Canada: Are All Employees Who Enter The U.S. On Business "Business Visitors"?

It is not uncommon for Canadian employers to send their employees to the U.S. for business reasons. When they do so, employers should be mindful of the difference between business and work travel. Depending on the purpose for travel, an individual may enter the U.S. as a Business Visitor, or they may need to apply for a work authorization.

The following information aims to assist employers whose employees frequently travel to the U.S. for either work or business-related reasons.

What is a Business Visitor?

An individual entering the U.S. may enter as a "B-1" business visitor for "business travel" on behalf of their Canadian business or Canadian employer to 1) attend a business meeting; 2) negotiate the terms of a contract; 3) attend a conference or trade show; 4) participate in short term training; and in some cases, 5) provide after-sales services in connection with a sale of a product. Each of these activities constitutes legitimate reasons for business travel to the U.S.

Based on the foregoing, any other employment-related reason for which an individual has to travel to the U.S. will be deemed as "work" and consequently, the individual will have to apply for work authorization prior to entering the U.S.

Employees trying to enter the US as a business visitors must demonstrate the following :

  1. Their intent is to remain in the U.S. for a specific and limited period of time;
  2. They have a residence outside the United States which they have no intention of abandoning, as well as other binding ties which will ensure their return abroad at the end of the visit;
  3. They will engage in permissible business activities in the U.S.;
  4. They have funds to cover the expenses of the trip and their stay in the United States; and
  5. They are otherwise admissible to the United States.

Can a Canadian provide any Services to a U.S. entity as a Business Visitor?

Under the North American Free Trade Agreement ("NAFTA"), if a Canadian business entity has sold a product to an American one, the Canadian entity may send employees to the U.S. to provide "after-sales service" incidental to the sale in question. After-sales services may include installation, assembly, repair, maintenance, and training. It is worth noting that the provision of after-sales services must be specifically contemplated in the original sales agreement. If such is the case, the agreement must be produced at a U.S. port of entry.

What is the difference between Business and Work?

As mentioned above, an employee can enter the U.S. as a Business Visitor to engage in a legitimate business activity. On the other hand, an individual who enters the U.S. to provide services to a client or business in the U.S. is considered to be "working" and will require work authorization prior to entering the U.S.

It a common misconception to assume that employees paid by a non-US source can perform services in the U.S. as Business Visitors. In general, any service that is provided to a U.S. entity in the U.S. by a Canadian is considered an activity outside of B-1 business visitor classification and work authorization is required.

If an activity falls within the definition of "Work", what options are available?

If the purpose for travelling to the U.S. does not fall within the permissible business visitor activities, including the after-sales service category, work authorization is required. The most common options in this regard are as follows:

  1. TN Status: A Canadian employee may apply for TN Status to work in the U.S. under one of 60 professional occupations listed in Appendix 1603.D.1 of NAFTA.
  2. L-1 (intra-company transfer) Status: A Canadian employee may be transferred (on a part time or full time basis) to a U.S. parent, affiliate, branch or sister company of a Canadian corporate entity if the employee is an executive or manager (L-1A) or has specialized knowledge (L-1B).
  3. Alternatively, for those who do not meet the criteria for TN Status or an L-1, other options may be considered, such as E-1 (Treaty Trader), E-2 (Treaty Investor), H-1B (Specialty Worker), and O-1(Extraordinary Ability).

With this in mind, employers would be wise to ensure that their employees are prepared when crossing the Canada-U.S. border. Indeed, ensuring, for example, that proper supporting documents are obtained, and that one's intent for travel is clearly to engage in a legitimate business activity, are important considerations when planning to visit Canada's southern neighbor.


About Norton Rose Fulbright Canada LLP

Norton Rose Fulbright is a global law firm. We provide the world's preeminent corporations and financial institutions with a full business law service. We have 3800 lawyers and other legal staff based in more than 50 cities across Europe, the United States, Canada, Latin America, Asia, Australia, Africa, the Middle East and Central Asia.

Recognized for our industry focus, we are strong across all the key industry sectors: financial institutions; energy; infrastructure, mining and commodities; transport; technology and innovation; and life sciences and healthcare.

Wherever we are, we operate in accordance with our global business principles of quality, unity and integrity. We aim to provide the highest possible standard of legal service in each of our offices and to maintain that level of quality at every point of contact.

For more information about Norton Rose Fulbright, see nortonrosefulbright.com/legal-notices.

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