Remote work has potentially created major tax and regulatory compliance risks for companies since the pandemic began, according to the results of a survey by talent mobility platform Topia. The survey, which gathered responses from 1,250 employees across the US and UK, found that 28 percent of employees who were working remotely during this time actually worked outside their home state or country during 2020—and most of them didn't bother to report it to HR.
This is despite 61 percent of all employees being aware that if they work outside their home jurisdiction, they could be creating tax and compliance implications for their employer, ranging from issues with payroll taxes to questions of employment rights and possibly even making the organization subject to additional corporate taxes.
The survey also turned up a gap between employee behavior and HR expectations. 93 percent of HR professionals surveyed said they are confident they know where most of their employees are working, and 78 percent said they are confident that employees who work outside their home jurisdiction will report it. Furthermore, HR professionals themselves are apparently contributing to the compliance risks: 42 percent have worked outside their home jurisdiction, far higher than the average, and they are not reporting it either.
On the bright side, the survey also found that over 90 percent of employees are comfortable with letting their employer track their location at country, state, and city level. 81 percent are apparently even comfortable letting their employer track their location right down to street level, suggesting that they are happy to let the employer monitor their movements between jurisdictions and, presumably, tell them to go home if they are in a country where they shouldn't be.