With the pandemic lockdowns in 2020, companies were forced to adapt to remote work protocols where possible, or close down operations. For companies that were able to successfully transition to a remote workforce, there were certainly positive benefits, but there have also been complications as well.
One of the complications is employee relocation, whether it’s the company asking a new hire to relocate, or an employee asking to relocate. Both situations have different complexities, but we’ll address both in this article, and give you 3 tips on successfully navigating employee relocations during the pandemic.
Companies used to pay lump-sum relocation packages to employees, but this strategy has shown to cause extra stress to employees' lives, lowering productivity. If at all feasible, you should be there for them throughout the procedure.
Housing is one of the most stressful aspects of relocating. If your employee is a homeowner, you'll want to do all you can to make the process of selling their property as painless as possible, which includes finding a buyer as quickly as feasible.
When you try to set up staff for employment in new states, you'll be adding a lot of work to your plate and causing a lot of disturbance. Businesses can utilize the services of specialized employee relocation companies to streamline the process and take care of a lot of the paperwork and needful things. You can check out a helpful employee relocation guide from one such company.
Relocating during a pandemic has its own unique challenges. While some employees are willing to relocate, they expect their employer to provide assistance. 82% of respondents expect living assistance in either the forms of moving expenses (60%), a lump sum (60%), or temporary living expenses (54%).
In a 2020 DSJ Global survey, 69% of respondents in the United States said they would relocate to a different place within the country for the proper job. COVID-19 has also been a big influence in Americans' propensity to relocate, as seen by studies indicating that 35% of people would migrate for this reason.
Your employees' safety is your first responsibility during this epidemic. Because it's likely that they'll want to avoid flying or taking the bus, you could want to supply them with a rental car if they don't already have one.
You must be prepared to give allowances for their stays if they stop anywhere overnight, depending on the route. Keep in mind that if they bring their family with them, you'll need to set up more money for them.
When an employee works outside of the state or states where the company does business, it creates a physical nexus, making the employer liable to the tax regimes of that jurisdiction. State income taxes, gross receipts taxes, and sales and use taxes might all apply to employers. Taxes levied at the city or county level may be relevant.
Being subject to state and local taxes generally requires both the preparation and filing of tax returns, and the payment of taxes
According to Cincinnati-based law firm Taft Stettinius & Hollister, certain states have temporarily disregarded the development of a business nexus for state taxes for COVID-19-related remote labor on behalf of out-of-state employers. However, out-of-state employers may be required to withhold state income taxes from remote workers who live in these states.
Businesses throughout the world have had a challenging year, but the most successful ones have adapted to their new circumstances. While struggling to adapt to remote work protocols, it created extra complications when employees suddenly thought they could work from literally anywhere.
Great businesses are able to strike a balance between the demands of the company and the requirements of its employees, which sometimes necessitates accepting and managing risk.
Before approving relocation plans, check with human resources to ensure that workers' relocation plans will not violate any regulations or exceedingly burden the company with paperwork.
There have been situations where once telecommuting became normal, employees simply casually asked to be able to move further away from the office, and travel to the office would be unnecessary. HR later discovers that this employee relocated to a new state or nation, and the situation is far more serious than the immediate supervisor knew, because of tax regulations across state lines.
If the employee is relocating for personal reasons and it is not something the company is requesting, there is very little moral dilemma over offering a relocation package.