Impact of immigration law on business travel and duty of care

By Constanza Mundt, J.D., and Sabine Paul, LL.M.

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In an ever-changing international work environment, employers are regularly required to send employees abroad on short notice to meet urgent client needs. Unfortunately in this fast-paced environment, both the employer and the employee are usually unaware of the manifold consequences these operations abroad may have. These may range from social-security and tax implications for the individual employee to safety risks related to the region of the assignment. Possible employer duties of care in these areas have already been reviewed in other articles. However, one aspect that seems to have not yet been investigated in detail is the impact of violating immigration law not just from an immigration-law perspective, but rather as it relates to duty of care under German labor law.

Possible employer liability for noncompliant travel under German labor law
To prove a potential claim for damages, an employee must show that the employer violated a duty or legal obligation and thus caused the damage. Causation only requires that the damage was reasonably foreseeable (BAG, Schadensersatzanspruch bei Selbstmord des Arbeitnehmers, NZA 2009, 38).
German labor law requires employers to perform their duty of care toward their employees and protect them from possible harm to their rights and safety. It is derived from section 241, subsection 2, of the German Civil Code. It requires both the employer and the employee to respect each other and support each other’s interests. This specifically requires the protection of bodily integrity, financial interests and personality.
The underlying idea is also codified in section 618 of the German Civil Code. For an employer, the obligation is codified as the requirement to ensure a safe workplace. This pertains, for example, to work rooms and the general work environment. The law also creates the possibility for the employer to be liable for damages under German tort law. This means the employer should take precautions to protect the employee from being negatively impacted by his or her employment. When the law was passed, the German Parliament was aware that this employer obligation could not be unlimited, and the employer should be allowed to take a reasonable risk (BT-Drs. 13/3540 page 16, Erfurter Kommentar zum Arbeitsrecht, article 618 Randnummer. 14 [19th Auflage, 2019]). The graver a possible damage to the employee, however, the more precautions an employer must take to avoid the damage.
One of the key duties of an employer under the duty of care is the duty to inform (Schliemann, Fürsorgepflicht und Haftung des Arbeitgebers beim Einsatz von Arbeitnehmern im Ausland, BB 2001, 1305). This requires the employer to inform the employee of an assignment and of facts surrounding the assignment, such as local laws, dangers and risks abroad. This specifically relates to potentially applicable local laws (Schliemann, Fürsorgepflicht und Haftung des Arbeitgebers beim Einsatz von Arbeitnehmern im Ausland, BB 2001, 1305). Failing to do so would be in violation of the employer’s duty, and this duty exists in addition to the legal obligations the employer has under immigration law. The resulting damage would also be deemed foreseeable, as it is not outside the realm of normal experience for an employee to be barred from entry into a country after entering under the wrong immigration-law category.
If an employee travels to a foreign country without the correct visa, he or she may be harmed by the loss of a visa waiver privilege or a general right to enter the country for work purposes. In the US, for example, an employee will no longer be eligible for the privilege of using ESTA in most cases if he or she is found to be working illegally. As a result, even private travel as a tourist would be no longer allowed without a visa.
Employees are always required to obtain a visa for travel to the US, regardless of the purpose for the travel. In terms of monetary value, this entails a minimum cost of $160 for a visa valid for a maximum of 10 years. As such, the financial interests of the employee would be impacted by the employer’s noncompliance. In addition, the nonmonetary damage resulting from losing the right to travel freely must be considered.

Defining “business travel” and “work”
Taking the information above into account, this article will introduce readers to the most common immigration-law-related mistake: failing to properly differentiate between business travel, which in most countries does not require prior approval by the immigration authorities, and work. Most employers are aware that, from an immigration-law perspective, employing an individual without the right paperwork will lead to sanctions — possibly even criminal sanctions. But when thinking of “work,” most employers think of direct employment relationships with employees and long-term work abroad.
Unlike the colloquial use of the term “work,” under immigration law work is defined more narrowly and, in most countries, refers to any activity that is productive and part of an employee’s core tasks in the home country. As an example, we would like to highlight the difference between “work” and “business activity” under US immigration law. The classic reference case is the Matter of Hira (Matter of Hira, 11 I. & N., Dec. 824 [BIA 1965]). In this case, a tailor traveled to the US to take orders and measurements for his employer in Hong Kong, who then used this information to tailor custom suits for US customers abroad. This case classified the tailor’s mere gathering of information as a business activity, as the principal place of business and the actual place of predominant profit was in a foreign country. Had the tailoring itself been performed in the US — even for a few days — this would have been deemed “work.”
Another example that reveals the fine line between “business” and “work” activities involves the role of a chief executive officer. Typical tasks would be categorized as follows:

Permissible business activities

  • Review of local US work on-site for the benefit of the employing entity abroad
  • Participation in meetings with local employees to receive status updates for the purpose of reporting to the employing entity abroad
  • Receipt of reports from US management for further use by the employing entity abroad (information gathering) — final results and conclusions from these reports may only be drafted abroad

Work activities

  • Signing of contracts for the US entity in the US
  • Delegation of work and instructing employees of the US entity (using the right to issue directions)
  • Participation in regular management activities of the US entity, such as planning budgets or creating market strategies

Similar rules apply for business travelers coming to Germany. For example, German immigration law states in section 16 of the German Beschäftigungsverordnung (BeschV) that a business traveler is an employee who either works for:

  • an employer in Germany in sales abroad;
  • an employer abroad and comes to Germany to participate in negotiations, make contract offers, enter into contracts or supervise the provision of contracts; or
  • an employer abroad and comes to Germany to establish, supervise, or direct the German part of a company

for less than 90 days within a 180-day period and maintains his or her regular place of residence outside of Germany (section 16 of the BeschV; other activities that would not qualify as work according to certain criteria can be found in section 30 of the BeschV).
Given the above, it’s possible to conclude that more often than not, an activity will not qualify as business travel but rather as work abroad and will require appropriate permission as outlined in the relevant immigration laws.
What this means for employers
To fulfill their duty to inform employees regarding immigration laws, it is sufficient for employers to provide informational materials and relevant contact details related to the applicable norms in the host country, such as information from the embassy or consulate regarding visa requirements (Edenfeld, Die Fürsorgepflicht des Arbeitgebers bei Auslandseinsätzen, NZA 2009, 942). It must be noted that the information and support employers provide also create a liability for them (Schliemann, Fürsorgepflicht und Haftung des Arbeitgebers beim Einsatz von Arbeitnehmern im Ausland, BB 2001, 1307). However, this liability may exist regardless of whether they comply with the duty to inform. As a result, it is recommended for an employer to provide some form of information to their employees prior to commencing business travel. It is important that the risks, such as the potential loss of the visa waiver privilege, are clearly outlined for the employee. Some companies provide internet portals with country information sheets to their employees; other employers use pre-assessment tools that automatically analyze relevant information to alert employees of applicable visa requirements.
Such measures can be sufficient, as the employee is also required to assist the employer and provide input to fulfill his or her legal obligations under contract law (Schliemann, Fürsorgepflicht und Haftung des Arbeitgebers beim Einsatz von Arbeitnehmern im Ausland, BB 2001, 1306).
Potential damages can therefore be minimized by providing employees the opportunity to complete the necessary steps on their own. An employee may request that his or her employer bear the cost of the required steps under immigration law, such as visa fees or fees for a legal counsel to assist with the matter (Edenfeld, Die Fürsorgepflicht des Arbeitgebers bei Auslandseinsätzen, NZA 2009, 938.). It is advisable to select a legal counsel and to enter into a framework agreement with him or her in order to reduce compliance-related costs. When informing an employee about possible immigration-related requirements, the legal counsel may be listed on the corporate website as a contact person.
Implementing these measures carries the added benefit that, should a possible violation of immigration law be detected by immigration enforcement, an employer can prove he or she had made an effort in good faith to ensure compliance with immigration law within his or her company.

Conclusion
Compliance with immigration law has previously not been a major focal point of labor law. Recently, however, the importance of recognizing the possible legal consequences of not complying with the duty to inform has been gaining. Because the sanctions under immigration law are already severe, employers should avoid exposing themselves to potential litigation from a labor law perspective. Simple steps enable employers to reduce the risk of litigation.

cmundt@kpmg-law.com

spaul@kpmg-law.com

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