[dcole2929]

I have no real problems being people wanting to work remotely now and forever but I do think this is going to require a new legal framework to support it.

For better or worse there are very real tax issues associated with employees working in states and countries different than what their employer and government believes. A lot of these folks are knowingly or unknowingly dodging taxes in a way that is going to have severe consequences for them and company.

Establishing a tax base in a new city or state can put a company on the hook for thousand if not millions of dollars worth of additional taxes. And for the worker if you’re company isn’t withholding the right amount of state federal and local taxes you can find yourself with a huge tax bill at the end of the year.

[codegeek]

Yep. When I am hiring remote in US (out of state), we put a condition in the contract that you will notify us if you are planning to move from your home state because we may have to establish tax residency/nexus in that state as an employer. If an employee moves somewhere else and lies about it, it can put both the employee and employer at serious risk of violating compliance/HR/tax laws. For example, there is something called Workers Compensation that the employer has to buy. If an employee gets injured while working, workers comp. may matter based on the location of where they were at the time and can get denied if there are discrepancies. As an employer, we absolutely cannot risk having employees working from anywhere when they are supposed to work from specific locations only. No one likes these stupid laws but we have to follow it as an employer.

It is a little bit easier for international hires if they are just doing contract but even then things like W8-BEN etc come into play and dealing with IRS is always tricky and risky.

Honestly, if we are going fully remote (anywhere,anytime), we almost need a multi-national agreement/treaty so that employers are not left trying to deal with BS stuff. And no, services like Deel/remote.com are not enough.

[bombcar]

In the US there are already many states with population centers that cross state boundaries; those states often have negotiated with each other to solve some or most of these issues.

So if you live in Wisconsin but drive to Minneapolis for work each day, they know how to handle it.

We need more of those and closer to pairings for all states to make true "work from anywhere in the US" possible. I doubt it'll happen, because the states won't agree on the baseline level.

[commandlinefan]

It really seems like what we’re really discovering is that employment law is completely insane and ridiculously out of days.

[deckard1]

globalization, cheap easy access to air travel, and the internet are breaking down the systems that were working fine for countless years.

It's not limited to employment, either. Create a SaaS or other internet-based business and try to serve customers outside your nation. Or even outside the border of your state/territory/province. Entire services such as Paddle exist just to deal with this. But I suspect most people are trying to fly under the radar here using regular Stripe, etc. and not dealing with any of it, just like digital nomads do.

[aiisahik]

It may but mostly likely won't unless you're a huge company.

I hired a bunch of people outside the US and it's not a problem. Use Deel and hire them as contractors. Make the contractors fill out W8BENs. Don't let the HR folks and lawyers scare you - they don't understand risk vs reward mentality of a startup founder.

[codegeek]

Outside the US is a bit easier. How would you hire an out of state employee IN the US who moves to a different state ? You will need to register your business in that state then. Deal/remote.com don't help with that.

[aiisahik]

Already had that happen. Employee moved out of NY to FL. Did nothing except categorizing him as a FL resident in our HR system. Did not have to form a new business in FL or register as a foreign entity there. Employee lowered his taxes because he is no longer paying NY taxes. Great for everyone!

[codegeek]

"Did not have to form a new business in FL"

You may want to double check this. May be your HR System filed stuff on your company's behalf but you absolutely need to have a setup in the state where your employees work and that includes Florida.

[randerson]

Unless he meets very specific criteria he may still owe taxes.

[nicwolff]

Ouch, yeah. My team is losing a truly excellent engineer because he moved home to the UK during the pandemic, and corporate eventually noticed and said he could either 1. switch to our UK unit and work on their projects at their pay scale, or 2. leave the company.

He's leaving to work for a friend's startup and I hope he gets rich.

[IG_Semmelweiss]

Who created this liability for companies?

This doesn't make sense.

Is there a specific rule anywhere federally that any US state that says you must be aware at all times where your employees are when spending personal (non-work) travel time?

Moreover: 1) Can a state with no tax nexus to the firm (until the employee moved into it) have some kind of enforcement mechanism on the company ?

If (1) is no, and it comes down to a judge, 2) is there any case law that shows what is reasonable ? Does employer need to check every month ? every year? 3) Does a company have any responsibility if the employee lies ?

[AlotOfReading]

You must be aware of where your employees are working from because you have an obligation to follow the employment and tax laws of that location. If your employee isn't doing work, you aren't required to care (beyond any IP or personal security concerns you may have).

[wyager]

This is one reason among many we should eliminate employer-based tax enforcement. Your taxes should be between you and the government; the government should not force your employer to act as a tax nanny (e.g. with mandatory withholding).

[AlotOfReading]

That still wouldn't absolve companies of the obligation to know where employees are working from. Employment laws and worker protections vary from one state and city to another. To give one example, I had a friend that was fired from his Arizona job in ~2015 when his boss found out he was gay. If that friend had been working from California instead, he would have had legal protections.

[IG_Semmelweiss]

The obligation seems entirely arbitrary.

First, the employee (not the company) is the willing participant with the state benefits and obligations.

If the employee was hired in AZ, and never changed his tax residency to say CA with employer, why would employee be able to claim protections given by CA? If employees are going to play the game, they should be OK with the consequences.

Second, company level agreements don't work this way. Why should tax nexus ? For examples a company is based in CA, so it states its legal venue is in CA for contract disputes. Company then moves to FL....The tax residency change does not give the company the right to to update its legal venue to FL for convenience with its contractual counterparties.

So then, why can states break basic contract rules, which we hold sacrosant at the company-person level ? And what regulation exists to entitle states to pursue companies that do this unwillingly ?

There are laws that state you must pay taxes, not discriminate, etc.

What are the laws that mandate companies to know where your remote employee is working at all times ?

Should a company need to know the rules of 50 different states at all times, to know if they must check employees working offsite ? And how is a company subject to a jurisdiction's rules that it does not know it is party to ?

[AlotOfReading]

You're misunderstanding things. There's no law that companies have to know where their employees are working from. It's simply a consequence of the fact that governments have sovereign power to regulate things within their borders, including employment. Companies that pay to have work performed within state X generally [1] have to follow those regulations. If an employee moves to another jurisdiction and the employment agreement is not compatible with applicable local laws, then there are two main options: The relationship can be terminated or it can be brought into compliance.

If a company has employees in all 50 states, then yeah they need to have compatible employment practices with all of them (plus the respective cities those employees work from, for extra fun). In practice this doesn't come up much because most employment regulations are minor and most governments have similar rules.

[1] there are a million qualifications to this, speak to a lawyer if you want details about your particular case

[Melatonic]

The problem is that these laws are all written from the logical perspective that employment is mostly a thing where work occurs locally. What we need are new frameworks specifically for remote work and a way to manage this all internationally. Maybe something similar to that minimum corporate tax that has been proposed (on all companies internationally) but for individuals?

[llbeansandrice]

I understand your point but axing the entire tax portion of this problem is massive. Sure, your employer would probably still have to know to some degree, but it would be much easier and could end up with something like "you don't need to tell us unless you're working from $listOfPlaces".

[sedawk]

Good luck getting that (potentially every changing) list from the hands of your HR and legal departments! Remember, that (at least in US) lot of protections and laws change quite frequently and not knowing where an employee is would put the company at huge risk. Companies, for most part, establish their bases where they find local laws are favorable to them (in addition to ability to find enough able warm bodies to fill the positions), they don't want to open themselves up to lawsuits, legal hassle, what-nots from state/city the laws of which they are not fully appraised of all the time! What happens when that @listOfPlaces change, say every year?

[andylynch]

Not going to happen (would be complicated and makes tax revenue collection harder and reduce govt income while enabling widespread fraud). Also worth considering this is risky from an employer perspective as having employees based in unexpected places also means unexpected, possibly large liabilities eg local sales tax, employee rights etc. Specifically for US firms, foreign employment rights differ greatly and are often stronger in ways US firms find surprising eg around annual and parental leave. For example, a someone working from, say, France for a US firm with EU retail customers could quite possibly trigger a EU tax enforcement action against the company if it’s not on top of things. Or they could quite reasonably avail themselves of their much better French leave and competition rights.

[A4ET8a8uTh0]

Ahh.. but you see. This way there is a cashflow for interim projects and government does not have to wait for you to voluntarily give what you think is fair:P

[IG_Semmelweiss]

Yes.

We have established that during onboarding a person enters their home address.

My question is different.

What sort of regulation or mandate forces an employer to keep checking over the employee's shoulder? And how does reasonable get defined in this context ? In other words, what mandates exist for companies to force them to play big brother , and also define what tests must be done when playing big brother ?

And why does the employer come in defense of a state with which the company has no tax-nexus otherwise?

[codegeek]

"Does a company have any responsibility if the employee lies "

May be, may be not but in practice, you are not going to be able to tell IRS or another compliance org. that sorry, my employee lied so it's not my problem. As the employer, you are still on the hook for any taxes and other compliance related issues regardless. You can sue your employee may be later but that is not going to save you from the wrath of Uncle Sam and others.

[ttymck]

Why would an employer be unable to claim indemnity if their employee committed fraud? I agree that your position is the safe, conservative perspective, but I don't think it's quite so absolute.

[fantod]

Not to mention visa and health insurance issues.

[creaghpatr]

On the bright side, we'll have 87,000 new IRS agents to catch these unwitting tax cheats.

[dfxm12]

I don't think the IRS agents will catch the guy in the article who allegedly lives and works in England, but actually lives in Thailand and works in England :)

[MisterTea]

Its 2022. An AI will automate it.

[actually_a_dog]

Yes. Badly, with arbitrary punishments for those it finds out of compliance, and no appeals.

[MisterTea]

I should have included the /s tag as the humor appears to be lost on most.

[actually_a_dog]

To be perfectly fair, I don't think "It's $DATE, that should be automated by AI by now" is really a joking matter on this site, considering the audience. :)

[srk_hn]

Real question: Strictly speaking from a software engineering perspective, who cares? Why does a framework of taxes created by people who don't understand technology get to decide where I move around to?

I signed up for your job in a certain location and a certain date. That doesn't entitle you to keep track of where I am the rest of my life. As long as I'm able to be reached at the initially agreed upon location, regardless of how I maintain that communications channel, I never agreed to let you dictate where I live and move to and frankly nobody has that right.

Or is my body my choice just a convenient catchphrase for one topic only?

[guhidalg]

Serious answer: Wherever you choose to live, you benefit directly or indirectly from services paid through taxes. Maybe your employer doesn't care where you live, but the jurisdiction where YOU are does care about where you work because you are being paid but you are not paying what others around you are paying to live there. This is a 3-sided relationship between you, your employer, and the civil society you live in and WFH in a different country is unfair to one side of that triangle.

[dageshi]

Countries have mechanisms to deal with this. VISA's, they can simply charge more for longer stay visa's. Would they capture all of potential value of those taxes? No. But they'd likely capture a decent amount of extra money which they otherwise wouldn't have got, while still restricting people from taking native jobs in their countries which is what the wider populace actually cares about.

Pretty sure some countries are doing this already.

[Guid_NewGuid]

Just to provide more info.

There's quite a few now, something like 33 countries with these visas. The terms tend to vary. I took advantage of the first one, the Barbados digital nomad visa which they created to work around the loss of tourism due to COVID. Since most taxes in Barbados are sales taxes and they have a peg to the US dollar it has worked well for them in terms of foreign currency reserves and supporting the tourist industry during the pandemic.

Other countries like Costa Rica require visa holders to pay local income tax which is fair enough while others don't or have a reduced rate.

I'm unsure of the overall morality of it but it can be done legally through the correct pathways as I have been doing.

I don't like that people will just do it on tourist visas instead though which I'd guess is the bulk of the objection to it.

[dageshi]

I think most tourist visa's in most countries which are likely to have this issue are at most 3 months. If a country chooses to allow back to back tourist visa's like that then they sort of know what's going on and have accepted it as a net benefit overall. If they don't permit back to back then after 3 months you've got to up and move somewhere else which many people do, but realistically they're not that much different from a tourist in practical terms.

[lowkeylazers]

serious question: how is this different if you live in the city making X amount and then move to the suburbs where X is now supposedly 2X.

In my head we all pay the dues somewhere in some form to begin with - property taxes, sales taxes, income taxes etc.

It’s one thing if you’re avoiding paying those.

but how is it different that Twitter gets a tax write off to move to the Tenderloin. and if Joe/Jill chooses to move to the suburbs or temporarily move to Mexico while still paying state and federal income tax. sure there maybe some property tax loss but isn’t housing crisis already an issue? don’t company incorporate in Ireland to pay less tax?

[bombcar]

California has already started to try to tax people leaving, if I remember correctly. Something about the value of investments sold afterwards that appreciated during their time in California.

It's only going to get worse as the differentials increase.

[guhidalg]

In the US a majority of your taxes go to federal and state governments, whether you live in the city or the suburbs doesn't change where your taxes go and how much you're paying. The cost of living difference in that case is based on micro-economic supply and demand cost differences.

Companies moving to Ireland IMO are definitely exploiting tax loop holes and committing fraud. You and I and all of the countries devoid of tax revenue are hurt by companies benefiting from tax-avoidance loop holes.

[srk_hn]

How is that any different from the relationships between AirBnB/Uber and the respective authorities?

[guhidalg]

If you mean why Uber or AirBnB get to avoid paying taxes and you don't, they definitely are committing tax fraud: https://www.icij.org/investigations/uber-files/uber-tax-have... and https://www.passiveairbnb.com/airbnb-tax-evasion/

[CydeWeys]

> Real question: Strictly speaking from a software engineering perspective, who cares? Why does a framework of taxes created by people who don't understand technology get to decide where I move around to?

Real answer: The "software engineering perspective" you have here is irrelevant to tax/immigration law. Taxation is based on where you live and work (physically). And countries very much get their say on whether or not they'll allow you to live there, for how long, and for what purposes.

[asciimov]

You're missing the forest for the trees.

This isn't about an individual's right to free movement. It is about keeping employers honest about where their employees work and making sure they are paying their fair share of local taxes.

Groups of people put a strain on the local resources, we need those local taxes to fund those things.

If individuals were allowed to live somewhere and dodge the local taxes, every large company would use this to their advantage. Suddenly campuses of workers would all now be "remote" employees from their offices in some tax friendly area. This would put an undo strain on the local tax base who are now having to foot the tax bill for those not paying their share.

[EveYoung]

Well, you should care about it because laws apply to you whether you agree with them or not. So, at the end of the day both you and your employer will have to cover those costs. But nobody is preventing you from moving, you just might have to quit and look for a new job.

[okaram]

In theory I don't care where the bytes come from.

In reality, there are IP kind of laws, contract enforcement, taxes, time zones ...

[immigrantheart]

Picture me this. Imagine You are a foreigner that has software engineering skills but not good enough (emphasis) to compete with the cream of the crop that commands high salary. I.e you are the bottom of the barrel. You can’t afford a property where you live. You can’t afford shit where you live because your society is expensive.

Then you have this bright idea of “oh let me go to another cheaper country and get the benefit of their cheaper society but still command high salary”.

And you still don’t want to pay tax in that country.

Foreigners like these need to be ban 10000%. Losers that can’t compete in their home country and still don’t want to pay taxes everywhere they live.