Digital Nomads: Reducing Payroll Tax and HR Compliance Risks
HR Compliance: Volume 2 – August 16th, 2021
Before 2020, employees working remotely were usually freelancers. As many workplaces began supervising remote employees over the pandemic, however, remote work trends exploded. With this change, “digital nomads” have also increased exponentially in the workforce, especially among professionals that hold full-time, non-exempt jobs (as opposed to freelancers). Digital nomads increased by 96% from 2019 to 2020, per a recent study. The term digital nomads refers to employees who live and work in places around the country or even the world. Unencumbered by an office, they travel and work in
new locations, often without their employer’s awareness. While this trend may result in happier employees and geoarbitrage (a method to hack and improve income compared to the cost of living), it’s also creating payroll tax compliance and general HR compliance issues for employers.