Due to COVID-19 and the sustained impact, your company has made the decision to continue to allow employees to work from home going forward.
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 for the next several months, while others have chosen to work in another country.
Your mobility tax provider informs you that your remote workers are potentially creating reporting and withholding tax risks and compliance requirements for themselves and the company when they work outside of their Home jurisdiction. You now realize you need to know exactly where everyone is working so you can begin to address any potential compliance risks that are arising.
Your plan of action is to not only create a tracking process so you can understand where your employees are but to also create an approval process whereby anyone who wants to work remotely must request approval before doing so. You have no idea where to start or how to set up a tracking process or what to include in 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 year, there has been a huge uptick in remote workers, causing workloads—required to manage this population—to increase significantly. Couple this with a current 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 are hearing in the marketplace is that HR and mobility managers are overwhelmed and struggling to deal with the new future of remote work. All of this, plus the continuing COVID impact, is causing more than just headaches. Here is a sampling of the feedback we have recently heard:
“I feel like I am stabbing in the dark when it comes to my mobility program.”
“I don’t have the answers for the questions I am getting from my employees.”
“I feel like I am up against a wall.”
So, what can be done to reduce this stress? Below we look at some of the issues facing HR and mobility teams and some actionable ideas that can be implemented to help.
What are some of the issues HR and mobility managers are facing due to this 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”—essentially 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. This team would then be responsible for creating a policy and approval process for employees who wish to or have a need to work outside of their Home jurisdiction. And 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 obligations necessary when they have employees in multiple jurisdictions.
HR managers need to provide a duty of care for 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 was amplified by the pandemic and now with companies adapting to the future of work and 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 fully remote workforce, especially when you are unsure where they are located:
- Do you know what job functions your employees are performing?
- Are your employees being 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. 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 action isn’t just to manage the risks associated with payroll, corporate presence in another jurisdiction, social security, data privacy, employment law, and insurance, but also to manage and ensure 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 employees’ 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 enables mobility managers to focus on other important matters.
What actionable things can you do now to help reduce the fatigue?
We now know challenges with a remote workforce arise when there is no dedicated team to manage the remote work requests coming in, the company is unclear how they should handle remote work requests (i.e., no defined policy, no defined approval process), or when there is a lack of data and reporting and 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 the remote work revolution is here 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 right now. 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 ramp up 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. Additionally, it is critical to give them 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 of 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
- 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 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 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 adhered to
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. 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.
In the end, the pandemic has fatigued almost all of us and is, unfortunately, not over yet. However, 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 help clients work through the intricacies of building, implementing, and retaining a remote workforce program. If you are looking for assistance or guidance in building a policy, creating automation around an approval process, or looking for help in addressing your compliance concerns, schedule a call with our team.