Tech CEO says he was hit with up to $30,000 in surprise taxes and fees after a software engineer worked remotely in California and Texas without telling the company
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- Tech startup GravyWork racked up an estimated $500,000 in costs due to a surprise from a remote worker, WSJ reported.
- CEO Alex Atwood didn't register his business in California and Texas, where an employee spent time working.
- Some workers take advantage of remote work policies by lying to their bosses and co-workers about their location.
Working from a tropical island or a cabin in the woods was a professional dream come true for some workers in the wake of company-wide remote work policies.
But for those who moved around without alerting their employers, their companies can end up paying the price, according to a Wall Street Journal report.
Alex Atwood, the chief executive officer of tech startup GravyWork, told the Journal that his Virginia-based company may have to pay an estimated $500,000 in total costs after a former software engineer worked remotely for long stretches in California and Texas without telling him. Atwood didn't register his business in those states, which sounded an alarm to their respective government agencies, he told the Journal.
As a result, Atwood said that his company racked up between $20,000 and $30,000 in taxes, registration fees and penalties in surprise bills. The rest of the total estimated costs come from the hours he said he spent in meetings and dealing with accounting and HR headaches trying to fix the issue.
He also said that several other employees admitted to working across international borders which sparked concerns over cybersecurity.
"We'd never even thought about these things," he told the Journal.
Atwood did not respond to Insider's request for additional comment ahead of publication.
Since COVID-19 forced companies to adopt work-from-home policies, remote workers who travel, also known as digital nomads, now make up 16.9 million American workers — a 131% jump from pre-pandemic levels in 2019, according to research from MBO Partners.
But even though many companies have continued to let full-time employees work outside of the office, most don't allow them to work internationally due to regulatory risks and concerns over compensation packages that don't match the local cost of living.
Still, Insider's Hannah Towey reports that some white-collar employees have decided to push the boundaries of their new freedom without telling their bosses or co-workers.
One marketing specialist secretly worked full-time jobs in countries like Panama, Peru, and Colombia to escape the chilly winters in Chicago where he is based. Another worker moved from Miami to Ecuador with his husband and took fully remote jobs in marketing and consulting because it was cheaper.
A Berlin-based remote worker even went so far as to set up a personal computer with a VPN so the company can't track his location.
To avoid potential work-from-home penalties, a tax expert told the Journal that employers and employees should check financial policies like business registrations, payroll, and income taxes in a particular state if a worker decides to live there for a month or longer.
from Business Insider https://ift.tt/YFJqAxp
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