Employee moved to another state and wants to work remotely
Having an employee work remotely from another state triggers immediate corporate registration and tax withholding obligations, such as creating a filing nexus with aggressive states like California. Setting up these legal compliances without a payroll provider can cost more than the value of the work itself, making it difficult to keep the employee on legally.
What people tried
Every workaround mentioned in the threads below. We haven’t tested any of them — and nobody here is claiming they worked.
- 1Avoiding paying the former employee to work remotely from the other state
In their words
Unedited, grouped by where they were said, most upvoted first within each place, each linked to the thread it came from.
“That's a tough spot, the California nexus alone is enough to make any small business owner's eye twitch”source ↗
“Have you already checked if the remote work triggers a registration requirement in Cal? Even a single employee working from there can create a filing obligation, and the state is pretty aggressive about it”source ↗
“I'd be worried less about the payroll processing and more about the registration and tax withholding side. If you're not set up with the EDD yet, that's where things get messy fast”source ↗
“Getting setup to pay them legally in CA is going to probably cost you more than the value of the work being done, possibly several times over.”source ↗
Where this came up
People with this problem also raised
- 4How do I figure out what compliance rules apply to selling internationally?
- 2Why am I penalized for working during planning periods?
- 5How to avoid customs fines and drone laws abroad
- 8Do I have to return an accidental double payment?
- 4Return to office feels like a massive pay cut
- 2How to figure out teacher tattoo policies when job hunting