In theory, working from home is great. It allows many people to travel and have leisure time while they still do their job and get paid. Unfortunately, there’s more to working remotely than many employees realize.
Working at home in your town is fine, but if you decide to go on a trip and still claim you’re in the state, it may end up hurting your employer. There are a lot of rules and guidelines when it comes to taxes, and every city, state, and country has different rules.
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Different Rules for Benefits and Insurance
Every state has different rules on the benefits and amount of insurance that businesses must provide for their employees. You may think that because the business is located in a certain state, they only have to follow that state’s guidelines.
However, the rules for this are a little muddled. The business is operating under their state’s guidelines, but if a worker is in a different state, then the worker must receive the benefits of that state. It’s up to the business to provide the right care for their workers, so they must make sure each worker has the right benefits wherever they’re working.
It’s easy enough to employ someone in a different state if the employer has a legal team that can make sure they’re doing it properly. However, when someone is moving around constantly or not in the state they claimed, this puts the business at risk.
It isn’t easy for big businesses to track everyone, especially if someone is constantly moving around. In addition to having different rules for their benefits and insurance, each state has different guidelines for how long someone has to be in the state before they get that state’s benefits.
For example, if you work in Florida but decide to travel to Maine, you have to be there for over 23 days and earn more than $3,000 before you can get benefits from the state of Maine. However, that isn’t the case in all states.
Some of the benefits that change per state include:
- Transportation taxes
- Garnishment laws
- Family and sick leave
- Worker classification
- Disability insurance
- Pay equity laws
- Background screening laws
- Rights to privacy
While most employees are simply unaware of these risks, other employees know the loopholes and use them to take advantage of their employer, such as staying in a state where they get more family leave than in the state they claim to be working from.
This can cause problems for the employer and lead to a loss of money the company didn’t plan for.
Different Minimum Wages
In addition to benefits, minimum wage laws change by state. There is a federal minimum wage, but many states have opted to offer above that amount. Some states also require breaks, sick leave, and overtime to have specific rates as well, which often start as soon as you begin to work in the state.
For example, in New York, all of their worker laws apply immediately for anyone working in the state, remotely or otherwise. There are no temporary or part-time guidelines for people working while traveling, so employers can face fines and expenses immediately.
Taxes Have To Be Paid Correctly
Even on a town or city scale, taxes work differently. You may have higher taxes in certain districts, and taxes may be broken up differently, so even those working in a different town in the same state can cause problems.
The problems increase as a worker moves to a different state. There are registrations that must be done by the employer to allow them to operate in some states and to tax their employees correctly. Licenses and permits must also be gathered.
If You Travel Internationally, You and Your Boss May Be in Trouble
Another big problem is working internationally. While an employee can just pack up and travel to another country to enjoy the sand and sun while working, there are some serious problems for the employer.
Some of the problems are:
- Labor laws
- Income taxes
- Social security
- Health insurance
- Immigration rules
- Corporate income tax
- Transfer pricing
An employee looking at this list may not realize what all of these are, but any business knows the headache, especially if they have looked at opening their business internationally.
Additionally, if an employee does their taxes properly, they may find themselves with little money left after taxes. For example, the United States always collects taxes from US citizens, whether they’re working for a US company or not, no matter where they’re working from. The only way to prevent this is to give up citizenship.
The country you are in will also take taxes. You may also risk getting fined or kicked out of the country if the government finds out you’ve been working there and if they require specific visas for people working in the country.
While some businesses are able and willing to work with their employees to make this kind of remote work feasible, it’s hard to handle the constant changes in the law. So to keep themselves safe, some employers are starting to take away the option for remote work.
So while you may be excited to get to travel, it may be best to stick to doing it on the weekend. If you want to make the most out of your weekend trip, skip the airplane and look at a car service. If you live in a major city, there are options for long-distance travel in a car, such as an NYC long distance car service.