Want to Move to a New State But Keep Your Job?
source link: https://hbr.org/2021/10/want-to-move-to-a-new-state-but-keep-your-job
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My career coaching client, we’ll call him Steve, and his wife had wanted to move out of New York City for years, recognizing that it was financially unsustainable for them. When Covid hit, they finally made their move to Austin, Texas. “We chose Austin because [my wife] has family here, my company has an office here, and we wanted to move to a state with no income/capital gains taxes,” Steve told me.
Steve is a project manager and had been successfully doing his work remotely during Covid. He said that the most important thing he did before committing to the move to Texas was ask permission from his employer first. “We have some employees who moved to Hawaii or another state without permission, and it put the company and employee in a really awkward position. Some told the company after their move, then the company said it wouldn’t allow them to work there, so they had to quit or were fired.”
As an HR executive, I’ve seen an influx of people wanting to leave more expensive cities to move closer to family or to locations with less-expensive costs of living. I, myself, moved from Los Gatos, California, one of the most expensive places to live in the country, to Scottsdale, Arizona during the pandemic. I was up front with my company’s leadership about my need to move early on and was prepared to accept any potential consequences.
When company leaders say no to employees’ requests to relocate, they aren’t being unreasonable; many simply can’t sustain an employee in the place where they’ve chosen to move, or they don’t feel that person’s role is truly a remote job long term — even if they’ve been doing it remotely for the past 18 months. If you’re thinking about relocating, it’s important to both align with your company’s policies and review your personal situation. Consider these five specific areas before making the move.
Each company has a philosophy about where to do business and what tax liabilities it’s willing to incur. If a company isn’t registered to do business in a particular state, having an employee working in that state may cause an additional tax liability that’s in conflict with the organization’s business philosophy. Further, even if a company is registered to do business in that state, it may not be registered to pay employee compensation there.
Even temporary work in a state can trigger tax liability for a company. International moves bring additional complexities such as potential visa and work permits for employees and international income and sales tax liabilities for the business, all of which leaders may not be willing to support.
When you move permanently to a new state, it’s no surprise that you may be expected to pay income taxes there. But what if you decide to move, work remotely most of the time, and travel back to the office location as needed? In most states, nonresident income taxes kick in after a certain period of time. For example, if you move or travel to New York for more than 184 days, you’re subject to income tax. In California, it’s 45 days. Some states have a first-day rule, which means that if you work there for even one day, you owe state income tax. So, working remotely in your new home and traveling back to your old office could open you up to tax liability in both states. At the very least, you’ll need to file your income taxes in both places, and if you use an accountant to do so, there may be an additional cost to prepare your taxes for multiple states.
Companies pay employees based on the cost of labor — this is not the cost of living. If you live in San Francisco, the cost of labor is higher than if you live in, say, Tallahassee, Florida. Therefore, an employee working in San Francisco will be paid more for doing the exact same job than the employee in Tallahassee. If you choose to move to a city that’s a lower-cost-of-labor market, then your salary could go down based on your company’s compensation philosophy. It’s important to check with your manager or HR representative as to whether this decrease would be implemented, because if you planned to save money in the new location, the move may not actually change your overall cost of living.
Your company hired you to fill a specific need to support or grow the business. If that role was onsite pre-pandemic, then there could be specific tasks that need to be done onsite once the company has returned to the office, such as working with specialized equipment you can’t take home or gathering physical signatures from multiple sources. Your work may also include cross-functional collaboration on certain projects or presenting to senior leadership in person. So, ask yourself, “Have I been able to work remotely and perform every aspect of my job that I was able to do pre-Covid?” If you can do most of the job, then you adapted to Covid-related work-from-home requirements and were as successful as you could be. However, that may not mean the job is truly remote or would be acceptable as a remote position long-term. If you can’t perform all the tasks or support the business fully, you’re asking your company to reduce the scope of your role or change your role completely, which could also result in a salary change.
As the old saying goes, “Out of sight, out of mind.” An unconscious affinity bias is when people gravitate to others similar to themselves. Managers who are in the office may feel more connected to employees who are in the office and may be inclined to assign them higher-profile projects or more interesting work. Further, this unconscious bias could lead to more opportunities for promotion or other rewards for in-office employees, which could impact your career ambitions. One way to combat affinity bias if you continue to work remotely full time is to make an effort to stay top of mind for your manager and senior leadership. Think about how often you have touch points with them, or consider moving to a city where your company has another office so you can be visible.
Finally, it’s important to remember that your role is in service to your company. It was created to — and you were hired to — support and grow the business. So, consider whether your company has already established post-Covid remote work policies or if full-time remote status could be impacted by whatever future policies are determined. What if your boss is okay with you working remotely now but your role supports another part of the business that expects you to be onsite regularly? It’s critical to look at your job through the lens of your role in supporting the company. It’s never personal. It’s just business.
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