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WFH - Work From Home or Work From "Home?"

The global pandemic fostered a huge uptick in remote work as many companies were required to shut their physical offices for months. For many office employees, remote work meant finding any space to set up a laptop, be it a designated home office, a garage, a basement or even a kitchen table. For others, however, remote work meant something entirely different - an opportunity to see the world. To paraphrase the old television series, "have laptop, will travel." Indeed, the thinking behind working from literally anywhere is quite simple: if an employee’s entire work day is spent on Zoom and the employee gets the job done regardless, does it really matter if the employee is in the employee’s actual home or in, let's say, Tahiti?

A few years later, as some form of hybrid working seems to be more than a passing fad, this question is especially relevant.

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.

For some, not being tethered to an office meant they could move to a different city or even a new country. Suddenly it was possible to work, say, from Portugal for a company based in New York, and at least 30 nations have started offering digital-nomad visas since 2020.

https://www.prnewswire.com/news-releases/topia-study-remote-work-expectations-driving-resignations-reshaping-competition-for-talent-301498164.html

©1994-2023 Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C. All Rights Reserved.National Law Review, Volume XII, Number 342
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About this Author

Associate

Marc handles transaction-related tax matters pertaining to employment benefits and compensation and also provides compliance counseling related to employment retirement plans, ERISA, and PBGC regulations. He regularly conducts tax and employee benefits/executive compensation due diligence for mergers and acquisitions and other commercial transactions.

Prior to joining Mintz, Marc was an associate in the tax and personal planning, employee benefits, and employment practices of a mid-size New York law firm. He represented clients in tax matters related to mergers, acquisitions, cross-...

212-692-6772
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