Some WFH employees now live in another country
vice.com
vice.com
- People's attempts to hide their remote lifestyle are mostly laughable. You don't need sophisticated tooling to know that someone isn't where they say. I see you every day. I can recognize patterns. I can see the changes in work hours, response times and just general behavior. I can tell when you have just rolled out of bed with a coffee or come back from the club.
- Most managers I know don't give a shit. In fact we'd rather not know at all. It's really HR you have to worry about (and I'm not going to tell them unless you give me a reason to).
- HR itself only cares because of the tax implications. Inter-state taxes are bad enough, figuring out international ones are basically impossible. The company can get into major trouble if they are not following local employment laws, and "I didn't know my employee lived there" isn't a good enough defense.
- For those saying "IRS will come after you", these remote employees are paying full federal, state (mostly CA), payroll and various local taxes while using none of the benefits. The government is probably ecstatic that such people exist.
- The government on the other side is the one you really have to worry about. Locals in Mexico City, all over South America, Bali, Thailand, Vietnam and really all over the world are pissed with these "digital nomads" (read: illegal immigrants) who work on tourist visas and upend the local economy while paying no taxes. It's only a matter of time before they all start cracking down.
Wait, aren't digital nomads literally bringing money in from another country? They pay taxes on everything they consume, yet they don't take the money from inside the country, they bring it in from the outside.
Why exactly would they be pissed?
That foreign money mostly goes to a handful of landlords/Airbnbs and tourist-friendly businesses (which are often foreign owned themselves). That in turn drives up prices of everything for locals – who are seeing no increase in income and moreover have to pay income tax and a ton of other taxes on it, something that digital nomads conveniently skip.
An influx of foreigners and foreign money isn't automatically welcome in a local economy.
If one or two digital nomads move in, the locals won't care much and the nomads will just become one of the types of people they have.
But if a town becomes infested with them, it can cause all sorts of issues (the nomads won't care about food prices because they can afford US prices, which are 10-100x what the locals have been paying, so prices can suddenly skyrocket).
Hell, you have it inside the country: https://www.mercurynews.com/2017/07/03/go-back-to-california...
And it's not always where you think it would be.
Tourism has done similar things to cities around the world; turning what used to be actual functioning cities into amusement parks for adults. Venice might be a good example, some say.
I used to make the same argument, but it's just so convenient when it's easy to forget that there is a reason why income tax exists on top of VAT in the first place. And that's because VAT doesn't cover all of the budget expenses.
So you pay your hefty income tax back home, and only pay VAT on the products and services provided by (private) entities. The proportion of the budget not covered by VAT is covered by the locals and their income tax. That's not OK.
Same reason why the most touristy places impose additional tourist tax.
Though in my opinion this financial arbitrage is simply inevitable due to the housing market in Western countries being overinflated by investors.
You can't simply unilaterally declare that sales tax compensates for everything you do, and think laws don't apply.
One of the biggest examples would be in real estate, where foreigners could be comparatively very wealthy compared to locals, and can thus out compete locals and dramatically raise the price of real estate.
This is why some jurisdictions that found that the amount of properties being purchased by foreigners was becoming startling have brought in foreign buyer taxes to try to even out the distortions in the economy and make it more fair for those who earn their incomes in the local economy.
Not quite. They do bring money by buying things and paying sales/VAT tax. However, they don't pay income taxes because in 99/100 times they are not allowed to work, so they are illegal immigrants essentially.
They also come with their LA salaries and make renting/buying harder for locals.
I know people who do that in Thailand on tourist visa, and just have a short vacation every 90 days to qualify for new tourist visa.
While it may be the case in other countries, Mexico has fairly straightforward laws that allow you to work remotely for up to 4 years without paying local income taxes. Basically, as long as you have a stable job outside the country, you are fine.
The mood among some Mexicans may be negative, but for the most part Mexicans understand (thanks to a long experience with tourism) that foreigners bring in the big bucks. And this is good for us.
I write software for pay. That's it. I don't see my employer as a boss - they are a customer. If they aren't happy with the product, they can find someone else and I can respond to the other 50 LinkedIn requests...
I wouldn't work from e.g. Iran, or you could get sued to death when your customer is indicted for violating US sanctions, but yeah why would your employer care?
Oh, because maybe they have various insurance and partner contracts that speak about your physical location.
If your contract doesn't say where you are, then work from anywhere, and follow whatever laws.
If your contract does say where you are, then violate the contract an your own risk.
Mexico is really very lax about what you are allowed to do while in Mexico on an FMM and the fee for one isn't very much at all. But what you can't do is stay past the departure date on the FMM which cannot be more than 180 days from when it was issued. INM agents used to be very willing to just put the full 180 days on every FMM but lately are asking questions about your return plans and only giving you shorter time periods. Apparently there were a lot of people who were living in Mexico and basically going to San Diego at the end of their FMM, staying a few days, and then reentering on a 180 day FMM to return to where they live. This has always been against the rules but I don't think INM really cared that much until recently, because the number of people doing it increased greatly.
costa rica visa is 90 days maximum for starters
'expats' are very entitled; they want all the conveniences of a 'third world country' (they will call it 'shithole' when their n-th consecutive entry is denied) they want all the cheap rent;services;food ; they want to use the roads; sidewalks; beaches; national parks; police; emergency services but god forbid you ask them to pay income taxes as a local if they are going to work from their host country ' it is preposterous; i already paid 10% vat on my 2 dollar frapuccino'
Our payroll app needs to know what days you are working from home. This way, if you work in one county and live in another, the county you live in will get their share of the income tax.
I think this is going to be a huge problem in a year or 2 when cities & counties see a large drop in income and try to figure out how to "fix" it.
The biggest risk is the remote country coming after the employee and/or employer. If you are the employer, and you are 100% sure you are never going to do business in the country, you MAY be ok. However, there are tax treaties at play as well and that can complicate things.
If the remote country goes after the employee, it may get ugly especially if the employee is still there. That indirectly also impacts the employer.
So if you or your employees are going to work from a different country, read their regulations and be very careful about staying longer than the time period that they consider you a resident for tax purposes.
This is quite an interesting space for some future startup.
Brazilian here. At least on the part of South America that I know that well (a little more than my country), nobody gives a shit.
Are the governments really that upset with illegal immigrants that (typically) don't commit crimes (aside from immigration/taxes) and spend (by local standards) crazy amounts of money in the local economy?
Thailand explicitly gives out digital nomad visas for this?
I understand how that might eventually upend the local economy - it's called gentrification and while digital nomads certainly contribute to it, it surely can't be fully blamed on them. Places where people want to live at will eventually get gentrified in some shape or form.
The logic behind labeling digital nomads as illegal immigrants completely eludes me. I genuinely don't understand why you would make that assumption.
Close to 100% of them are on tourist visas and are explicitly not allowed to work in the country. What else do you think an illegal immigrant is?
Can you share the source for this data? I find it exceptionally difficult to believe.
I do not condone people doing anything illegal. But you can maintain the lifestyle of a 'digital nomad' while not breaking any laws whatsoever. I definitely do not believe that 'close to a 100%' of people would risk their jobs, the wrath of the tax man and potential prison time by not abiding by the relevant legislature, especially given that there are usually many available options.
But it entirely depends on local laws. Canada allows you to work for non-Canadian company that has no business in Canada. Things, a bit more complicated when you sell goods and services in Canada, though.
Spain has new digital-nomad visas that allow working in company that aren't in EEA. Before that, like many others EEA countries, they didn't allow working on tourist visa.
It's not about whether you're working for a Mexican employer or not when you're in Mexico. It's about whether you're working at all.
That can depend on how/where they're staying. If they're at "home" abroad, with a similar time zone, then there's often no way to tell except technically.
I have a team mate who often spends time across the border for weeks at a time. We wouldn't know if she didn't mention it.
We are in the EU though, so working from other EU countries is fine, within limits.
If you go too far of course, then your workmates might notice that it's winter when it should be summer.
And anyone with the login details can see where your login pings are from.
Now, it's hard to attend some meetings when time difference is very dramatic, like it's 1am in your local, but 10am at work HQ.
> If you go too far of course, then your workmates might notice that it's winter when it should be summer.
Doubt. Most of my co-workers use virtual backgrounds. I wear the same home clothes the entire year.
> And anyone with the login details can see where your login pings are from.
Good luck, I have a WireGuard box at my parent's house that I route my work traffic through when needed. Maybe I should start a business of hosting "residential" VPN exit nodes...
I am curious as to how. Working from home, no one has ever seen the inside of my home. Much less outside of my window.
The temperature of my office is stable through the year.
I can think of fashion colour schemes, makeup and tan. But that would require a lot of observation and not everyone changes those each seasons.
To me, someone like that has demonstrated that they can’t be trusted and I would remove them from the business ASAP.
You can fix a lot of things with an employee/employer relationship, but those things require trust. You just don’t ever know where you stand with someone who lies.
From what I understand, that's most job interviews. If someone has very little practical coding skills, but is a LeetCode ninja, then you get what you ask for, I guess.
I don't lie, but it also seems to make me unpopular. Fortunately, I don't need the work.
[1] https://www.indonesiaevisas.com/news/digital-nomad-visa [2] https://nomadgirl.co/thailand-digital-nomad-visa-what-is-the...
I don't need to know anything about laws governing manufacturing to purchase a screwdriver made in California. I only need to know my own laws.
Is it legal to import screwdrives in my jurisdiction? Yes. Can I do this transaction without violating my own sanction laws? Yes
That's it.
Whether the California entity is allowed to sell to me is their problem, not mine.
The same applies for labor. I want to buy foreign labor? I negotiate the price, I get the work, I pay the invoice.
Which laws do I consult? Every potential country-to-country mix in the world?
No, I consult my own laws.
Is it legal to purchase foreign labor/services. Yes. Can I do this transaction without violating my own sanction laws? Yes
Whether I buy a website or a screwdriver - I do not need to know anything about who I'm buying it from beyond the necessary information to avoid international sanctions.
Also your employer needs to worry about this. And therefore you need to worry about your employer suing you.
If you think that's far fetched, do you think your employer will NOT throw you under the bus when France sues your German employer for turning a blind eye to where their employee is?
Frankly as a tech manager YOU are adding legal risk to yourself personally by protecting the employee from the company. Arguably YOU personally are complicit in tax fraud.
P.S. I used to be a lawyer and I can weigh the risks. Completely negligible compared to all the other risks I have as a founder.
"I don't understand. All I did was get up in the morning." line from The West Wing from a similar circumstance when the council threatened jail time for not reporting someone.
For better or worse there are very real tax issues associated with employees working in states and countries different than what their employer and government believes. A lot of these folks are knowingly or unknowingly dodging taxes in a way that is going to have severe consequences for them and company.
Establishing a tax base in a new city or state can put a company on the hook for thousand if not millions of dollars worth of additional taxes. And for the worker if you’re company isn’t withholding the right amount of state federal and local taxes you can find yourself with a huge tax bill at the end of the year.
It is a little bit easier for international hires if they are just doing contract but even then things like W8-BEN etc come into play and dealing with IRS is always tricky and risky.
Honestly, if we are going fully remote (anywhere,anytime), we almost need a multi-national agreement/treaty so that employers are not left trying to deal with BS stuff. And no, services like Deel/remote.com are not enough.
So if you live in Wisconsin but drive to Minneapolis for work each day, they know how to handle it.
We need more of those and closer to pairings for all states to make true "work from anywhere in the US" possible. I doubt it'll happen, because the states won't agree on the baseline level.
It's not limited to employment, either. Create a SaaS or other internet-based business and try to serve customers outside your nation. Or even outside the border of your state/territory/province. Entire services such as Paddle exist just to deal with this. But I suspect most people are trying to fly under the radar here using regular Stripe, etc. and not dealing with any of it, just like digital nomads do.
I hired a bunch of people outside the US and it's not a problem. Use Deel and hire them as contractors. Make the contractors fill out W8BENs. Don't let the HR folks and lawyers scare you - they don't understand risk vs reward mentality of a startup founder.
You may want to double check this. May be your HR System filed stuff on your company's behalf but you absolutely need to have a setup in the state where your employees work and that includes Florida.
He's leaving to work for a friend's startup and I hope he gets rich.
This doesn't make sense.
Is there a specific rule anywhere federally that any US state that says you must be aware at all times where your employees are when spending personal (non-work) travel time?
Moreover: 1) Can a state with no tax nexus to the firm (until the employee moved into it) have some kind of enforcement mechanism on the company ?
If (1) is no, and it comes down to a judge, 2) is there any case law that shows what is reasonable ? Does employer need to check every month ? every year? 3) Does a company have any responsibility if the employee lies ?
First, the employee (not the company) is the willing participant with the state benefits and obligations.
If the employee was hired in AZ, and never changed his tax residency to say CA with employer, why would employee be able to claim protections given by CA? If employees are going to play the game, they should be OK with the consequences.
Second, company level agreements don't work this way. Why should tax nexus ? For examples a company is based in CA, so it states its legal venue is in CA for contract disputes. Company then moves to FL....The tax residency change does not give the company the right to to update its legal venue to FL for convenience with its contractual counterparties.
So then, why can states break basic contract rules, which we hold sacrosant at the company-person level ? And what regulation exists to entitle states to pursue companies that do this unwillingly ?
There are laws that state you must pay taxes, not discriminate, etc.
What are the laws that mandate companies to know where your remote employee is working at all times ?
Should a company need to know the rules of 50 different states at all times, to know if they must check employees working offsite ? And how is a company subject to a jurisdiction's rules that it does not know it is party to ?
We have established that during onboarding a person enters their home address.
My question is different.
What sort of regulation or mandate forces an employer to keep checking over the employee's shoulder? And how does reasonable get defined in this context ? In other words, what mandates exist for companies to force them to play big brother , and also define what tests must be done when playing big brother ?
And why does the employer come in defense of a state with which the company has no tax-nexus otherwise?
May be, may be not but in practice, you are not going to be able to tell IRS or another compliance org. that sorry, my employee lied so it's not my problem. As the employer, you are still on the hook for any taxes and other compliance related issues regardless. You can sue your employee may be later but that is not going to save you from the wrath of Uncle Sam and others.
I signed up for your job in a certain location and a certain date. That doesn't entitle you to keep track of where I am the rest of my life. As long as I'm able to be reached at the initially agreed upon location, regardless of how I maintain that communications channel, I never agreed to let you dictate where I live and move to and frankly nobody has that right.
Or is my body my choice just a convenient catchphrase for one topic only?
Pretty sure some countries are doing this already.
There's quite a few now, something like 33 countries with these visas. The terms tend to vary. I took advantage of the first one, the Barbados digital nomad visa which they created to work around the loss of tourism due to COVID. Since most taxes in Barbados are sales taxes and they have a peg to the US dollar it has worked well for them in terms of foreign currency reserves and supporting the tourist industry during the pandemic.
Other countries like Costa Rica require visa holders to pay local income tax which is fair enough while others don't or have a reduced rate.
I'm unsure of the overall morality of it but it can be done legally through the correct pathways as I have been doing.
I don't like that people will just do it on tourist visas instead though which I'd guess is the bulk of the objection to it.
In my head we all pay the dues somewhere in some form to begin with - property taxes, sales taxes, income taxes etc.
It’s one thing if you’re avoiding paying those.
but how is it different that Twitter gets a tax write off to move to the Tenderloin. and if Joe/Jill chooses to move to the suburbs or temporarily move to Mexico while still paying state and federal income tax. sure there maybe some property tax loss but isn’t housing crisis already an issue? don’t company incorporate in Ireland to pay less tax?
It's only going to get worse as the differentials increase.
Companies moving to Ireland IMO are definitely exploiting tax loop holes and committing fraud. You and I and all of the countries devoid of tax revenue are hurt by companies benefiting from tax-avoidance loop holes.
Real answer: The "software engineering perspective" you have here is irrelevant to tax/immigration law. Taxation is based on where you live and work (physically). And countries very much get their say on whether or not they'll allow you to live there, for how long, and for what purposes.
This isn't about an individual's right to free movement. It is about keeping employers honest about where their employees work and making sure they are paying their fair share of local taxes.
Groups of people put a strain on the local resources, we need those local taxes to fund those things.
If individuals were allowed to live somewhere and dodge the local taxes, every large company would use this to their advantage. Suddenly campuses of workers would all now be "remote" employees from their offices in some tax friendly area. This would put an undo strain on the local tax base who are now having to foot the tax bill for those not paying their share.
In reality, there are IP kind of laws, contract enforcement, taxes, time zones ...
Then you have this bright idea of “oh let me go to another cheaper country and get the benefit of their cheaper society but still command high salary”.
And you still don’t want to pay tax in that country.
Foreigners like these need to be ban 10000%. Losers that can’t compete in their home country and still don’t want to pay taxes everywhere they live.
This is what it boils down to. If you want a remote workforce, you're not going to be able to keep them confined to some box that you decide is acceptable.
I am not a lawyer so perhaps my hypothesis is wrong.
States are usually based around where you are more than half the year. But that's likely simple to show. If you're actually not there they don't have much of a complaint.
This gets really messy for consulting companies, where employees "work" at the client location 3-4 days a week, 2-3 weeks a month.
We had to track and report what states we worked in and what days, down to the billing hours, and then in some cases had to file tax returns in some of those states.
Also, all of the partners were required to file taxes in every state where the company earned income, which worked out to something like 46 states and 5 countries.
Many countries have tax law to deal with this type of American bullshit but it's still something to be aware of.
The nexus is "where the work is performed" or "where the employee resides" and usually states have agreements with the neighboring states so it balances out.
Also eyeballing CA as they send us one of those mean letters you speak of. That was "fun" to sort out.
Nope, sorry, completely wrong.
You pay taxes to the states proportionately to how much time you spent in the state for the year. Many states don't even have a "floor" for how much time an employee works in a state before they're required to pay income and payroll taxes to that state, so in some states even one day working in that state triggers tax.
Consulting firms track employees time spent in each state down to the hour so they can properly pay payroll taxes. Many consulting firms will even pay for tax return prep for employees required to work in other states long enough to trigger tax compliance.
Just live in 3 different states for ~33% of the year each and you don't have to pay state taxes? Must be easy in NY/NJ/CT. :)
Very importantly, the employer is already subject to additional liability by the very fact of the employee working in another state/jurisdiction. It's irrelevant from the perspective of the employer's legal liabilities whether the employee goes through the formality of updating their W-4.
But note that failure to update a W-4 after moving to another state or country is generally considered grounds for for-cause termination.
It's a compliance problem for the company, it's not about controlling their employees. From the employee point of view, it may put you on the wrong side of both visa and tax laws wherever you are sitting.
The country/state an individual is working from has the potential to arrest and deport the individual. Or fine and garnish wages for unpaid taxes.
So the choice isn't Big Brother companies who want to know where you are at all times and respectful companies who allow you to get your work done how you want. It's between companies who are following the applicable tax laws or those who are not. A company that is structurally opting to not follow laws seems untenable. A company is a legal construct in many ways. Whether or not the employee can commit something like tax fraud is perhaps a less interesting question, because, yeah, you can probably cheat on your taxes.
That's precisely the point; Many workers are not applying for work visas, which makes them outlaws and subject to deportation. Some countries have digital nomad visas with 0% tax rates now, but not most.
> If I have a po box or perhaps even a street address in WA or TX (no state income tax) but live in an airbnb somewhere in CA, how can the state figure it out?
Hypothetically, CA is financially incentivized to find that out, how is the the question.
But, if they do then they are going to
1) audit
2) if you don't respond to audit and tax -- arrest
3) at the same time suit the employer, especially if they have any operations in CA for not declaring your work properly.
Granted, there's little way to tell if I'm working from the Grand Canyon, or touring it, but AZ still believes they should get their cut.
The SEC and Shareholders care if you go against NIST guidelines.
This is great but most people can't simply move because countries for some reason decided that only capital moves, people stay put and work and if they really really want to move they need to go though months long of bureaucracy and it's not even available for most people.
This imparity between people breaks the natural tendency of equalisation and the arbitrage remains and creates political tensions because suddenly some services see unnatural demand, especially housing is particularly badly hit.
Effectively some people get particularly good compensation thanks to the arbitrage when other people who might be working just as hard and could be jast as important for the function of the society get screwed if they can't work from home and miss out on the arbitrage and can't move to the higher paying places because they are only(!) human capital.
So my argument is, I guess, this should be prevented from happening or the WFH from abroad people should be treated as local workers and pay taxes to to the host country. Ideally, anyone should be free to work and live wherever they like but since we are in a deglobalisation trend I have no hopes for it. So yes, WFH from abroad should be actually international workers and taxed accordingly.
So switching from income tax to sales tax would transfer money from the relatively poor to the relatively rich.
It may not have been done before but it's not impossible, right? You pay 5% on the first 10k you spend in a year, 12% on the next 30k, 20% on the next 50k, etc.
That would mean no more cash.
If I send my kid to buy groceries, is that sales tax on the kid or me?
Rather than cracking down, the current direction is legalization. Countries where digital nomads are common know what's happening and they ignore it as it's beneficial to them and are now legalizing to get an even larger slice of the pie (by attracting those who were previously fearful).
Others have mentioned the issue of housing stock, but regular tourists are actually more inefficient in that regards (very seasonal and short stays. Think about how many empty room-days most hotels have).
The country is likely missing out on (pretty substantial) income taxes, so through legalization they are trying to get some of that. I'm sure the countries enjoy the injection of cash into their economy, but they would rather get that from tourists vs. people working, who tend to use more public resources than tourists.
As for public resources, people who commute for work most likely use more than tourists, but digital nomads doing so would be an outlier.
The differentiation between digital nomads (people on a tourist visa/waiver) vs expats is an important one, as expats do get more entitlements to public services due to their legal residence.
But if you piss off the wrong person, you could have a hell of a time (depending on the country, even spending time in jail).
And the US embassy may not be inclined to help depending how blatant you were about it.
Luckily, the more likely jail time is the more likely you can just bribe the right person, but again, you need the locals on your side to tell you who that is.
You're a blackmail target like anybody else doing something baseline illegal.
Or even set up whole factories in poorer countries to save costs, but still charge the same price in the rich 'home' country?
So when companies pay remote workers, they often have a representation in that country. This usually means(depending on the country) that the American company that "employs" these remote workers actually pay money to a company in the poor country and that company pays the local taxes and the workers. There are companies specialising in this, so they setup companies in many countries and when you hire a remote worker from legal point of view the worker actually works for this intermediary and pays local taxes. Another popular option is, to setup your own company and do the same thing but skip the middleman.
When you setup factories in poor countries, that's considered an investment. Again, you setup a local company that is fully or partly owned by the you(depending on the country, there are restrictions) and that local company pays local taxes and operates in accordance to the local laws. When you bring the produce home to sell at American prices, you import that as if you are importing it from any other foreign company.
Yet this is exactly what companies do when they employ foreign workers or manufacture in poorer countries and sell those products/services at full price in their home countries.
"Rich" people moving into your neighbourhood is very different from rich people setting up a factory in your neighbourhood.
Both have positive and negative impacts but for the workers rich people moving into your neighbourhood is almost exclusively negative but if a foreign company sets up business in your neighbourhood its more of a mixed bag.
Exploiting the arbitrage is how arbitrage is removed so it is a good thing in principle, notice how the poor countries seize being poor after rich countries invest in them and produce all the stuff for cheap.
My problem is with the limits on who exploits that arbitrage. Workers are the most limited bunch with very little prospect to benefit from the arbitrage.
I don't know how it could be simpler.
Just as you can buy goods from any country via purchase order and pay via invoice, you can do the same with labor.
The only administrative work involved is the rules required of the entity buying the labor. Plus local rules that constrain my personal interactions with the company, if me and the entity aren't in the same jurisdiction.
If I'm in the USA, I have to mind the SDN list, if I'm in Singapore I don't.
Tangent: Most countries do technically allow foreign companies to directly and legally become employers in their country without having to involve any kind of additional legal employer entity, and in many cases such branches (as they're called) of the foreign entity can do the required formalities to legally employ foreigners. But yeah, there are usually significant compliance and liability/financial downsides to the branch approach. S most multinational companies do tend to prefer one of the two approaches you describe.
> So when companies pay remote workers, they often have a representation in that country. This usually means(depending on the country) that the American company that "employs" these remote workers actually pay money to a company in the poor country and that company pays the local taxes and the workers. There are companies specialising in this, so they setup companies in many countries and when you hire a remote worker from legal point of view the worker actually works for this intermediary and pays local taxes. Another popular option is, to setup your own company and do the same thing but skip the middleman.
Although you're right about this, the cost to the employer of such an intermediary company is hundreds of USD per intermediated employee per month, nowhere near the typical reduction in compensation for that employee for being in a poor country rather than a rich country. So it isn't the full explanation.
My take is it's honestly mostly just companies getting away with what they can get away with, in the usual economics supply-and-demand system. Hiring obstacles haven't yet forced most companies to change their definition of their labor market into "anyone who can somehow legally work for us (whether directly or indirectly) during work hours that overlap sufficiently with our core hours and without causing us to incur unreasonable compliance and/or travel expenses." They still set compensation using a per-location definition of the market based on who can commute to an office that no longer exists in the context of a remote worker.
Of course, switching to a truly remote-first labor market definition would probably involve paying lower salaries than the current SF and NYC market norms, at least in the tech industry. This makes correct compensation a complicated question for employers, when they recognize the remote-first labor market reality but also want to hire the top-notch caliber of employee who often chooses to live in such major tech hubs. But equally, such employees increasingly want the higher disposable income after adjusting for cost of living that allows them to take a slightly lower salary in other cities or countries and still come out ahead. So this just means that a transition to a remote-first definition would involve some iterative adjustments on both sides as a new economic equilibrium shakes out. We're probably in the first stages of this now.
Last note: It is true that benefits like health insurance and social security contributions will usually continue to vary in nature and magnitude based on local country norms; however, one of the countries where these (especially health insurance) are usually priciest is the USA, which also has the highest salaries, so people who try to use this variation as an excuse for salary differentials are either confused about the data or being disingenuous.
Source: living and working in the EU for employers from other countries for 15 years.
Think you're doing business with someone in Turkey and they might be in Iran/Syria?
Because of "facilitation" I can't even tell them who to deal with to get what they want done, unless I'm a lawyer providing legal advice (I think).
My employers security team has even caught on once or twice but I just say yeah I'm vacationing since my stays have usually been along the lines of 45-60 days or so at a time in a given country.
I still have and maintain my home address in the US, pay the rent and everything there, and I do return usually for a month or two at a time. Most of my friends do this as well or have a situation setup where they use their parents address and stay with their parents when back in the US for chunks of time.
On your companies side, it could also create all sorts of problems that nobody is really clear how to handle. I suspect this will get a lot more regulated if it becomes more common.
Most countries won't issue you a work permit without a lot of paperwork, cost, and time. Think 'send your passport off to the embassy for 3 months' type hassle...
And most employers don't want to employ someone abroad. Employment law varies widely by country, and unless they already have an office in that country they don't want to do all the tax and reporting stuff for only you.
Long term abroad in one country might be doable, but 30 days in each country is pretty much impossible.
If what you really want to do is live and work in one country while pretending that you live and work in another one, I don't see why either country should facilitate that.
It's easy enough to do that "properly" too, form a company or self-employed tax status in the country you are living in, and invoice the company in the country you work for. Then they aren't in a compliance issue and you are paying taxes where you work and live.
What's the problem?
We've been looking at getting property in her homeland, with the goal to enjoy the better summers there. But for, say 4 months a year. Hopefully enough time that I can start to learn the language and such, and she can enjoy better ties to her family - while remaining tax-resident here as to not rock the boat.
I'm curious what concerns your security team would have? Is it just that you'd rather the situation go under the radar and they're the most likely to spot the changes - or do they have concerns of their own?
But outside of that one time, I basically don't disclose where I am.
My GF isn't tied to a location since she does mostly freelancing/contracting and makes it known she will not/should not be expected to be in a single location and gets away with that just fine. So I basically just started joining her in her travels the past few years.
I'm pretty set in that I would simply quit if my company ever demanded I go back home and stay there.
I'm not sure going back to the office would be the end of the world for me, but I can see which way the wind's blowing - we're already in the process of downscaling the site because the demand just isn't there. I believe the most we've had onsite since this all began was approx 15%.
The position I'm in - my GF wants to eventually move back home, neither of us have family here, the wage is our only tie. So it's seeming completely logical to me, to use our new-found flexibility to ease that transition for both of us. We've always figured on retiring there, but a head-start on the language and the property ladder make sense to me, and being closer to her family for a third of the year instead of just christmas, is a huge win for her.
All the news seems to focus on people wanting to use this to live the high life. Just wanted to share my position to show there's some huge non-monetary value in this too.
In Switzerland there had been cases with, where the insurance wouldn't pay (broken leg after falling on stairs), because some parts of the house do not count as WFH.
https://www.manager-magazin.de/karriere/homeoffice-sturz-auf...
One you plug into the network in the location you are supposed to be, and the other you bring with you on your travels and plug your computer into over ethernet port. The one you bring with you can connect to any wifi or be hard wired. It has one job: tunnels all your data through vpn to the other box you left behind.
Does this exist? Seems like there could be a market for it now.
It would be easy enough to test it out if you had a sales channel in mind: give it a shot and if somebody wants to buy one, slap together something with Wireguard and two Raspberry Pis and build from there.
The main problem I see is getting steady access to qualified leads, since I would assume "remote workers who are trying to hide that they are in the wrong country" is a particularly difficult cohort to track down reliably to market to. Honestly, if you could detect such people at scale, selling your system to HR departments may be a better business.
But there's a potential for a business here: rent small spaces and offer to set up the small boxes for a fee.
This box allows them to build a virtual network cable back to their usual, residential connection - completely invisible from the other side (besides latency, but this can be explained away).
You can run wireguard on a raspberry pi (which are hard to source these days) or something like an HP SFF workstation which will run you ~$50 on ebay. Both of which are useful for other things asides from vpn tunneling.
What you're describing is just a router + WireGuard. I have a server with WireGuard that acts as an exit node in tailscale network and RPi with WireGuard that acts as SoftAP that routes the entire WiFi network through that WireGuard connection.
For this solution to be truly plug'n'play you need to figure out how to punch holes in NAT. Tailscale has ways of connecting two nodes even if both behind NAT and block UDP.
I work for a very large FAANG-type tech company. I am also a dual citizen, having US citizenship and a South American citizenship.
A few months after the pandemic began, I relocated from my high CoL work city to a small South American city where my relatives live. I told my manager I was moving to another US state, which is my official address and where I also have relatives.
It has been almost 2 years of this arrangement. In that time I believe exactly 0 people suspect I’m in a different country.
I’m only somewhat careful with my arrangements. In video chats, I use a background blur and try my best to have neutral lighting. My audio setup focuses only on my voice and eliminates background noise.
I don’t take special networking precautions yet. If they check their logs they’d easily see my true location. However, I subscribe to StarVPN and I have a glinet router ready to go should I need to start spoofing my digital location. I have full confidence this will be enough.
I pay ALL US taxes that I owe. Due to tax laws in the SA country I’m in, I have no reason to suspect I’m avoiding any taxes here either, but I’d have to consult with an accountant or expert to be sure.
I’m not at all worried about my situation. I have yet to hear of a single case of someone in a similar position as me having it go south in a bad way. If my employer insists I go back to the US, I can spoof my location with the method I described above. How would they prove where I am otherwise? I’ve also been playing around with the idea of quitting and traveling a while anyway.
I consider myself a very effective and productive engineer, and I subscribe to the “don’t ask don’t tell” policy in this situation. I’m surprised to see so much fear mongering and thinly veiled contempt for this here in HN. The total number of people doing this is likely extremely small anyway.
In other words, there's probably a lot of tax evasion and fraud going on.
Now that some thousands of tech workers get tax-cheating benefits, it is the subject of solemn hand-wringing here? I call BS
The company wouldn't allow it, for very understandable tax reasons. But my family is more important to me than any company. That's the way human beings are supposed to live their lives.
I ended up resigning. The week before I moved, my boss left me a voice mail asking if I could hold off on my job search because the previous-inflexible directors of the company were going to try to work something out. Eventually they did, and now allow anyone in certain positions to work remotely.
It turned out that the company had lost several other employees in the previous weeks over remote work, and based on the long list of open positions on the company's web site, it's having trouble replacing people.
This is the only time in my life when a good number of employees have had more sway over their jobs than their bosses. It's good to see people everywhere taking advantage of this (in a good way), and leveling the playing field with their companies.
Employment is a two-way street. It's not servitude. This is a once-in-a-generation opportunity to alter society in a way that favors people over profit.
If the company uses a payroll services provider like ADP, it really is as easy as having the legal department register for payroll tax (and unemployment tax, if that is a separate registration in that state), a roughly 15-30 minute process, and providing the relevant ID numbers to ADP.
However, payroll compliance and unemployment kick in with a single employee. There is no minimum threshold.
So both profit and people are addressed by more remote work!
For many companies the transition to remote during covid was a massive drop in performance of their staff. For developers, IT and the like, most of us had some experience, if not had already transitioned, but in those industries that hadn't, it's easy to look at those two years and say "this was worse".
Unless your company is VERY focused on remote staffing, collaboration is just easier in person for most roles. Add in time zone differences and it gets even more difficult.
Some people are bad at working remotely at home. Especially if there are distractions in their home office. (Like my wife, my dogs, my daughter, etc.) It can be hard to get others to take working from home seriously. I've gone as far as to rent an office for myself to go to every day.
When remote becomes a possibility, the idea of living elsewhere soon follows for many people. (as in this article) Even without crossing national borders, many US companies have tax and legal implications across state lines. Even supporting benefits for employees becomes more difficult as almost all health insurance networks are state based.
There are no doubt a thousand and one people that could reply "But not me, why should I change" but the simple truth is many people are easier to get higher quality work out of in person in an office, and an office is easier to manage than a distributed workforce.
This was the expected outcome, since most companies hadn't prepared at all for a multi-year global lockdown. However, my understanding is that even companies that had very little preparation handled the pandemic absolutely fantastic, and other factors were much more important (supply chain of physical goods, jobs that could only be done in-person, reduced travel and leisure etc). If productivity dropped for white-collar WFH type of jobs across the board, I think we would never hear the end of it. Instead, the media zeitgeist is blaming the "anti-work" culture, that people aren't taking minimum wage jobs anymore etc. It's definitely not the narrative I'd expect if "WFH=low productivity" were true.
In my view, both sides of the RTO divide have failed to adequately acknowledge the pitfalls of their own position, which has led to this topic being unnecessarily polarized.
Cities depend on property taxes. If all the offices suddenly stop being used as offices, they're going to have a terrible time. Nobody is paying taxes.
Commercial real estate is over built. If too many companies decide that they don't need commercial space anymore, then the market is going to collapse. Every one who borrowed money to build/own commercial real estate is going to find their bubble getting popped. Like the 2007-2008 meltdown in residential property.
If commercial real estate gets re-valued to reflect the newer, much lower, need for that space, then asset values fall through the floor. So anyone who still is paying taxes will be paying much lower levels of taxes. More bad news for cities.
Too many managers depend on people sitting in chairs. This is usually called "presenteeism". Part of the problem with presenteeism is that people feel forced to show up to work even if they are sick. Mismanagers usually don't know what you do. Or how to measure whether you're doing a good job or not. But they can see whether you're at your desk or not.
Manager empires are based on the number of people. If all of your minions are working from home, then other mismanagers cannot measure your status any more. Likewise, this leads to why many mismanagers pad their staff so that they can appear to be more important. Unimportant managers don't get "good" parking spaces, nor good corner offices. Nor do they get admiration from the other mismanagers.
- companies may have committed to have certain numbers of jobs in certain locations to get tax breaks in the past,
- companies may have built out office space and want to get use from it,
- incompetent middle managers prefer their subjects to be right in front of them so they can use time-in-seat as a proxy for productivity,
- some work is collaborative in nature and may be easier in person, and managers would rather not pay for travel for the times it is necessary.
Adding a few items to it:
- It isn't just middle managers who use "seat time" as a proxy.
- Businesses often sign 10+ year leases and commercial real-estate is EXPENSIVE. With a long term lease in place how do they justify the rents while the space is vacant?
- Many senior leaders are required to be in the office, so naturally you need to be there too.
It means that every meeting is via zoom. That's great for 2 hours a day. It's terrible for 6 hours during a meeting-heavy day. (Consider a manager with 15 reports that meets with 2 tech leads half hour weekly, a manager for half hour weekly, all ICs for a half hour bi-weekly, and has 4 hour long manager screening interviews a week. Team rituals usually take about 4 hours a week; anything else has been moved to email/slack. That's about 16 hours a week base load. Every single one of those, and every other meeting, is either on zoom (exhausting) or writing up an email (which takes 2-3 times as long as having a meeting.)
On top of that, performance management is more difficult. For great and average performers, it's not that different. However, it's much harder for low performers because it's bad to offer feedback async. So, things that should be a five minute conversation in an office turn into having to schedule a meeting. It also means that we have to rely on metrics more as well, and everyone here knows how bad metrics are at judging performance.
The problem amplifies for senior management. You lose the rewarding parts of the job and the parts that were positives turn into drudgery or negative.
I work remotely. I choose to work remotely because the positives outweigh the negatives, even as a manager, but it is a harder and less rewarding job remotely.
This sounds like the same tale we heard in the 90's, that software would be offshored to Asia and there would be a handful of people writing specs and overseeing work and not much more.
As the saying goes 'you get what you pay for'.
If you have talented people anywhere in the world, they have either already emmigrated to higher paying markets or are contracting locally at absolutely fair prices in an international market.
The sort of scenario you describe would have been true with information assymetry. However in the connected world of today if you think that someone is talented enough to be an effective asset but naive enough to not know their rate in an international market you are in for a surprise.
But why not hire some "manager of diversity" or "HR cook" in Jamaica?
I guarantee that in many (likely the vast majority) of these cases someone in management is aware and is pursuing a don't ask don't tell policy because they don't want to deal with the fallout.
It's extremely common to work while on a visitor's visa in another country, for example. I bet there is not a single manager reading this comment who has not had one of their employees send work emails while traveling internationally on a visitor's visa.
I have several friends who are doing the digital nomad thing, working all over the world while ostensibly traveling on visas that prohibit work. If they officially asked HR, HR would be forced to officially tell them to not work. But they're never going to ask, and their direct managers are never going to report the situation.
I know of several situations as well where the employee moved. The company response is pretty much universally "you can't do it so please don't tell us about it because if it's ever put in writing we have to act on it"
If a company doesn't want to know you shouldn't be doing business with that company.
Sure some of these cases are John Doe wanting to live as a secret expat but not all.
In a remote world, you have to know. There are numerous fake employee scams that have a number of different outcomes that present exactly in this manner.
1) Steal or forge a decent looking identity. 2) Have a face that interviews and attends some of the early weeks on camera then slides back to off camera 3) Profit whether it's theft or double-dipping or code farms
This isn't a pretend scenario. It's active.
Depending on your vertical and internal zero trust architecture a breach of this nature could be devastating.
So sure, maybe that employee is lying about their location to soak a big salary under a cheap cost of living but maybe they are something much darker and you can't leave that stone unturned.
It's true of literally everyone you do business with, so good luck with that.
Even if it weren't an invasion of privacy, as you say, companies want to be able to point and say 'look, we have a policy, you aren't allowed!' and blame workers for breaking the rules rather than trying to solve the (admittedly complex) tax regulations about working outside the country you are normally employed in.
But it's also convenient not to know.
I am saying that magnitude of the problem will be significantly more if you lie about residency.
In some cases working on a vacation is a more serious issue - I have heard stories of employees remote working from sanctioned countries and employers finding out after the fact.
But lying about full time residency is always a big issue.
No; they're not. Intention often matters in immigration. If the purpose of your stay in a country is tourism, that is one thing. If the purpose of your stay is to work remotely then that is a different thing.
Well, that's a pile of shit and completely false. Everything about that is false. I'm in Lisbon not some "beach town" (unless you're counting the capital of Portugal as a beach town). Employees have a huge amount of flexibility on using the Lisbon office or not.
And this is 100% ‘cloud’ company where all your work is logging in remotely anyway.
Not so sure about that. First meeting I have tomorrow morning is in person with member of the team in Portugal in the office. It's true that I have a lot of video calls, but not really a surprise given that Cloudflare has offices all over the world. We have more than 200 employees in Portugal and I'd guess around 40 in the office at any one time.
I have such a setup - the local connections at the end-user sites are inexpensive consumer-grade connections (because they are cheaper and quicker to set up than a proper leased-line which has months of lead time, and you're not going to convince small restaurants/coffee shops that they need to spend 500 bucks/month for a leased line to serve public Wi-Fi) with various bullshit such as filtering, dynamic IP, etc - but the network hardware tunnels back to my infrastructure and abstracts away all the intermediary connections, giving them a "clean" Ethernet port. As a bonus, it can tolerate intermediary connections failing without dropping in-flight TCP connections, since those run over the tunnel rather than the raw interfaces which have gone down.
I've helped a few remote workers with this setup. Always a stable VPN - be careful some of the low cost ones - any lifetime bullshit deals - anything listed on stacksocial - anything less $5/m - they change their IP registrations so even if you are connected to SF one day it shows correctly the next the day it shows Pakistan - use something like Mullvad or better yet Tailscale exit node from a stable VPN provider in your specified location of working - heck just setup tailscale on raspberry PI at your parents/friends. Modify route tables so you never hit the web unless connected via VPN, easy on some Asus routers.
Adjust the time and TZ on your PC to place of registered work time,that web based homebrew HR system could be doing something crafty .
Deep latency hacks - use RDP from place of registered work
I'm more productive on some days, less productive on others, and overall, I'm pulling ahead in terms of productivity life satisfaction, and travel experience. Down on money, but to me personally, it's worth it.
I’m based out of a company in the US that was proactively working towards remote environment before the pandemic. One thing that struck me as odd was that even within the states I would be technically illegally evading taxes if I worked from Nevada for instance - for a month let’s say due to need in change of scenery. Even with a country I cannot technically and legally be remote.
The laws need to change here are the antiquated tax laws. I don’t understand how if I want to work from Florida for part of the year to avoid the winter is a tax / insurance liability for me or the company.
The last point really hit home for me. What if you have family abroad - either healthy or otherwise - and you want to spend more time with them. would these companies want be to take one month off or rather work?
I understand that people using this to move permanently is a an issue. But the people that have a permanent base but would like to occasionally work from elsewhere need a better framework and set of laws. The physical borders don’t make much sense in a digital world.
You do understand that's basically the entirety of the thing, right?
And the tax and legal liability is NOT just on you, but on your employer too. It's not that they legally have to know where you are as such, nor that they care, but that in order for them to follow laws they have to know which laws apply.
> The physical borders don’t make much sense in a digital world.
Yet that would be hard to argue when you get caught with weed in Saudi Arabia, or when the french police knock on your digital nomad door in south of France.
At some point this becomes like the "sovereign citizen" crowd, and their "your laws don't apply to me" don't tend to work out very well.
Notice taxew are not a big deal for small companies... If Thailand wants to send my small restaurant a tax bill, I'd just drop it in the round file.
If I'm a big company and do business in Thailand, then I have to abide by their laws.
One example is raising kids in country A while you are employed by country B. OK, you pay sales tax and maybe property tax in country A but country A is expecting payroll tax to help pay for education, and healthcare fees based on your income to help pay for healthcare.
Another example is insurance. If you work for google you can probably sue them when your WFH desk bought with inadequate WFH allowance collapses and breaks your ankle. But does google's insurance cover the case of working in your summer home in Iran, or is able to make a payment to an Iranian hospital? Not likely. At least it's a moot point compared to the embargo violation and export control violation that now comes to light.
Another example is just legal stuff in general. "Work" in US and live in Spain? What's the legality of the NDA you signed? What's the process to fire you? Who knows, but a company sure doesn't want these uncertainties times the number of countries its remote workers are located.
Mature companies know all of this and put rules in place and either open a proper office when it's justified or hire a middleman company who then hires the remote worker as a contractor.
[1] I use US and Japan specifically because I just finished a 10 year stint in Japan and well, it's common online to see Americans living in Japan on a marriage visa or something, trying to get remote/American salaries and totally missing the basic requirement: work done in Japan is taxed in Japan and also subject to other Japanese regulation. So not only can you be in trouble for not paying taxes in Japan, your company can be in trouble when it realizes that by paying an employee in Japan, it is also bound by Japanese labour law. My understanding is that this works similarly for most country pairs.
For example, social security payments. Pension plans, etc.
A simple example, Israel has mandatory pension plan requirement for all employees. If you are working remotely in Israel "as if in the US", you are now opened to a whole bunch of interesting questions. Employer isn't aware of that, in this scenario, so isn't paying the pension.
That creates:
* criminal liability for the company * criminal liability for the management team personally * the company is assumed to be "self-insured" and basically has to act as the pension provider for the employee.
You fall down and become invalid at the age of 27? The pension insurance will pay for that. Which is basically the company. Then you have to pay 60+ years of pension payments to that employee.
And that is _one_ aspect of this issue.
Others are related to laws. What is the minimum wage? How do you compute the allowable number of hours and overtime pay?
For fun, let's say that you are working for a few years in this mode. The employee then sues the company for overtime pay (200%) because that is the law where they are working.
Firing someone, also, is a totally different process across jurisdictions. In Israel, you have to pay a month's salary for every year that the employee worked for you (based on the last 3 - 6 months).
You have to fire a senior guy that worked for you for 6 years? Prepare to pay immediately a big chunk of money. Also, have fun with _another_ criminal liability (for the company & leadership) because you didn't pay insurance for this scenario.
The company in this question is going to be absolutely against this sort of exposure.
For that matter, it isn't even legal only that is going to object. If you are a public company, you need to put things like "liabilities in case we have to fire people" in the balance sheet. The CPA is going to have a field day with all those undisclosed issues.
But you still would put a stock photo of a man with notebook in a beach chair into your article, wouldn't you?
It is clear that there's a power struggle playing out, where the Powers That Be desperately wish to pretend like Covid never happened, and the world never changed.
News media has become the propaganda machine of the wealthy.
Maybe I am wrong, but WFH seems to solve a whole lot of issues for businesses, and it's just middle and upper management not coping with it.