Navigating the hybrid work scenario

There’s no doubt that remote work has proven to have many advantages for both employers and employees. And it’s unlikely that we’ll return to a fully in-office arrangement anytime soon. The future of work is hybrid: some employees fully remote, others in the office full-time and the vast majority likely splitting their time between the two. As Stanford professor Nicholas Bloom noted in a recent article, 32% of workers never want to go back to the office, but another 21% never want to work from home again.

Companies are evaluating the effectiveness of the hybrid work model, and the jury is still out. Pew Research says that 83% of respondents feel that the hybrid work model will be the future of work. In February 2021, JPMorgan COO Daniel Pinto told CNBC that he saw a zero per cent chance of 100% of people going back to the office, 100% of the time.

Theoretically, workers could spend the summer months at a lake house in Minnesota, extend their vacation to Florida by a couple of weeks and work from the beach or even move to a lower-cost city or state. But in practice, this can be a nightmare for payroll and compliance professionals. In fact, some companies have already learned the hard way that there are serious tax and compliance risks involved on both sides of the spectrum.

How can you give your employees the flexibility they demand without putting your company at risk? Some companies may have overpromised on the idea of ‘work from anywhere’. Even Spotify’s seemingly wide-open policy comes with some asterisks – specifically, limitations on the jurisdictions in which employees are permitted to work, presumably those where the company has already evaluated and planned for the tax and compliance risk.

In addition to establishing a location-based policy where appropriate, there should also be rules for who qualifies for remote work and how. There may be reasons why it’s necessary to have certain roles or individuals in-office, so setting a policy that specifies who can work remotely and under what circumstances can provide a guidepost and avoid ad hoc decisions that can cause issues.

Once a policy is in place, it’s imperative to implement a workflow by which employees can request remote work. Often, staff will ask their direct supervisor who may give permission based solely on the impact it may have on productivity, team collaboration and work output. They may not be aware of the payroll and corporate tax implications and, therefore, inadvertently put the company at risk.

Companies cannot rely on employees to accurately report their remote work locations. Despite 78% of HR pros saying they were confident their employees would self-report when working in another state or country, the reality is only a third reported all those days to HR. It turns out that the biggest risk is not the employees who are asking for approval — it is those who take the ‘anywhere’ comment literally and jet off to new locations.

The only way to accurately track employee location is with technology that’s purpose-built for helping companies maintain compliance. Doing so not only gives finance and HR a much more reliable way to comply with accurate payroll withholding and immigration risk, but also eliminates the burden of reporting for employees. With length-of-stay thresholds for payroll tax withholding that vary from 14 to 30 days or more across jurisdictions, you need to track not only current location but also historical data to validate against those thresholds. Fortunately, 94% of employees are comfortable with being tracked at the country, state and city level.

With many employees now working from home at least part of the time, the question of paid time off (PTO) has become more complicated than ever. PTO requests are surging as workers, exhausted and burned out, are scrambling to take the vacations they’ve had to table for more than a year. One survey from management consulting firm Korn Ferry found that 79% of professionals vowed to use more vacation days in 2021, and 46% said they’d take longer vacations than in years past.

Even with the clear advantages of remote work, without the right tools and guidelines in place, the risks could quickly far outweigh the benefits. Companies that aim to leverage the flexibility, productivity and diversity of hybrid work must mitigate the compliance nightmare with sound policy, procedures and solutions that allow them to protect themselves, while also keeping employees happy.

And here is where Secova can help. Secova provides comprehensive solutions to make sure that your company complies with current regulations and fulfils IRS reporting requirements, besides helping with leave administration by tailoring a program specific to your company’s size, scope and complexity of leave issues. Hybrid work has never been more productive!