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Comment by chrischen | Hacker News Reader

Have laws caught up for this new way to work yet? Last ai checked there are non-insignificant legal and tax issues for small businesses to have employees in other states.

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The short answer is no, they haven't. Payroll for something like this is a huge pain in the ass if you're not at this kind of scale. You end up just hiring people as contractors, which has its own set of problems (namely the fact that you can't just do that because it's easier, they have to actually be contractors and not employees).

Or you literally just use a PEO and let them handle it for you. It's not that hard.

Seriously, Office depot will handle it for you for $6 an employee per compensation period.

Do you have a link for more information on this? I'm curious and would like to look into it.

https://officedepot.company.com/payroll

Not sure the pricing structure, but I remember office depot having an advertisement, it was probably like "As Low as $6" per pay period. Ths site says $70 a month but that's probably the minimum for the whole company. Then per check fees.

If you have an employee in another state, you are usually required to incorporate or register with the state and then do the filings for that state. I don’t think this office depot thing handles that part for you. In fact, not even Gusto did this and that’s one of the reasons we had to switch to a PEO instead.

I actually use a PEO, but there are still random things to take care of for random states so it doesn’t solve everything.

In the US, the tricky/potentially expensive part is understanding what labor laws you need to adhere to and what taxation issues you might be creating when you hire someone in a new jurisdiction.

No, laws haven't yet caught up.

A good example is working remotely in another country. The US does not allow foreigners on a visitor visa to work remotely. It's a bit of a gray zone, since if you fly into the US for a business meeting, that's not regarded as "working in the US". But flying in for 1 month and working remote the entire time is.

Same with California income. Working in Nevada and then decide to work remote from California? That's CA income and taxable by CA. But of course people rarely even mention they're working in another state and rarely pay taxes owed.

There are companies like TriNet that hire your workers directly on W2 and administer all the payroll and benefits for you. You then just pay TriNet directly instead of doing payroll yourself.

Insperity is one such company--my clients typically have employees in multiple states and we just handle all the details for them. https://www.insperity.com/bpa/zac.mutrux

I'm surprised no one has mentioned corporate tax yet. A worker in a foreign country (potentially) exposes the home company to corporate tax by the foreign company. Ianatl and there are probably a million caveats, but I've had multiple companies and tax people warn me about this.

Imagine Apple USA being taxed by New Zealand, for example. That's the main reason Apple employees are employed by Apple NZ

Yep all of those sweet, sweet nexus events cramping would be remote employers' and e-commerce tycoons' style will keep tax professionals highly paid for years and years.

Judging by my employer, small businesses are able to have their payroll companies take care of all that hassle without much cost, so it’s not really a problem.

It depends on scale. I moved during my last job, post-COVID, and the HR department has to make sure the state I was moving to was approved. If not, I was going to have to switch to contracting (fewer hours, fewer employer/employee type rules, more rigidly defined tasks, etc.) because the cost of setting up payroll and taxation in another state was too onerous for just one person, even at the higher levels of the development staff.

Your company could've solved this with using a solution from ADP, gusto, rippling, and the shit ton of other companies to do this.

They used ADP for payroll. I have to believe if it was as simple as checking a box they would have just done it.

That's just HR being lazy. The process for handling it is an afternoon of filling out some state forms and handing them off to the payroll company.

I am the employer, and it is a problem even after using a PEO. Plus, having an employee somewhere creates a nexus which is another whole set of problems.

Add to that health insurance in the US.

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