So far during the pandemic, 22% of U.S. adults have moved or know someone who has moved. When one or more of your current employees count themselves among those who want to relocate right now, what do you do?
Many companies still have employees working from home, with some committing to remote work through the remainder of 2020, while others are canceling leases and planning on remote operations for the foreseeable future. Now that many Americans aren’t tied to a physical workplace, this trend of relocation is growing. Whether they desire a lower cost of living, need to be near family, or just want to live in their dream city, people are moving in greater numbers. This requires companies like yours to address an increasing number of employee relocation requests.
The Legal Implications of Out-of-State Employees
While an employee request to move to another state may come from a place of good intent, they likely do not realize the wide-ranging implications such a move could have on their employer. In this remote-work world, they may think that their proximity to the office makes no difference to their quality of their work or the amount of their work output. However, there are legal implications that employers like you have to consider in this scenario.
Let’s consider the traditional example of a business operating in one state, like Illinois. All the employees live in Illinois because they’ve been used to a reasonable commute to and from the office. As a result, that business has streamlined operations and straightforward legal obligations that are specific to Illinois. With the advent of remote work, what happens when one of that company’s employees wants to move to New York?
In this example, the organization wouldn’t have ever withheld New York state tax before. They wouldn’t even have an employer ID number set up in the state. If they had to fire or lay off that employee in the future, they would have no experience with unemployment policies and wouldn’t have an unemployment ID number either. It’s likely that there are different regulations in New York compared to Illinois regarding vacation time, minimum wage, breaks, overtime, and sick pay. Even paydays are regulated in certain states. It’s a lot to consider.
Now imagine that 10 of that company’s 50 employees decide to relocate to different states. That means 10 different scenarios for considering all the above factors, easily overwhelming the HR department of even a medium-sized business. Unfortunately, the challenge goes deeper than a business understanding compliance or keeping up with the appropriate paperwork. Multiply those 10 relocating employees by thousands of companies across the country, and it’s easy to see why the state government agencies that process changes like these are so backed up. They simply cannot process requests from businesses fast enough.
Additional Employee Relocation Considerations
As if the legal ramifications aren’t enough to complicate an employee’s relocation request, there is much more to consider. It’s imperative to create a strong and clear policy regarding remote work and relocation so that there is no gray area. Employees should know exactly what their options are, even if the policy has different stipulations for different levels of seniority. Until you’re able to decide on a concrete policy, it is wise to hold off on granting relocation requests if possible.
If you do allow employee relocation, create timelines that set the right expectations for all parties. Ideally, these timelines will account for the inevitable delays in making administrative changes. The last thing you want is an employee suddenly living in a new state but you’re unprepared for them to begin legally working there. Even if this employee starts working smoothly, what will they do if you decide to bring employees back into the office sometime during 2021 or in the future? Are you committed to allowing them to continue working remotely, or do they know you might ask them to relocate again? Include this in the timeline if you think there’s that possibility.
Working in a new state means working in a new environment, and work-from-home life in one location can be very different from work-from-home life in another. After all, that person’s working conditions have changed. How does that impact their performance? Do they have all the supplies they need? Are they technologically set up for success at their new place? Moving can be stressful, so that employee may need a period of time to transition and get into their groove again.
In truth, there are many more questions to consider. When employees who relocate are harder to retain, how do you plan to keep them engaged? Will you start to recruit out-of-state talent, and does that make it easier to allow current employees to relocate to those states? What happens if an employee works elsewhere for only part of a year? And do they even realize they might be paying higher state taxes somewhere else?
How Can You Grant Employee Relocation Requests?
It’s been a difficult year for businesses everywhere, but the most successful organizations are those that adapt to their new environment. A relocation request can feel like the employee is throwing a curveball your way, and it does introduce more risk. However, great companies are able to balance the needs of the organization with the needs of their workers, and sometimes that means having to accept and manage risk.
When you try to set up employees for work in new states, it will add a significant amount of work to your plate and inevitably cause disruption. To alleviate this burden, businesses like yours turn to Synergy for our turnkey solution. Since we’re a Professional Employer Organization operating in 42 states, we can quickly get your talent working in a new location.