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.
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.
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.
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
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.
Welcome to big company land. The company I work for has offices all over the world, and plenty of remote workers scattered even further afield. And yes that means the need to know the mechanics of every country, and every region within those countries. By and large they make their rules on a “worst case” basis. So whatever rule is the most annoying carries everywhere. This is especially true because we have offices in Germany, and they have some laws that specifically forbid being “nicer” to non-German workers.