A recent Bloomberg article, in part citing a study done by Topia, noted that “HR professionals often don’t know where their employees are working.” During the early (and darkest) days of the pandemic, employers were concerned about the health and, in many cases, literal survival of their employees and dependents, and the thorny issues regarding maintaining a multi-state or multi-national workforce were put on the back burner. Now, as many employers are adapting or maintaining hybrid policies, it is crucial that employers consider the following (non-exhaustive) list of potential issues:
- Income tax: different states and countries have different tax rates. If an employee working in a state with high state income taxes moves to a state with no state income tax without telling the employer, is the employer withholding too much? In addition to payment and withholding issues, there are reporting issues as well.
- Immigration: employers could be subject to risk if employees are working without proper authorization in certain countries.
- Cyber security: is logging on at Starbucks as secure as a home network or an office network?
- Benefits: receipt of certain benefits may be limited, or eliminated entirely for foreign-based employees.
- Local labor law: states and municipalities have their own laws that may impact a mobile workforce, such as employee/contractor classification, minimum wage and overtime pay requirements, and statutory leave entitlements.
- Workers’ and/or unemployment comp: which state/country law controls if an employee moves to and/or works in another state or country?
- Corporate law: an employer may have to qualify to do business in a different jurisdiction if an employee moves to a new location, and the employer might be subject to local income taxes and other taxes and fees.
- Employee discipline: If the employee lies to their employer about where they are working from, they may be subject to discipline, potentially including termination of employment.
Throughout the pandemic, we have worked, and will continue to work, with our colleagues across practice areas to craft policies that seek to address the ins and outs a nationwide workforce, while also assessing especially unique situations on a case-by-case basis.
Employers may need to embrace remote work to retain their talent, but also need to invest in policies, tooling, and technology to properly manage a distributed workforce. Remains to be seen how the “H” in “WFH” will continue to evolve.
Source: Mintz – Marc N. Aspis