As travel restrictions start to ease up, I have received several questions about employees requesting to work remotely from another state or country. In fact, I recently saw an ad from Puerto Rico looking to entice employees to come and work remotely at a “workation.” The advertisement, hoping to help weary workers address COVID-19-related burnout and their well-being, had a beautiful picture of a beach villa; the article also mentioned staying in a floating villa—I could almost feel the gentle breeze and soft waves crashing on the beach. The advertisement highlighted the fact that Puerto Rico follows U.S. employment law. With so many employees still working remotely, why not head to a tropical island?
The interest, however, is not limited to U.S. states or territories. What if an employee wants to pull up roots and work outside the United States? Is a visa required? Will the employee pay local taxes? Will the employer need to register as a foreign entity? The answers differ for each country and their willingness to open their doors—or relax their rules—for remote work.
Several countries have launched comprehensive programs for travelers wishing to work temporarily, with some offering yearlong residency certificates for “digital nomads.” But while many people romanticize the idea of teleworking from another country, in reality, it could catch the remote workers off guard. Taxes could be assessed in both the home and host country; there could be minimum salary/bank requirements; and while the world is still dealing with the COVID-19 pandemic, some countries may have greater restrictions related to travel or quarantines. So before researching that out-of-the-way cottage or metropolitan flat, make sure you check on the travel or work visas, taxes, and any other financial obligations which might arise with work performed in another country.
If temporarily relocating to another country is not your thing—but checking out one of the awesome states in the U.S. is—this could be a great way to get that long-needed work break without actually taking a lot of time off (win-win for employee and employer). But don’t assume remote work from another state may not trigger tax obligations, unemployment, overtime and workers’ comp, though. Usually, local employment laws apply in the state where an employee works.
If you want to know more about remote-work arrangements or have other HR questions, we’d love to help! Give us a call or send an e-mail. We’re also available by chat. It’s one of the best benefits of SHRM membership!
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