Posted on 09/18/2023 12:57:32 AM PDT by MalPearce
Excerpt from agenda of an upcoming webinar:
An employee now living and working from home in Indiana would be subject to Indiana wage-hour laws even if the employee used to work in Illinois and the employer is still located in Illinois. Overtime rules, minimum wage rates, and permitted deductions from paychecks, even pay stub requirements are governed by where the employee is physically performing the work. The same applies to garnishments for child support and creditors.
(Excerpt) Read more at skyeventmanagement.com ...
I'm not promoting the event but I haven't seen any discussion on this broader issue on FR. So for mod benefit, this isn't a promotion. It's simply a "post COVID problem statement" arising from telecommuting that's worth discussing.
How can this issue be managed ONLY on a non federal basis? If you had twenty remote workers in 20 different states you'd need to know the mechanics of 21 different state regulations. Surely there's a better idea?
Dang.
There goes my planned move to the Philippines.
Back in fall of 2020...I had this conversation with some guy who had been a NY City resident, and was given the situation that he could work from ‘home’. After a month, he posed the question...does home have to be anywhere in NYC, or could he go elsewhere.
His boss eventually came to an understanding...about every six weeks...he wanted a actual face-to-face meeting, the rest of the time...it didn’t matter.
So this guy went to some cousin who owned a RV dealership and picked-up an RV...parking it somewhere on the Outer Banks (North Carolina coast). He had connectivity, and access to some local airport. He intended to fly into NYC to please the boss for one morning, then return that evening to the RV park.
I posed the question...was he going to be permanently in this park? No.
So with your idea...month by month, I might be in another state, and gearing some regulation to fit...would be near impossible.
I’m not pro-home-office, but I suspect for 10-percent of people, that they might be creative in this environment.
This is exactly what remote working means, law wise. It is why many companies cringed at sending everyone home. Lots of laws involved.
For instance, if you tell me I must work remotely and have no office to come to, then I can move to another State. Many people did. I did. Tax and labor laws became a nightmare.
My wife’s company does not allow remote work from Colorado.
EC
If one is employed by an entity
in a different state other than
his own, the ‘company’ is going
to figure taxes and deductions
based on where that particular
office is located. It’s up to
the employee to forecast how much
state tax would be owed.
Therefore, the state deducts
taxes owed, no matter what
state the employee lives in.
Working in Texas, reside in
New Mexico? You would still
have to pay the state taxes.
Did this for a number of years
as a contractor. It’s called
plan ahead.
This wasn’t all that difficult
to figure out.
What gave me the most hassle
were local sheriff’s wanting
to know why I hadn’t changed
my license plate after 90 days
of living in their state.
This is why it’s so interesting.
Us Brits voted for Brexit and then suddenly instead of seeing a bonfire of regulation and the greater regulatory freedom pledged, the red tape went through the roof. With devolution in the UK there’s even more complexity.
If we had fifty states doing WFH stuff differently instead of only 4 (or, 4 + the bailiwicks + the EU) it’d be totally unmanageable.
COVID tactical solutions kept it simple but now the machinery of overregulation is back with a vengeance. Small businesses are utterly drowning in pointless nonsense that larger firms can avoid simply by creating a new head office somewhere else.
Yes, unless you're an independent contractor, in which case the burden is on you to sort it out between where you "live" and "work".
This is no different than anything else really. The most recent thing prior to this that sort of impacted the general public was the sales tax on things bought on the internet.
Every state has it's own regs for banks, insurance, estates, businesses, etc..
However, medical insurance became more federal with the advent of commie care.
So is there a commie care type "solution" here? I'm not sure it's necessary. You still have to define a primary address with the IRS under whatever those rules are. I presume this is the same address used on state forms unless there's some loophole I'm unaware of.
Tax and withholding is not likely to be a big deal for employers as they will typically hire accountants that have easy access to info on the different jurisdictions and rates.
The only real wrinkles come up with legal issues in that the employer may have some policy that is allowed in one state but not another.
Colorado has a law that employers have to show the salaries for each position high and low I believe. That may be the issue.
It is one of the issues. There’s a whole slew of other reporting requirements that would force a company to open a new department just to cover the reporting.
It’s easier to just prohibit remote work from there.
EC
We'll be seeing more articles like this as a push begins to eliminate work-from-home and effect return-to-office. Desired outcome is to bail out the commercial real estate market.
< / tinfoil hat >
I’ve been a remote worker for 16 years, the first remote worker the company ever had. For a few years my paycheck reflected the company’s state in taxes, the state I moved to doesn’t have state tax. I was contacted by someone in accounting who said I should question this so I went to a local tax accountant in my residential state who confirmed that I shouldn’t be paying some of those taxes. I then had to file a form with the the state where my company resides proving where I lived. That state agreed that I shouldn’t have to pay those taxes and I could reclaim 3 years in back taxes. I believe these laws go state by state.
I’ve dealt with this as a corporate payroll manager for well over 20 years. While COVID and the increase of remote workers made this more of an issue for more companies, the concept is not new.
When you have an employee working in another state, one where you have not previously had a physical presence (an office, a plant, a store location, etc.,) you do now. It is called creating NEXUS.
If the employee is working from home, their home address becomes a de facto office location for your company. The company will register in that state (and local jurisdiction if applicable) for withholding tax, unemployment and could trigger other taxes such as sales and use tax, corporate tax, and has implications on workers compensation insurance. Ohio and Washington state have mandated state-run workers compensation programs so a company with employees in either of those states will have to set up accounts and pay WC to the state.
And yes, the employee and employer are subject to the state wage and hour laws in the state in which the employee is physically working.
The issue of having workers working in another country is a whole other topic.
What gets complicated is where you have an employee working in multiple states but that is a whole other conversation. I know the American Payroll Association has long been advocating legislation to streamline tax withholding where employees work in multiple states and in favor of nationwide reciprocity for all 50 states.
Speaking of the American Payroll Association, the have a report on this topic that you may also find useful.
https://f.hubspotusercontent10.net/hubfs/516067/Presence-NexusReportMarch2022Final.pdf
There’s a book called The 4-Hour Work Week.
That’s one of the central ideas involved.
Using technology to do remote work and take work/vacation hybrids.
I could go to Ireland for a month.
Realistically, I can do 8 hours work in 3 hours.
I could spend the rest of my time seeing the sights and meeting the people.
We are starting to deal with this. Workers in CA are a PITA
This has long been an issue for employers. It sometimes limits who they will hire on a remote basis. But it’s not really that hard to establish and manage and most companies will add a new domicile state for someone they really want working for them.
I imagine HR and finance apps help on the management and tax filings for the complexity.
We are not going back to the office…ever.
Good luck replacing us with employees of equal measure.
“Realistically, I can do 8 hours work in 3 hours.”
My nephew was the extreme example of that—he could do a full shift of work in one minute.
He was (and still is) a computer hacker/genius type—and got a job at a company where he worked the graveyard shift.
It took him a few months to figure out the job—and then he created a software program that performed all the tasks for the shift.
Since he also had street smarts he kept his software program a secret from his fellow employees and bosses.
He gradually improved his “performance” so the bosses realized he could handle the graveyard shift in his particular room all by himself and they moved a couple of co-workers to the day or swing shift. The co-workers were thrilled to get off the graveyard shift.
Now he had the privacy he needed. He would report to the graveyard shift and spend a minute initializing his software.
He spent the rest of the shift mostly sleeping with occasional reading if he woke up at some point.
The bosses kept trying to “promote” him to supervise the day or swing shift and he declined—kept this going for years.
The company never found out about any of it.
P.S. You might wonder what he would do if the phone rang with an emergency. His software prevented those emergencies from ever happening—it turned out they were due to human error in his shop—and he fixed all of that.
If this all made sense, I could see the Air Force having all admin people at one base in the US, and if you needed admin support...you’d crank up a VTC session with Amn Jones to get XYZ. Probably the same way with chapel support, mental therapy, and intelligence folks.
Good for him, and actually the company.
His work was completed and they wanted to promote him.
Contract fulfilled.
I design projects alone, so my work doesn’t require other’s input.
Most of my work interaction is talking trash with the other designers.
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