With remote work more prevalent than ever, employers should be aware of the tax and pay consequences of establishing nexus with a jurisdiction, two American Payroll Association representatives said May 13.
“Remote work is here to stay,” said Laura Lough, the APA’s director of publications.
As an example of a very flexible remote work policy, Airbnb is allowing employees to work remotely from any country or jurisdiction the company operates in for up to three months at a time, also creating a team to help with the tax and payroll obligations of the policy, Lough said.
Such workers who travel to work remotely are known as digital nomads, Lough said at the APA’s 40th Payroll Congress in Las Vegas.
“I think it will show that there are going to be companies that will have to offer greater flexibility,” Lough said while characterizing Airbnb as an extreme example.
Even Wall Street firms have adopted a hybrid work model with partial remote work, Lough said. “I think you can expect that employees are going to want some sort of hybrid situation,” she added.
In the U.S., payroll-related nexus considerations include tax withholding rules and reciprocity agreements, unemployment tax coverage, and labor law provisions, said Lisa Aragon, CPP, a director...
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