Personal NAFTA Hardships

Background: The North American Free Trade Agreement between the USA, Canada and Mexico is an international treaty under which my wife and I, both Canadian citizens, are allowed to hold renewable one-year Visa (non-immigrant class) to enter the United States. A US entity, "the employer", in fact makes the application for the Visa. However, the State Agency in the State of X, by which I was hired and for which I started to work in a professional position in 2002 (as a "direct hire") considers me a normal "uncovered" employee who "holds a permanent position in a temporary capacity" because of this Visa. (This last phrase in quotation marks was first mentioned to me in 2005, after I had been working here for three years.) I provide professional services as a Professional Engineer, one of the professional occupations mentioned in Appendix 1603.D.1 of NAFTA. "To promote trade in goods and services, Chapter 16 of NAFTA facilitates the cross-border movement of business persons who are citizens of member countries to NAFTA. The provisions within Chapter 16 do not alter a member country’s general immigration provisions governing public health, safety and national security, nor do they preclude the requirement for temporary workers to meet licensing or certification requirements respecting the exercise of a profession or the delivery of after-sales service." I am currently about ten months through the term of my fourth Visa. The offer of employment that the State Agency made to me on January 10, 2002, required that I obtain one. In two months time, my wife and I need to travel to a US Border Crossing with a new application letter, physically crossover into Canada (or into Mexico) and submit the letter and my professional qualifications so that a new Visa can be issued there. My Visa is in the "professional" category, one of four categories. (The other ones are "business visitors", "intra-company transferees" and "traders and investors". A fifth category is the one for "dependents"; my wife holds a TD Visa, and under the US regulations, she is not allowed to work. After we arrived here, we learnt that US holders of the Canadian equivalent of the TD Visa in Canada are allowed to work. I believe this to be a discriminatory practice in the US. See http://www.quack.net/nafta/natdaart.html for some on this. The definition of professionals under NAFTA is: "...business persons who plan to carry out professional activities of the types indicated in NAFTA Appendix 1603.D.1 for an employer or on contract to an enterprise located in a member country other that one’s own." Also, "Professionals are exempt from the job-validation process normally required of individuals looking to enter a foreign country’s labour market." (See Department of Foreign Affairs and International Trade document "Cross-Border Movement of Business Persons and the North American Free Trade Agreement (NAFTA) – March 2000" for the above definitions.) US legislation is likely quite identical. The facts that NAFTA is a business treaty and that my position is one of a business person, mean that it deals with the exchange of goods and services (in my case, professional engineering services). NAFTA considers my employment actually a "prearranged business activity" and "engagement by a US employer". Further, I believe that the US Commercial Code (and many years of precedent, but I cannot quote any text or case law because I am not a lawyer) requires that this exchange of goods and services needs to be carried out according to appropriate (and current) currency exchange rates between US$, the Can$ and the Mexican Peso. The offer of employment was made to me in US$, and the salary I have received on a bi-weekly basis since I started work is in US$. However, I am of the opinion that the terms of my employment (which should have been called "engagement" under NAFTA (as a Canadian business person) have somehow omitted (and continue to omit) the following important considerations: * That I am and remain (by definition) a business person, and that I am not a real employee – like others who are US citizens or permanent residents with a Green Card or even others who have other types of immigrant class Visas; * That the State Agency and indirectly the State of X purchase my professional engineering services in US$ and pays this as salary to me as a Canadian citizen, temporarily living in the State of X; * That my remuneration is subject to NAFTA business rules as well as State Agency and the State of X Human Resources rules; * That my remuneration therefore should have taken into account the fluctuations in the currency exchange rate, because this is a normal business practice; * That for various reasons outside my control (and also outside the State of X and the State Agency’s control) the value of the US$ has dropped from Can$ 1.62 to Can$ 1.l582 (which is most recent Bank of Canada nominal rate on 2005-12-07); * That the original salary offer of US $ 55,000 per year was worth Can$ 86,778 in January 2002, when I decided to accept the offer of employment, and that my current salary of US$ 59,600 per year is only worth Can$ 69,029. (Note: This information changes on a daily basis). * That my current remuneration ("salary") is therefore far less in Can$ terms that what I had expected it to become when I accepted the offer of employment in January 2002; * That the offer of employment promised "modest salary increases" and that this is obviously understood to be in US$; (After arrival here, I learnt that the State of X is very low on the totem pole of remuneration, and that salary increases are small and far between); * That my remuneration should therefore somehow have been adjusted; * That it is not too late to correct this unfortunate omissions or circumstances; * That my wife and I maintain to have substantial financial obligations in Canada, seeing that we know that we must return there some day, and that we are unduly suffering (and discriminated against, see next point) and are compelled to make major insurance policy payments etc. in Can$ from a much weakened US$ salary base; * Moreover, that my wife and I were not allowed to touch our financial assets in Canada as they were "frozen" while we reside here. This was because the State of X (unlike some other States) discriminated against Canadians and did not allow us to deal with our financial broker in Canada while we live here (e.g. switching between mutual fund holdings). (In technical terms, the State of X is a "closed state".) Only a few months ago, I understood from my financial advisor in Canada that this has (without any public notification) been changed. We have suffered a lot of agony and net loss of financial assets through this situation. What has been done to date: I initially made the above concerns known verbally to my supervisor and his supervisor in January 2003, less than a year after I started to work for the Agency. The Can$ had been at its absolute lowest for many years in early 2002; this had changed during the year 2002. Since then, positions changed, my original supervisor retired in December 2004, and I applied for his position and two other positions, bringing the situation to the attention of my supervisor’s supervisor. In response, he e-mailed me: "I have reviewed your package regarding the TN (Treaty National) Visa. It is my pleasure to read the thorough and chronological documents about your concerns on the permanent employment. However, these three positions are established as uncovered permanent full time, in lieu of covered limited part time. Your employment status is independent of the position description or selection process. If you would like further clarifications from (State Agency) Human Resources please do so." The application letter for my 4th TN Visa was subsequently written by the HR Department (see below under (j)). Needless to say, I was not promoted, which leads to the question: Was I discriminated against? Nobody had or has an answer to my predicament. My current supervisor’s supervisor, on receipt of the first draft of much of the text above in March 2005, was sympathetic to my cause and suggested that I surf the net and make some enquiries. This Report is actually the result of those efforts. In late June 2005, I amended the text and submitted it to the State Agency’s Human Resources Manager and added the following proposal: (My covering letter read: "This document is not sent to you in jest. I believe this is a serious problem. I do not blame anybody particularly. I would therefore appreciate your assistance to come to a mutually acceptable solution.") "I hereby propose the following correction and resolution to this harmful situation: * That the salary that I have already received since March 2002 be recalculated in the Can$ equivalent of the US$ 55,000 salary that was first offered and the subsequent salary increases, to reflect the currency exchange rate between the US$ and the Can$ throughout this period; * That I receive this as “back pay” calculated by any of the following methods: * Method (a): adjustment on a bi-weekly basis; * Method (b): adjustment on a monthly basis; * Method (c): adjustment on a three-monthly basis; * Method (d): adjustment on the annual basis, using the Visa issuance date; * That income tax / State of X Retirement System adjustments resulting from the above back pay be made in 2005. * That my future salary also be adjusted in a likewise manner. I trust that this is clear, and hereby solicit your comments and consideration." I received the following response 8 days later: "I am sorry for the delay in my response. You make some very interesting points. However, I believe we differ in regard to the definition of business person and employee. By all measures, you are an employee of the State of X Agency and are compensated as such." It took me some time to think about this unexpected reply. On October 12, 2005, I wrote as follows: "Could you please provide me with the documents on which you base your view? As a Canadian holder of a TN Visa, I am bound by the NAFTA rules that are printed in the NAFTA handbook – http://spatialnews.geocomm.com/features/tnvisa/naftahan.pdf and in particular Section Five (pages 122 to 141). This clearly states that I am a business person. It would appear to me (unless proven to the contrary) that the State of X Agency did not review this document between December 2001 and March 2002." What had actually happened in the months prior to the day I started work, and since then? a. In April 2001, I had sent my professional resume to the State Agency in the State of X, applying for a position. (I had earlier been in contact with a consulting engineer in the State of X, who suggested by e-mail that month that his firm might get assignments easier from the State Agency if they knew my resume. Work opportunities with that consulting engineer did not materialize.) b. In November 2001, I received a letter requesting that I attend an interview for a totally different position in another Division of the same State Agency. This position had already been advertised on July 6, 2001 with the following text in the heading: "This position is uncovered and is not subject to the State of X Merit System." and in the bottom "The hiring process for this position will utilize the Direct Hiring Authority Program." c. I attended an interview with the letter writer on December 11, 2001 and after two hours I was verbally offered the position. (I later discovered that seventeen people had applied for the position, that only five others had been interviewed but that none had proven to have the necessary qualifications and experience.) The formal offer for the position was written on January 10, 2002 and stated that on reporting for duty, I would be required to complete the Employment Eligibility Verification form. I responded to the offer in the affirmative. d. On the basis of this "offer of employment", my wife and I went to the closest border crossing toward the end of February, 2002, and I obtained a TN Visa, based on an application letter that was written by and sent to me by the same person I had my interview with, who would be my future supervisor. My wife received a TD Visa as a dependent. Small cards (Form I-94) were stapled into our Canadian passports. e. On March 18, 2002, the day I started work for the Agency, I signed Form I-9 (Rev. 11-21-91) N - a U.S. Department of Justice form, Immigration and Naturalization Service. I declared in Section 1 the details of my TN Visa, which made me "An alien authorized to work until 02/28/2003" and wrote "TN Visa." in the line below it under the heading (Alien # or Admission #). In Section 2 List A, my supervisor (on behalf of the Employer) recorded the Visa number on document I-94 that was in my Canadian passport, and also recorded the expiration date of 02/28/2003. f. On March 18, 2002, I also signed may other papers like a Loyalty Oath and how I would be paid, papers for income tax withholdings and the like (see below). g. So far so good, it appears that I was taken on-board when I started to work that day. h. In February 2003, my supervisor signed an application letter to the INS (for my 2nd TN Visa), which he had asked me to write, based on his letter a year before. The letter quoted the original salary under which I was hired, and that "The State Agency is pleased with his work. With the present hiring freeze, the Agency continues to need (my name)’s services for the next 12 months and requests that a new TN Visa be issued." i. In February 2004, my supervisor again signed an application letter to the INS (for my 3rd TN Visa), which he had asked me to write, based on his letter two years before. The text of this letter was identical to the one mentioned in (h) above. j. My supervisor retired in December 2004, and for an application letter to the INS (for my 4th TN Visa), my new supervisor referred me to the Agency’s HR Department. Their letter is totally different. It stated "We wish to employ him temporarily in our Agency as a Transportation Engineer I. The intended period of employment is one year." "We intend to employ Mr. (my surname) for a one-year period in the position offered, and to take advantage of his unique skills and educational background in order to continue to provide the best services to the public." "We understand the temporary scope of Mr. (my surname)’s employment, and have informed him of this condition of his employment with us. We further understand that if Mr. (my surname) voluntarily terminated his employment, it would not be considered dismissal." k. Note carefully: This letter in (j) does not even recognize that I had been "employed" or "engaged" for three years already, that my wife and I had purchased a house and vehicles in the State of X, that we had State of X driver’s licenses, that I was hoping to stay with the Agency until early "retirement", in order to have some retirement….. The letter does not even mention the words "continues to need" as the other letters did. It does not say that the Agency was pleased with my work. When I asked about the latter sentence (about the temporary scope), I was advised not to worry, because I held "a permanent position in a temporary capacity". (Huh?) After I had mulled this over, all my earlier concerns started to coalesce, and that is when I started to read up about it. Voila, this report is the result of my discoveries. The Human Resources Manager responded on October 26, 2005 as follows to my e-mail: "The documents upon which I base my view are contended within your personnel file. For example, the Employee’s Withholding Allowance Certificate which is the Department of Treasury, Internal Revenue Service form W-4, the State of X Retirement System enrollment form, and the Employee’s State of X Withholding Percentage Election form A-4. You can make an appointment to review your personnel file whenever it is convenient." (and then the clincher that is supposed to shut me up and be quiet:) "I believe (the Agency) has a firm grasp of NAFTA and how it relates to its employees." Now what? It is clear that this response did not even mention the most important form at all, form I-9 above that I had signed on March 18, 2002. The other forms mentioned refer to tax withholding and the like, but not to my status at all!! So I thought about the matter a little more, and fired off the following rebuttal on October 31, 2005: "1. I do not deny that the documents that you quote do exist, and that they were signed by me on March 18, 2002. I have copies of the documents. I am convinced, however, that they only applied (and were supposed only to apply) to the first twelve months that I worked for the Agency in terms of the TN Visa that was issued at "Port of Entry", State of Y {on the Canadian border}. (A TN Visa has a maximum validity of 12 months, and my position was not referred to as a permanent position at that time.) I have some serious doubt on your assertion "By all measures, you are an employee ….. and are compensated as such." I am in what is called "NAFTA space". 2. No new documents or papers were signed by me for the period(s) I have worked for the Agency after March 17, 2003, under various new (not extended, but separate) TN Visas. It appears from your e-mail that the Agency does not consider new papers are needed, because the old ones remain valid. I beg to differ. There were no new negotiations to adjust my remuneration as a Canadian citizen to "engage in business activities at a professional level which means the performance of prearranged business activities for a United States entity." I believe I was denied the right to negotiate the remuneration anew (as is required by NAFTA) in February 2003. 3. I want to go on record that I pointed out my displeasure with the deteriorating US$ - Can$ exchange rate to (my supervisor’s supervisor) in January 2003, and that I stated that I was prepared to have my remuneration negotiated in terms of NAFTA, for work after March 17, 2003. Nothing was done about this. The is borne out by (my previous supervisor’s) letter for my 2nd TN Visa (on behalf of the Agency, addressed to the INS in (a Port of Entry, State of X) in February 2003. It did not indicate that the remuneration was negotiated, referred to the original stale) salary offer of $ 55,000 per annum and stated that "the Agency continues to need (my name’s) services for the next twelve months and requests that a new TN Visa be issued." I firmly believe that (my supervisor) did not even contact Human Resources at that time. 4. Identical wording (even using the two year old amount of $ 55,000) occurs in (my previous supervisor’s) letter (on behalf of the Agency) for my 3rd TN Visa that was addressed to the INS in (a Port of Entry, State of X) which was also written while I continued to make my displeasure known that the US$ - Can$ exchange rate was changing and (as a Canadian business person) was already causing personal hardship and anxiety for me and my wife. Once again, I was denied the right to negotiate the remuneration anew (as is required by NAFTA) for my "prearranged business activities" for the third TN Visa in February 2004. I firmly believe that (my supervisor) did not even contact Human Resources at that time. 5. After (my original supervisor) left the Agency at the end of December 2004, a different letter was prepared by (an HR employee) for my 4th TN Visa; this was addressed to the INS in (another Port of Entry, State of X). I believe this was the first time that HR handled the situation. Once again, I was denied the right to negotiate the remuneration anew (as is required by NAFTA) for my "prearranged business activities" for the fourth TN Visa in February 2005. 6. I question the assumption which you make that the documents within my personnel file are currently valid. You seem to assume that they continue to be the basis of my "employment" and the definition of my status as "employee". 7. In want to restate my (earlier) sentence: "It would appear to me that (unless proven to the contrary) that (Agency) staff did not review (the NAFTA Handbook and other NAFTA documents) between December 2001 and 2001 and maybe not before January 2005." 8. In response to your second paragraph, it would therefore appear that while the Agency may currently have a firm grasp on NAFTA and how it relates to its employees, this was not the case with the person who wrote the letters to the INS in 2002, 2003 and 2004. No contact was made. When I showed (my original supervisor) a copy of my memo of June 30, 2005, he said to me after reading it: "I am sorry." I believe that I therefore have a valid claim for additional remuneration or compensation. To date, I have already experienced a shortfall in take-home pay (after tax) of between $15,999.07 and $21,482,73 (depending on the ways the pay-back adjustment is calculated, whether on a bi-weekly, monthly, three-monthly or annual basis) – see my initial memo to you of June 30, 2005. The shortfall of $ 15,999.07 is the lowest because the number of adjustments is least. 9. I understand from somebody whom deals with imports (also under NAFTA) that for "goods", currency exchange adjustments are made on a 3-monthly basis. If this principle were to be used to adjust my remuneration, the shortfall is calculated as $ 21,422.10. With bi-weekly adjustments, the shortfall has been calculated as $ 21,482.73. (I have not made monthly adjustment calculations). 10. Once again, I would highly appreciate your serious efforts to come to a mutually agreeable solution in this matter. Something needs to be done. The matter is now somewhat urgent, as I would need another letter to the INS for one additional TN Visa (the fifth one) by the middle of February, 2006. Not obtaining that particular TN Visa would trigger a lot of additional financial harm, as I would stand to lose "employment" as well as the future State of X Retirement System benefits for which I hope to be eligible at early retirement on March 01, 2007." After having sent this e-mail, I received an angry phone call from the lady in HR who had written the letter in February 2005. I was informed that "TN Visa matters" and "employment matters" are two completely separate issues. I was told that the HR Department had received a "legal opinion" from the State Attorney General’s office, but when I asked for a copy of this document, I was told that there is no paper as such but that there had only been a phone call. I have not had a formal written response to my e-mail to this day. On December 07, 2005, I discovered in my personnel file that a section on the bottom of Form I-9, called Section 3 – Updating and Reverification (To be completed and signed by the employer) is completely blank. Under point C, this states: "If employee’s previous grant of work authorization has expired, provide the information below for the document that establishes current employment eligibility. Document Title: _________ Document #: ________ Expiration Date (if any: __/____/___" and "I attest, under penalty of perjury, that to the best of my knowledge, this employee is eligible to work in the United States, and if the employee presented document(s), the document(s) I have examined appear to be genuine and to relate to the individual. Signature of Employer or Authorized Representative Date (month/day/year)". The Agency has not updated and reverificated this form at all; they never even asked me to show the TN Visa in my Canadian passport; is this their "firm grasp on NAFTA"? I made another copy of the document from my employee file. Does this mean that I have been working here as an "unauthorized alien" since February 28, 2003? On December 07, 2005, I also asked the Human Resources Manager if I could see or have a copy of documents that relate to the Agency’s Direct Hiring Authority Program – which was quoted on the Hiring Announcement for the position on July 6, 2001. It appears there are no such documents. I would like to see these documents because they may indicate that this process only applies to US citizens and others with permanent residence – in which case my "direct hire" may have been completely inappropriate. A legal opinion by the City Attorney, City of San Diego e.g. considers that "The City’s residency requirements follow the Immigration and Nationality Act [INA] of 1952, 8 U.S.C. $$ 1101 through 1537, which has not been superseded by more liberal entry provisions of NAFTA." Who knows, the State of X may have something similar in its HR documents than http://clerkdoc.sannet.gov/RightSite/getcontent/local.pdf?DMW_OBJECTID=09001451800634e9. Other investigations to date: * A Senior Trade Policy Analyst at the Canadian NAFTA Secretariat wrote: "Thank you for your e-mail in which you enquire about the applicability of NAFTA rules regarding your current contract. Please note that the NAFTA does not stipulate specific contractual details such as salary levels and payment details". (My knee-jerk reactions: (1) I do not have a contract and I told you so. I hold an "uncovered position" and they told me a year ago that I hold a "permanent position in a temporary capacity"! (2) If NAFTA is completely silent on these things, what about the normal commercial trading rules between countries with different currencies, which have been in place between Canada and the US for more than 200 years?) * An Immigration Lawyer in another State (believed to be a Canadian himself) responded to my e-mail: "There is nothing that can be done unless they renegotiate the base." (My knee-jerk reaction: What about my rights or privileges of renegotiation (after each year after year) that seem to have been negated?) * A local firm specializing in border crossing issues replied by phone to my e-mail with attachments, and suggested that they could not help but that this is a tacky legal matter. * A local employment lawyer replied to my e-mail and attachments, suggesting that I pay him an amount of $200 (up front) for a consultation. I have not responded to this yet. What should I do? The following questions to sum up my concerns in this horrible situation: * How should I respond when HR in February 2006 gives me a letter addressed to the INS (for my 5th TN Visa) that does not address any of these concerns and just quotes what was written before? Do I have any right to negotiate at that time? What if it is not successful? * How should I respond if HR in February 2006 decides not to give me a letter addressed to the INS? My position is an "uncovered" position; the State of X is a "freedom to work" State. Do I have any recourse? I many not work here without a Visa. I know that we have to return to Canada when my working days are over. * Should I perhaps report the problem to the US Federal authorities? If I elect to do this, should I do this before I receive my 5th TN Visa, or afterwards? * What should I do in the immediate future – in early January? How should I approach my supervisor and the HR Department? * Should I perhaps see a lawyer or a mediator or an arbitrator? The problem with this approach is that a (normal) immigration lawyer would be no good (because my Visa is a Non-Immigrant Visa; these things were first administered under the US Department of State and not the Immigration and Naturalization Service – after 9/11 many of these things have changed.) What I probably need is an employment lawyer who also knows about international trade. * Was I naïve when accepting the position almost four years ago? Did I do anything wrong or imprudent that could have avoided the development of this situation? * Should I just prepare an Invoice (as a business person) and mail it to the Agency? To date, the shortfall in my take-home pay has increased to $ 23, 480.79, if calculated with method (a); $ 22,932.41 if calculated with method (c) and $ 17,316.50 if calculated with method (d). On a bi-weekly basis, my take-home pay is currently short by more than $500. To look at exchange rates, see the Bank of Canada web site. The free-fall of the value of the US$ is not only due to purely economic problems; the invasion of Iraq is a huge part of it. Am I now involuntarily paying for that war? My wife and I feel trapped in the US due to this situation. If we would have known this, we would not have come here. Quitting is not (yet) an option. Seeking employment with the private sector is also not really an option – the State of X discourages consulting firms to hire current employees. (I was a self-employed consulting engineer in Canada before coming here.) Making waves (what I am doing now) makes more sense to me. Others may also be helped or warned about this.

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