It’s time for tax and mobility professionals to brace for change. The pandemic has accelerated remote workforce trends, and working from anywhere is becoming a baked-in feature at companies. For accounting offices and mobility leaders, the realities of managing a remote workforce, both positive and negative, are setting in.
To stay compliant and avoid tax violations, it’s time for tax and mobility professionals to step back and examine the pros and cons of the remote work landscape. Fortunately, with those pros and cons front and center, it’s possible to establish a plan that will help companies navigate the tax and compliance risks popping up from a massive uptick in remote work.
The general workforce has been advancing toward more remote work throughout the last decade. However, the pandemic threw that shift into high gear. According to
Possibly more important for policymakers, the move to more remote work appears to be much more than a fad. According to a recent
For tax and mobility professionals, there are both pros and cons arising out of this seismic shift, but if leaders want to avoid violations and capitalize on advantages, change will be essential.
Corporate advantages of remote work
Many corporate leaders are quickly realizing remote work isn’t just a perk for some employees. If leveraged the right way, it can spark substantial advantages for businesses. Here are a few incentives that suggest business leaders may want to continue to adopt more flexible work policies:
Remote work provides a competitive advantage. Employees are starting to realize a broader scope of benefits that spring out of remote work, and flexible work is becoming extremely popular. Buffer’s
Corporations can save money. Physical office space and equipment can make up a massive chunk of a company’s budget. Remote work presents an opportunity for corporate leaders to drop their leases or downsize offices — and increase their company’s bottom line.
Companies can dip into a global talent pool. When employees don’t need to be tied to a physical location, it can burst the talent pool wide open. A more remote workforce means talent managers have more candidates to choose from and a more diverse set of perspectives to bring on board.
Tax and compliance dangers from remote work
With the pandemic springing up unexpectedly, many corporate leaders rushed to create remote work policies. Now, the full organization, and especially tax and mobility professionals, are seeing heavy risk exposure. Here are a few concerns developing on the horizon:
Duty of care may suffer. The surge in remote work has left employees scattered across the globe, and many company leaders don’t even know where employees are. That’s a bright red flag for compliance leaders who are tasked with maintaining the safety of employees. If a natural disaster strikes, political unrest bubbles up, or another emergency surfaces, companies with even the most thorough emergency safety plans in place won’t be able to act if they don’t have a handle on where their employees are located.
Tax violations may occur. When employees flow across borders, be it domestically or abroad, it can trigger tax obligations that become complicated quickly. For instance, with the
Whether employees are working in multiple states/provinces or traveling between countries, they could be putting the company and themselves in danger of tax violations, legal fines and/or reputational damage.
Departments may become overwhelmed. When it comes time to manage remote work, it’s easy for lines to become blurred between tax, payroll, HR and other departments. For instance, if an employee is hopping between countries while working, a tax or mobility leader may need to understand everything from value-added tax and visa requirements to country-specific social security laws and global equity compensation best practices to reduce risk. This, on top of managing remote work requests and policy, can cause leaders to be overwhelmed fast.
How tax and mobility professionals can embrace change and avoid risk
Although there’s uncertainty looming, there are several best practices tax and mobility professionals can pick up to avoid headaches and protect the business as remote work grows:
1. Start tracking employees. Simply put, it’s impossible to keep employees safe and tax compliant without knowing where they are. That’s why the first step in building a better remote work policy is finding out where employees are working, how long they’ve worked there and where they’ll be going in the future.
2. Reset remote work and travel policies. Remote work policies provide scaffolding that simplifies decisions and puts employees in a position to minimize risk. To get started, leaders need to define what it means to be a global employee at their company. From there, they should decide what types of remote work, country or regions are off limits. This will set a foundation to create a more extensive set of rules to place global workers in a more manageable situation from a tax and compliance perspective.
3. Don’t be afraid of technology. Technology can lighten the load of tax and mobility leaders and help keep track of employee information. The technical solution may mean leaning on software that identifies risks or a centralized database that funnels information into a single spot. In any case, technology won’t solve all problems on its own, but it can be a lifesaver when paired with effective policies and processes.
How tax and mobility professionals can be proactive
With remote work taking root, now’s the time for company decision-makers to revamp their remote work strategies. By tracking remote workers, rewriting policies and procedures, and implementing technology, tax and mobility professionals will have the tools to tackle the remote workforce revolution. This proactive approach is a necessity to avoid tax and compliance pitfalls and squeeze the most value out of the rapid move toward more flexible work.
