Remote work is here to stay. Companies seem to be embracing virtual work and grappling with tracking expanding populations of remote employees all at the same time. Figuring out how to monitor employee movements is one of the hottest employment and benefit topics of 2021. This, of course, includes our corporate stock plans.
I recently caught up with Marlene Zobayan of Rutlen Associates about things employers need about the changing landscape of business practices and tax compliance when it comes to the remote workforce. We dive into the details on the latest episode of the Equity Expert podcast: 5 Things on Mobility Compliance in the Age of Remote Working. This episode is packed with information and I’ll share a few highlights:
The employer does have a responsibility to track their mobile employees, even if the movements are voluntary. Companies need to put effort into identifying employee movements, even if short term. There can be a balancing act between being too restrictive and too flexible in trying to monitor or approve employee movements.
Ignorance in tracking mobility is no longer bliss. According to Zobayan, the question of “what if we didn’t know?” surfaces a lot. Her answer is straightforward (though with nuances) – the time has come where the employer can no longer say “I didn’t know” about the employee’s movements.
When it comes to remote worker movements, there is way more at stake than just matters of tax compliance. When Marlene and I get into this segment, the list goes on and on. The employer needs to evaluate the impact of mobility on many things ranging from insurance benefits to Internet security (can they work securely from wherever they are?) and employee safety.
Double taxation is rare, but double withholding and reporting is more common. An employee getting hit with a double tax bill for taxable transactions is an anomaly. The nuances of reporting and withholding in situations where more than one tax location is in play can get quickly complex. Zobayan outlines the concept of “sourcing” for tax purposes in the Spring 2021 issue of the NASPP Advisor newsletter. See the article “Modern Mobility: Multijurisdictional tax compliance in the age of COVID-19 and remote working.”
A remote work policy is something companies should implement “yesterday.” This type of policy can set forth expectations and provide a framework for handling employees on the move.
There’s a lot to learn about how remote workers are changing the mobility landscape for stock plans and company practices overall. Check out these additional resources on mobility considerations for stock plans:
Modern Mobility: Multijurisdictional Tax Compliance in the Age of COVID-19 and Remote Working (NASPP Advisor Newsletter*)
State Mobility Issues for Equity Compensation Professionals (Article)
5 Things on Mobility Compliance in the Age of Remote Working (Podcast)
Remote Workers: The Modern Mobile Employee Comes with Tax Compliance Challenges (Blog)
*The Spring 2021 issue of the Advisor is dedicated to mobility related topics for stock plans.
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