Are you handling remote hiring properly?

Great talent isn’t located in just one state. You can find an amazing new team member anywhere in the world. Literally! It’s a beautiful thing and seems pretty simple, right? Find the best person for your team and hire them. Why not?

Well, when it comes to hiring employees, rules, requirements and filings vary by state. Just because you do it one way in Kansas (as an example) where your company is based doesn’t mean that it’s the same process in South Dakota (another example), where your new, talented PMO manager lives. There are 48 more states to consider alongside those two, and that’s just the US. And if you go about it the wrong way, there will eventually be lessons to learn and likely penalties to pay. Just a warning.

The good thing is that a lot of HRIS platforms do a great job of simplifying and streamlining requirements when you decide to make a remote hire. Gusto and Rippling, two of my personal favorites, tee it all up for you, so you just have to follow the guidance they provide. If you’ve never done gone through the process, it still can be fairly confusing. For instance, does hiring an employee in a state create a nexus for income tax purposes? For some states the answer is yes, and other the answer is no. Do you have to register with the secretary of state where the employee is located or just with unemployment and employment tax agencies? When in doubt, it’s always best to consult an attorney or tax expert.

If you’re focused on the work of your business and aren’t familiar with HR processes and requirements this may all sound very foreign, and you may also be wondering if you’re in compliance with all of the remote hires you’ve already had. Take a deep breath. Even though there may be some costs involved, you can always go back and course correct. And it’s better to do that than to just let an existing compliance issue linger.

As you continue to add to your team, know that there are affordable options available on the platform side that can meet your needs and put you on a path to success, like I mentioned earlier. But investing in the tool alone is not enough. It has be used appropriately in order to keep you in the clear. Let me give a quick example. I helped build out the HR function at an organization that had employees in multiple states but paid each of them as if they lived in the state where the business was domiciled That’s a big no-no for both the employer and the employee for tax purposes. We corrected it but were met with some penalties in the process. Lessons learned.

Bottom line…. Hire that great remote talent. They just may be the perfect addition to your team. But get everything right on the backend to eliminate headaches down the road. When in doubt, check with an expert first!

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