Employee Stranded Abroad? Navigating U.S. Visa Delays and International Remote Work Risks

Quick Hits

• Employees can face delays in visa issuance at U.S. consulates abroad due to changes in government policy.
• Allowing remote work from a foreign country can create tax, employment, and immigration risks.
• Key options include secondment to an affiliate, a formal remote work agreement, or using an Employer of Record (EOR), each with its own compliance risks.

Key U.S. Legal Considerations

Requesting Earlier Consular Appointments

If a foreign national employee is stranded abroad without a valid visa stamp travel document, the primary goal is to secure a consular appointment to obtain that travel document. For example, the U.S. Department of State recently announced an expansion of screening and vetting for H-1B visa holders, causing embassies and consulates to cancel and reschedule visa appointments to accommodate implementation of the additional vetting process. Visa appointments for some foreign nationals were pushed out for several months after the original scheduled date. Foreign nationals should monitor the visa appointment scheduling site for cancellations and earlier openings. Foreign nationals may also be able to request expedited appointments on a limited basis within the consular section’s discretion. However, in many circumstances, employers and foreign national employees will have to wait for the rescheduled appointment, requiring the employee to remain outside of the United States until after the appointment takes place.

Data Security During Travel

A related issue is the security of company data and equipment. U.S. Customs and Border Protection (CBP) has the authority to search electronic devices upon entry into the United States. Additionally, other countries around the world may present data security and privacy concerns due to government monitoring of the internet and connected electronic devices. To protect confidential or proprietary information, employers may consider: lending “clean” loaner laptops for international travel; prohibiting employees from bringing company equipment to certain embargoed countries; having the employee ship company-owned devices in advance back to the United States, rather than carrying them during international travel; and/or otherwise instituting a targeted data/equipment policy that may mandate immediate reporting to the company’s information security team regarding external searches and/or breaches, including searches by U.S. government authorities.

Risks of Allowing an Employee to Work From Abroad

Allowing an employee to work from a foreign country, even temporarily, can create local compliance risks, especially if the employer has a local entity. Key areas of legal exposure include:

• Corporate and Tax Risks: An employee working abroad can inadvertently create a “permanent establishment” (PE), triggering corporate tax and business registration obligations. The employer may also face income tax withholding violations and issues with foreign exchange controls in the host country.
• Employment and Benefits Risks: The employee may gain protections under local labor laws, which are often more favorable than U.S. laws. Further, U.S. benefits such as 401(k) plans and medical insurance may not be available to, or readily accessible by, employees working outside the United States, and continued participation may generate unexpected tax consequences and create unnecessary administrative complexity for both the employee and the employer, thereby undermining the value of these benefits to both parties.
• Immigration, Intellectual Property, and Data Security Risks: In order to work in the foreign country, the employee may be required to have local work authorization, depending on that country’s laws. If the employee is not a citizen, this could require a work permit for that specific country, which may not be easily available. In addition, intellectual property created abroad may also become subject to foreign laws, and electronic devices and internet activity may be monitored by government officials in certain countries.

Potential Options to Mitigate Risk

In the interim, assuming the employer does not wish to part ways with the employee or pay for nonproductive time, options for mitigating risk include the following:

• Secondment to an Affiliate: One option that balances risk is seconding the employee to a local affiliate. The main downside is the potential for creating a permanent establishment (PE) or an affiliated entity while the employee awaits re-entry into the United States.
• Remote Work Agreement: If the employer is permitting the employee to work remotely in a foreign jurisdiction as a U.S. employee, consider using a written agreement to clarify expectations. While such an agreement may not be fully legally enforceable in the host country, it provides practical value in clarifying the arrangement.
• Employer of Record (EOR): An employer could consider using an EOR as an interim solution to mitigate local country risks, but this may not be administratively feasible for a short-term period.
• Unpaid Leave: Placing an employee on unpaid leave may present financial challenges to the employee, but it would eliminate any foreign jurisdiction risk associated with working in a country outside of the United States.

Ogletree Deakins’ Cross-Border Practice Group and Immigration Practice Group will continue to monitor developments and provide updates on the Cross-Border and Immigration blogs as additional information becomes available.

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