in the third party provider.

This approach (the quarterback appointment) is the most important step in the whole process towards ensuring that the transferee has a "smooth move" with:

• a known, individual person to refer to for all aspects, particularly problems;
• assurance of all elements being coordinated in a timely manner;
• and in Canadian Institute terms, a transfer that is accomplished "quickly and painlessly." Note: They may have used a little "poetic license" here!

Career

You will normally only be transferring your best employees in their respective areas of skill whether they be executives, managers or professionals. They must be able to expect equal "best" treatment from you (the employer) otherwise you will risk losing these key people. This starts with career planning---which some say is obsolete in the world as it is today --- but don't you believe that. Be open and honest with the transferee.

Give specific details of the terms of the transfer, if possible, or as a minimum, guidance as to the approximate period, plus tasks/objectives to be completed prior to return to Canada. Identification of the likely next career appointment likewise is of paramount importance to the transferee. This may not always be clear, but some form of undertaking is key to a successful move.

Masterminding The Move-The Detail

After a decision has been made as to the length/type of transfer we are then in a position to start designing all the transfer elements.

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3. Orchestrating the Move

Quarterback-Masterminds the Whole Move

• DETERMINE INTERNAL/EXTERNAL RESPONSIBILITIES FOR ALL ASPECTS OF TRANSFER
• APPOINT FIRMS FOR OTHER ELEMENTS
• COORDINATE ALL ELEMENTS WITH COMPANY AND TRANSFEREE
• COUNSEL AND ADVICE TO EMPLOYER
• MONITOR PERFORMANCE OF THIRD PARTY PROVIDERS

Immigration Expert

• IMMIGRATION VISAS
• HANDLE ALL U.S. EMPLOYMENT/RESIDENT ISSUES FOR TRANSFEREE & FAMILY/DEPENDENTS

Compensation and Benefit Design

DEVELOP TERMS & CONDITIONS RELATED TO TRANSFER INCLUDING:

• COMPENSATION
• PENSION & BENEFITS
• PERQUISITES
• RELOCATION PROVISIONS

Relocation

ASSISTANCE WITH:

• MOVING HOUSEHOLD GOODS AND AUTOMOBILE
• HOUSING (CANADA & U.S.A.)
• SCHOOLING
• EMPLOYMENT FOR SPOUSE/CHILDREN
• LIFESTYLE SELECTION (EG. CLUBS, CHURCHES, SPORTS, ETC.)

Tax and Financial Counseling

• CANADIAN & U.S.A. TAXES (PERSONAL & COMPANY)
• ADVICE ON "RESIDENCE" ALTERNATIVES FOR TAX PURPOSES
• COUNSELING RE: ESTATE PLANNING (PREPARATION OF NEW WILL, IF REQUIRED).
• INSURANCE & INVESTMENT ADVICE

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4. Short Human Resources Checklist

Reasons For Assignment

Category of assignment can make significant differences to elements in transfer arrangements and their size/level!

• Executive management
  • President, C.E.O., senior executive of U.S. company
  • Start-up, joint venture, acquisition
• Management development
  • Broaden experience for future career promotion
• Technical support/knowledge
  • Support or install technical/professional programs; train local employees.

Assignment Term

Different elements and/or practices applicable to each term

• Short term
  • 3 to 6 months
• Extended term
  • 6 to 12 months
• Expatriate term
  • 1 to 3 years
• International transfer (permanent).

Career Planning

• Next appointment/re-entry plan
• Working spouse

Compensation

• Base salary
• Annual (bonus) incentive
• Long term incentive
• Housing and/or cost of living allowance
• Retained housing allowance
• Mobility premium
• Tax equalization

Benefits

• Pension and Savings Plans
• Deferred compensation
• Health, life, disability insurance
• Flexible Spending Account
• Vacation/holidays
• Dependent care
• Social Security

Perquisites

• Automobile/allowance
• Club(s)
• Financial counseling, tax planning/preparation
• Annual medical examination
• Fitness facility/health club
• Computers/fax
• Home security
• Car telephone

Taxation

• Canada
• U.S.A.
• Dual tax treaty
• Residency
• Tax equalization/adjustment

Relocation

• Look-see visits
• Accommodation
  • Canada/U.S.A.
  • Retain house; rent/sell/leave vacant
  • Buy/rent in U.S.A.
• Transportation personal/household effects
  • Method/cost
  • Storage
• Legal and realtor fees
• Incidental expenses/allowance
• Dependent care
• Education
  • Canada/U.S.A.
• Working spouse (See the FAQ re: immigration for working spouses
• Government documentation---Work/residence approvals
• Home leave/compassionate leave/travel, etc.

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5. Detailed Checklist: All Human Resource Issues

I. Personal and Career Lifestyles

• Career
  • Reason for transfer and term?
  • Where next? Give assurances; must have plan.
  • Monitor performance
• Communications
  • Develop on-going communications program; keep in touch!
• Family
  • Working spouse? See the FAQ-Frequently Asked Questions information about immigration for working spouses.
  • Children education?
  • Dependent care responsibilities?
• Housing
  • Rent, sell or leave vacant
  • Type of accommodation in U.S.A., rent/buy?
• Lifestyle
  • Decisions in Canada and U.S.A. regarding clubs, sport, committees, church, cultural, clubs and other leisure activities.
• Security
  • Increased job/career concern?
  • Personal security concerns?

II. Compensation

• Cash compensation
• • How much pay? U.S. or Canadian dollar basis?
  • How/where paid? U.S. and/or Canada?
  • Recognize higher costs - housing/cost of living?
• Base salary
  • Same or higher (to recognize additional responsibilities)?
  • Related to competitive salaries in U.S.A. or Canada?
• Annual bonus
  • Based on Cdn. or U.S. company plan (or split)?
  • Which salary basis - U.S. or Cdn. company?
• Long term incentive
  • Eligible same as in Canada, or
  • More/less grants (or special grant as part of transfer arrangements)?
• Mobility premium
  • To motivate to transfer? How much?
  • Recognize disruption, etc?
• Housing allowance or loan
  • Recognize higher cost of living?
• Cost of living allowance/differential
  • Recognize higher cost of living?
• Retained housing allowance
  • Incentive to retain home in Canada.
  • Contributions to mortgage, maintenance, utilities, etc;
  • In lieu sell/repurchase.
• Education
  • Pay for boarding school (or additional living expenses) for children remaining in Canada, or higher fees in U.S.A.
• Tax equalization
  • Need determine company practice; reimburse all additional personal taxes?
  • Very careful tax planning essential to:
    • avoid excess taxes
    • take advantage of dual tax treaty Canada/U.S.A.
    • determine "residency" for tax purposes
    • Currency exchange
      • If some/all compensation paid in Canadian dollars, adjust amount for rate changes?

III. Pensions and Benefits

• Pension plans
  • Retain in Canadian plan(s) or enroll in U.S. plan(s)?
  • How to resolve integration of plan benefits if in U.S. plan(s)?
  • If salary paid in U.S.A., is participation in U.S. plan mandatory?
  • Registered or unregistered plans (or in U.S.A., qualified or unqualified plans)?
  • Integrate U.S. plan benefits with Canadian plan or "stack"?
  • Challenge of integration if mix of defined benefit and defined contribution plans Canada/U.S.A.
• Health coverage
  • Enroll transferee and DEPENDENTS in U.S. health plan?
  • Role of OHIP?
• Life, Accident, Disability insurance
  • Retain in Canadian plans?
• Vacation/holidays
  • Same as in Canada, or only eligible for U.S. holidays
• Social Security
  • Retain in Canadian social security though reciprocal agreement Canada/U.S.A.?
• Dependent Care
  • May become more complicated/expensive
  • Resolve how/where provided

IV. Perquisites

• Automobile(s)/allowance
  • Provide car(s) or allowance?
  • Watch tax implications and licensing.
• Club(s)
  • Provide club(s) in U.S.A. in addition to Canada?
• Financial counseling, tax planning/preparation Critical element for both employee or company.
  • Need mastermind Canadian and U.S. company and personal taxes before, during and after transfer.
  • Continue/expand service
  • Develop compensation, benefit, perquisite, relocation arrangements to be as tax effective as possible consistent with company practices.
  • May mean creative "structuring".
• Other Perquisites
  • Determine whether other plans can/should continue in Canada or U.S.A.

V. Relocation

• Mastermind and coordinate all aspects as detailed in checklist - refer Appendix 4.

VI. Company Administration

• Determine which elements will be handled from internal and/or external sources; select provider(s).
• Recognize administration complexities and factor-in accordingly. No scope for "amateur" administrators!

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