Implications of “Work from Anywhere” – When Remote Workers Cross State Lines | ADP

Workforce Trends

Employers continue to adjust work practices and policies to enable remote and hybrid work. And while much of the attention has focused on workers’ preferences for remote work and organizational policies on the topic (e.g., expectations of the number of days in a physical work location), greater attention is now being paid to other implications of remote work. This ADP article outlines a few of the under-discussed implications of remote work, such as its impact on tax withholdings, Workers’ Compensation, Unemployment Insurance, benefits, Wage and Hour laws, and emerging laws such as privacy and paid leave. For example, regarding tax withholding in the US, employers withhold applicable state and local income taxes based primarily on where an employee performs services—meaning their physical location—and sometimes, secondarily, where the employee lives. Some states have reciprocity agreements that permit withholding in a single state. These might be relevant and helpful – but less than half the states have them. However, as noted in a previously shared JDSupra article,  in the U.K., an employee’s tax position will generally not change if they are working from home and move within the U.K., unless they move to or from Scotland. In France, remote working will, in principle, have no impact on the employee’s tax position. As more workers move to a new geographic location because of remote work, organizations will need to be aware of these implications, which can vary significantly depending on the country. And as stated in a Gallup article, it’s important to remember that although physically and theoretically people can work anywhere, they can’t be employed everywhere.”