The pandemic has changed the paradigm of the workplace going forward; from how much physical office space will be required, to the need for organizations to function with a remote workforce. We will likely see more employees looking to relocate and/or continue working remotely post COVID-19. Family considerations, a desire to live in a specific location, partner relocation, etc. are some of the reasons why an employee may consider moving to another state.
There are several things an employer should consider if they want to continue the employment relationship with an employee who wants to relocate to another state:
- Company equipment: Employees may take their current equipment with them and ship it back if they leave the company. Depending on the age of the equipment, you may consider letting the employee buy the equipment at a nominal amount upon termination, especially if the equipment isn’t worth shipping back and likely wouldn’t be reused. Please work with your IT team to have the equipment wiped of confidential/proprietary information.
- Expenses: Some companies will reimburse expenses like phone and internet connections and office supplies/equipment. For example, California requires employers to reimburse employees required to work from home “all necessary business expenditures or losses incurred by the employee in direct consequence of the discharge of his or her duties.”
- Payroll: Companies will need to register as an employer in the new state where the employee is based. Each state will have different requirements as an employer and a business. Employers need to pay the state taxes like state unemployment taxes. It is recommended to talk to your CPA about business registration requirements.
- Employment Regulations: Various states have different wage and hour regulations and employment laws that differ from Oregon. For example, California has different overtime regulations as well as PTO requirements. Be sure to educate yourself on the wage and hour regulations and employment laws in the state your employee will be residing in.
- Workers Compensation: You will need to add the new state to your workers compensation plan. A lot of employers miss this step. If your current carrier doesn’t insure in the new state, you will either need add another carrier who does cover that state, or change carriers to one that covers both states.
- Benefits: You will want to check to see if your current health plan covers out of state employees. For example: Kaiser only operates in specific states, but they have an out-of-area plan that can be added on. If you are on Regence BCBS or United Healthcare, they are national plans and cover employees across the country. Some carriers are more local, so you will want to check with your benefits broker.
- Disability Insurance: Some states like New York and Hawaii require short term disability policies. This is commonly missed by employers. Please check for disability insurance requirements in the new state.
- Time Zones: Will it work if the employee is in a different time zone? What if the employee is going to be on the East coast and you are on the West coast? Is the employee going to be able maintain the same business hours as the home office?
After reviewing this list, your first reaction may cause you to say, “Ugh this is too much and not worth it!” However, if the employee is a strong performer and solid employee, these factors are far less effort than the process of recruiting and training a new employee.