The Hidden Cost of Letting Workers Telecommute

It's really not that big a deal. At Stack Exchange I think we have employees in eight different states now, all individuals working from home. It's a lot of paperwork but not disproportional to the amount of paperwork you have to do per-employee anyway. It does cost something to deal with but it's a rounding error compared to the cost of those people's salaries. It is by no means a reason not to hire people who work from home in other states.<p>It DOES require us to collect sales tax for a bunch of different states, though. This would be a big deal if we were an ecommerce company... you'll notice that Amazon is fanatic about avoiding telecommuters; they don't want to accidentally get themselves in a position of effectively raising their prices by 8% on the entire state of Texas just to have one remote employee there.

Sounds like good way for rural states to further depress their economies. You'd think they could use all the tax revenue possible. Having a telecommuting worker pays property tax, income tax, and spends their money at the local food establishments. All this without having to give "tax intensives" for a company to move into the state. What could be better than that?

As somebody whose last startup had people working remotely from four different states ... yikes!<p>With state budgets as tight as they are, it's no surprise to see them looking for reasons to tax out-of-state companies. And it sounds like it's still not clear just how much tax liability this will lead to. But wow, it sure sounds like a minefield for startups.

Discovery (DISCA) faced this issue in 2008 and decided to lay off all employees who lived in a state with this tax nexus law (I was one of them). There were a total of three employees in my state, but there were probably scores of employees around the country. They probably saved several million dollars annually in sales tax by doing this (back of the envelope calculations). A handful of the employees affected in my group were re-hired as contractors.

On the flip side, if you work in Massachusetts but live in New Hampshire and work from home some days, you don't have to pay income tax on the days you worked from home (NH has no state income tax)

There's another hidden cost that they didn't mention in this article: benefits and employment agreement requirements that vary from state to state.<p>We had a few colleagues that telecommuted from California in a startup that I worked at 2 years ago. Just for those two employees, the company had to draw up different benefits and employment agreements to satisfy the local California laws.<p>Fortunately, these costs aren't usually ongoing unless you change both on a regular basis.

Ludicrous! Imagine an employee living out of state doing work at home, like preparing slides for a presentation. No telecommuting, just doing work at a desk. And that's "doing business"?

I was wondering something similar but for countries. Say that I work for my own company developing iphone apps or something like that. Now I like to travel around so I go to the US and work from there, could it be problematic?

Also, I spend most of the day wearing just a dressing gown and if I have to appear on a webcam for some kind of chat or conference, I smear the lens with vaseline and hold up a little doll of myself dressed smartly that I made, wiggling it whenever I'm speaking.<p>This comes at enormous cost to my dignity.

I work at a large multinational software company where distributed teams have been encouraged across all projects. I live in Ireland and work in/for a U.S. team. Many of the U.S. team also work from home.<p>Recently the edict came down that working-from-home for those employees with an office was not acceptable. It listed a large number of negative consequences (loss of career prospects, management visibility, team cohesion, and social interaction). Each and every one of these applies to me as part of the distributed team (which is still being implemented) but apparently the double-standards are ok.<p>Working from home is a no-no but working from another country is just fine!

Loved this comment<p>&#62; Gee, and to think we were wondering what businesses could do to create jobs?<p>Clearly, the answer is "what can government do to stop holding back job creation?"

Yet another way in which government is trying to thwart efficiencies developed by capitalist activity.

That's one way to stop outsourcing...

The moral of the story is: don't have employees. Have contractors.