In order to attract and retain the best talent, your company has made the decision to continue to allow employees to work from home indefinitely.
To you, the HR Manager, “home” means employees must work from the address on their paycheck, but to the employee, “home” just means they can work remotely from anywhere they choose. And some have chosen to work in another state while others have chosen to work in another country.
Your mobility tax provider has informed you that when your remote workers work outside of their Home jurisdiction, they are potentially creating reporting and withholding tax risks and compliance requirements for both themselves and the company. You now realize you need to know exactly where everyone is working so you can begin to address any potential compliance risks.
Your plan of action is to establish a tracking process to monitor your employees' locations and an approval process for remote work requests. However, you're facing challenges in setting up the tracking process and determining the necessary components for the approval process. And the requests to work remotely keep pouring in. And the tax risks continue to grow and evolve. And you still have all your other job duties to perform.
Here is the reality. Over the past several years, there has been a huge uptick in remote workers, causing workloads—required to manage this population—to increase significantly. Couple this with a tight job market where there are more open positions than qualified candidates in the HR and mobility space, and you have a recipe for stress and job fatigue.
What we continue to hear in the marketplace is that HR and mobility managers are overwhelmed and struggling to deal with this new future of remote work. And it is causing more than just headaches.
So, what can be done to reduce this stress? Below we look at some of the issues facing HR and mobility teams and provide actionable ideas that can be implemented today.
What are some of the issues HR and mobility managers are facing due to the expanded remote workforce?
Mobility managers do not have enough resources or staff to create proper remote workforce policies, frameworks, or approval processes.
We have heard from many HR and mobility managers who feel like they are “building the airplane while flying it”—creating processes and policies as they go, with no clear plan of action and little help along the way.
In an ideal situation, every company would have a full team dedicated to managing the company’s entire workforce—including employees on international assignment, business travelers, remote workers, and hybrid workers. This team would be responsible for knowing where every employee is, how long they have been there, and what job they are performing in that location. They would then be tasked with creating a policy and approval process for employees who want or need to work outside of their Home jurisdiction. Also, this policy and approval process would consider the many different tax laws and compliance requirements of each jurisdiction.
However, companies usually don’t have a full team dedicated to this process. They may have one person who manages and oversees the workforce while performing all the other functions of that department. When this responsibility falls to one person who is then pulled in several directions and serves many functions within the company, it creates challenges, stress, and risk. They don’t have the time or resources to consider all the necessary obligations when they have employees in multiple jurisdictions.
The employer has a duty of care to provide for the safety and security of their remote workforce but struggle to know where everyone is working.
At some point, every company that has mobile employees faces the question of “where are all of my employees located.” This issue has been amplified by the upward trend in remote workforces. Knowing where their employees are—and what they are doing—has leapt to the top of the CEO agenda. Many questions come to light in the face of a remote workforce, especially when you are unsure where they are located:
- Do you know what job functions your employees are performing?
- Are your employees productive and motivated?
- Are you ensuring the safety and wellbeing of your employees?
Historically, companies could rely on some form of travel booking system or emergency planning technology to locate their employees who were on business trips. However, what if employees pay for their personal travel or fly to one location and then drive to other locations? In these cases, travel booking systems won’t identify their locations with certainty. Additionally, companies may have also relied on their HRIS system to locate their employee through a home address. However, this has morphed into something far more complex.
With some employees working remotely, some working on a hybrid model (in office and at home), some working as commuters, and some who may be on an international assignment, the need to know where everyone is located has added another layer of complexity within the business.
The need isn’t limited to just managing the risks associated with matters such as tax and payroll compliance, corporate presence in another jurisdiction, data privacy and employment law, but also in managing and ensuring the health and well-being of your workforce.
With employees theoretically working wherever they choose, companies must consider duty of care—the legal and ethical obligation that employers have to ensure the health, safety, and well-being of their employees. This could include local-level health and safety regulations (e.g., OSHA in the US) either with a US state or another country, workers’ compensation coverage, or other personal regulatory compliance, such as immigration and tax compliance.
HR and mobility teams don’t have an integrated technology solution that provides good data and actionable advice.
Virtually all companies with a mobile workforce require technology to assist in managing their mobility program—and in the age of virtual assignments and remote workforces, technology is even more important. This technology may include features such as dashboards that allow you to monitor an employee’s tax information in near-real time, portals that enable your taxpayers to upload tax documents, and tracking capabilities that assist in monitoring employee locations. But just having up-to-date access to this information is rarely a complete solution to the tax compliance issues that often accompany a mobile workforce.
Having an integrated technology solution, one that not only provides the data, but also helps you understand it and is integrated throughout your program, teams, and vendors, is crucial to the success of your rapidly growing mobile workforce. A technology solution should help you assess current risks your workforce is creating, find gaps in your compliance program and mobility policies, and provide automation for things like approval processes that enable mobility managers to focus on other important matters.
What actionable things can you do now to help reduce the fatigue?
We know challenges with a remote workforce arise when there is no dedicated team to manage remote work requests, when the company is unclear how they should handle these requests, and/or when there is a lack of data and reporting with no clear plan of action when there is data. So, what can be done to combat this?
Get support from your senior leaders.
Most C-suite executives know that remote and hybrid work is here to stay and want to provide this flexible benefit to as many employees as possible. However, they don’t always see the pressing reasons to align with HR on these employee mobility issues. Here are some key actions for your senior leaders to consider:
- Let company priorities guide efforts. Companies generally have three broad priorities fueling their policies: employee experience, cost reduction, and corporate compliance. By determining your company’s biggest concerns and setting priorities accordingly, you narrow the scope of responsibilities—making it easier to drive remote work policies and processes that promote your company’s goals.
- Designate a remote workforce project manager. To lay out expectations for employees and push mobile work policies forward, it’s important to assign a project manager. This is likely someone in addition to your existing HR or mobility manager. As remote work requests remain high and employees come up with inevitable questions, this project manager will spearhead new initiatives and help identify what processes your employees need.
- Give your project manager support. It doesn’t matter how capable your remote workforce project manager is, they’ll need support going forward. Addressing remote work requests on a case-by-case basis creates a bottleneck in HR. Let your senior leaders know that to properly manage mobility tax issues arising from remote work, your project manager and HR leaders may need to consider a myriad of functions, including immigration, corporate tax, employment tax, retirement benefits, and other areas that are outside their expertise. It will be important for your project manager to build a cross-functional internal team that can address all remote work compliance issues. This team will need to include managers, who will ensure their employees are getting approval from the project manager, prior to making plans to work remotely. Additionally, it is critical to give the project manager the budget they need to bring in external vendors to address the complex mobility tax and regulatory issues that come with a remote workforce.
Communicate often with other teams and departments.
HR departments are often unaware of the intricacies related to the company’s reporting needs when employees
move—whether on a permanent basis or when their jobs require them to work in multiple jurisdictions. Getting relevant teams together so you can establish a plan, implement a process, and work together to make it successful is an essential first step in managing your obligations.
Understand what each team has responsibility for and access to, and then bring the teams together to see the full picture.
- The HR team has responsibility over where employees are residing and working and whether new employees are being hired remotely.
- The mobility team has responsibility and insight into which employees are moving, where employees are moving to, and the length of stay in each location.
- The equity team has responsibility over the withholding of shares to cover taxes and providing informational reports to payroll as well as the brokerage firm.
- The payroll team has responsibility over the global reporting for compensation and tax withholding.
- The benefits team has responsibility over what benefits the employees are eligible for, which can differ by the location of where they are working.
- Other teams, such as the corporate tax team and finance team, have responsibility over and interest in permanent establishment, transfer pricing, chargebacks, and accruals and should also be brought into the conversations.
Work closely with your global mobility tax provider to create a remote work project roadmap.
We created a remote workforce checklist that will help you understand key issues to consider for your remote workforce program. By thinking through these questions, you will be able to understand the key issues for your remote workforce plans, identify potential tax compliance gaps, and determine next steps for implementing a process to minimize your compliance concerns.
Create a remote workforce project timeline.
We work with many of our clients to create a project timeline for their remote workforce plans. We use a phased approach with our clients so we can address their immediate needs and spread out the less critical ones over several months to help with time management and staffing levels. Our roadmap is structured like this:
- Phase 1: Review current policies and documents, draft proposed edits, and identify business risk, mobility tax concerns, and payroll issues.
- Phase 2: Deep dive into the specific issues that have a high business risk, work with the company to decide on risk strategy and risk culture, provide options on mitigating risk and improving process.
- Phase 3: Implement process changes, update policies, and draft tax guides and FAQ documents based on company requirements and decisions.
- Phase 4: Provide ongoing support and review to ensure policies are working as intended and processes are being followed.
Consult with your mobility vendors.
Your external mobility vendors such as your mobility tax provider, relocation management company, and immigration firm are well versed in remote workforce scenarios. While there is no one size fits all approach to developing full policies around this new normal, these firms are a good resource to help guide you through some of the considerations, which will in turn help you. They work with many clients of all sizes and across all industries, so chances are they have worked through some of these questions and have developed best practices. Lean on them to help you develop policies that will work for your program, your company, and your remote employees.
Download our Outsourcing Evaluation Checklist for Your Mobility Tax Program for considerations at each step of an international assignment and to help you determine when you should bring on an outside vendor for support.
With proper planning, communication, and support, there is a lot that can be done to alleviate some of the stress HR and mobility managers are feeling as it relates to a mobile workforce. GTN is here to help. We assist clients in working through the intricacies of building, implementing, and retaining a remote workforce program. If you are looking for guidance in building a policy, creating automation around an approval process, or in addressing your compliance concerns, schedule a call with our team.