Working on Vacation in the U.S. as a Canadian Citizen

There you are…
A Canadian resident soaking up the Florida sun. Ten days of well-deserved rest, then it’s back to the office grind in Toronto. With total disregard for your right to some peace, that office laptop you brought interrupts and starts nagging you to check your email.

With a sigh of resignation, you give in and respond to a few emails. Some of the emails require a phone reply, so you make a few calls. You schedule a few videoconferences – and at least one of them requires hours of preparation. Before you know it, you are doing your job while you are supposed to be on vacation. 

Unfortunately, that may sound all too familiar. But is doing office work also against the law? After all, you were admitted to the US as a visitor for pleasure. 

Are you doing anything wrong?

Employment in both the U.S. and Canada triggers a vast array of rules, requirements, and responsibilities in areas such as worker benefits and contributory programs, taxation, immigration, and labor relations. Failing to follow all of the rules, all of the time, can be costly for employers and workers alike. 

But does the vast U.S. regulatory regime even apply to you? The entirely truthful but frustrating answer is “it depends.” In some circumstances, managing emails, phone calls, and videoconferences in a Florida hotel room is “employment” for U.S. purposes.

It would be so simple to just look up the Department of Labor’s definition of “employment” but that would only get you so far: four federal agencies (The Internal Revenue Service, Citizenship & Immigration Services, Social Security Administration, and Department of Labor) regulate work in the U.S., and they all interpret the term “employment” differently.

Fortunately, a visiting Canadian can remain on-side with all four agencies by following some common-sense guidelines to avoid even the appearance of U.S. employment: 

1. Your employer has a brick-and-mortar address outside the U.S. 
2. Your paychecks are issued by an entity outside the U.S.
3. You receive no employment income from a U.S. source 
4. Your activities in the U.S. do not directly benefit a U.S. entity during your stay. “Entity” means a U.S. partner, supplier, client, or prospect. Activities that directly benefit a US entity may require a Business Visitor (B-1) visa or a work visa − depending on the nature of the activity and current U.S. immigration policy. 
5. You accept no reimbursement from a U.S. entity before, during, or even after your U.S. stay. All reimbursements are from non-U.S. entities, ideally your Canadian employer. 
6. Be able to prove that the primary purpose of your visit to the U.S. is pleasure and not work. There is no standard set of documents for this, so rely on common sense and a little creativity. For example:
   • Your planned trip should last no longer than your available vacation time. Save records that prove: 

• • • You have a specific number of vacation days remaining in the year. 
    • You requested and were granted a certain number of days of vacation. 
    • You booked a trip for the days granted with no expectation that you would extend your stay. 

• • Book all travel on your personal account, not that of your employer. Pay for all trip and vacation expenses with your personal credit card, not that of the business.
  • Before your trip, develop a written itinerary that does not allocate significant time to work, follow that plan, and save a copy of it.  
  • Make advance reservations for fun events, ideally before you leave Canada. Retain the written confirmations. Save other receipts that suggest you engaged in those and other vacation-oriented activities. 

Your credit and debit card statements are an easy and credible way to document the vacation-focus of your trip. However, that only works if you pay with a credit or debit card linked to an account in your name. If other members of your entourage are paying and signing, that doesn’t provide you with adequate documentation. 

Save all of this documentation in a safe place for life or until you become a dual citizen.

Note that the above guidelines are offered from a cross-border planning perspective for Canadian workers who are not a) dual citizens or b) U.S. Lawful Permanent Residents (green card holders) in compliance with the terms of their status. These guidelines are not a substitute for the expert advice of your attorney or CPA.

Is all of this really necessary?

No, it isn’t necessary—as long U.S. agencies never ask about your stay. But if they do ask, then being able to prove that you were not employed is invaluable. 

What is the worst that could happen? A finding of unlawful (and unreported) employment can trigger a host of problems for the worker: a need to report income, pay U.S. income taxes and other taxes normally addressed through withholding, IRS failure to file (income tax return) penalties and interest, deportation, inability to extend stay, inability to change nonimmigrant status, inability to adjust status in the U.S. to a green card, and a finding of inadmissibility which may render you ineligible for a green card at a U.S. Consulate abroad. Note that waivers may be available, but they are not automatically granted.

Similarly, a finding of unlawful and unreported employment in the U.S. by a Canadian employee can have ramifications for the Canadian employer, primarily: difficulty securing U.S. visas for other employees and costly compliance issues with IRS and the Social Security Administration. 

Because the consequences are potentially enormous, avoid skirting the edge of unlawful U.S. employment. Follow our approach: avoid even a whiff of suspicion that you may be engaging in U.S. employment. 

If you or your employer, need to engage in U.S. activities that look like work:

• Consult with a U.S. business immigration attorney (and perhaps a U.S. CPA) well in advance of travel. 
• Plan any interfacing with U.S. partners, suppliers, clients, or prospects in consultation with that attorney. You may need a B-1 Business Visitor visa or a temporary work visa, depending on the activities you plan to engage in while on U.S. soil. 
• Budget sufficient time for visa processing, which can be subject to long delays. 

Summary

Most Canadians who bring their office laptops to the beach are operating in alignment with our guidelines. To briefly recap, our approach is:

• Document that your stay is a genuine vacation with the vast majority of waking hours spent on pleasure activities.
• Limit your “work” to checking email, interfacing with staff and clients in Canada, and a minimal amount of additional online engagement related to work. 
• Receive no income or reimbursements from U.S. entities (i.e., U.S. partners, supplier, clients, or prospects).
• Do no work that directly benefits U.S. entities.

Those who want to do more with their time in the U.S. than enjoy a vacation should invest in advance planning that includes consultations with a U.S. business immigration attorney and perhaps a U.S. CPA as well.