Hoosier Banker 27 have a written authorization that is revocable by the employee. Some states are not as restrictive, while others are more restrictive. Garnishment laws also vary from state to state. Workers’ Compensation An employer will need to notify its workers’ compensation carrier and let the carrier know about the remote work arrangement and the employee’s remote location. In most cases, remote employees will be considered localized in the state in which they work remotely. Workers’ compensation coverage obligations and systems vary by state. For example, Texas has an elective workers’ compensation system, unlike Indiana. A remote Texas employee can opt out of receiving workers’ compensation benefits and seek general tort damages against an employer. If a remote employee is injured in a work-related accident while working from home, it is still the employer’s responsibility, and the state will require proper coverage. Payroll Taxes The employer must review the tax laws of the remote employee’s state and determine what taxes should be withheld. In most cases, an Indiana employer will need to withhold state income taxes for the state in which the remote employee lives and works, and should not withhold and remit Indiana state income taxes. (If the employee lives and works in different states, the issue is more complex.) This generally requires the employer to register with the tax authority in the other state. Some states make the tax registration process easy, while other states are more cumbersome. Some states also have city or township registration requirements in addition to state-level requirements. Some states (e.g., Florida and Tennessee) do not have state income taxes, in which case no state income tax should be required for remote employees living and working in those states. If the employer has a human resources information system, it is not uncommon to have remote employees linked to a physical office in the system, whether for reporting relationships, grouping employees together for communication purposes or for certain benefits. If the physical location is used for state tax purposes, however, this can present a problem. For example, an employee who lives and works in Illinois and is linked to Indiana in the system should have Illinois state taxes withheld, not Indiana taxes. There are solutions for this problem, including: - Linking all remote employees to a location called “Remote Worker” and configuring the system to refer to the state of residence to determine state taxes for the employees assigned to the Remote Worker location; or - Creating pseudo physical locations for remote workers in those other states (e.g., Illinois Remote); or - Creating a new field for all employees specific to the particular state in which they work. INDIANAPOLIS CHICAGO COLUMBUS ST. LOUIS MILWAUKEE A FULL SERVICE LAW FIRM WITH A SIMPLE PROMISE, PUT YOU FIRST. 201 North Illinois Street, Suite 1400 Capital Center, South Tower Indianapolis, Indiana 46204 }ɘʇȠȞȤɉȡȣȡɉȡȞȝȝʇɓʇ4ɘʇȠȞȤɉȡȣȡɉȡȞȝȞ www.smithamundsen.com
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