SAN FRANCISCO, Feb. 23, 2021
Overwhelming majority of employees are ready to work from anywhere—and let employers track their location for tax compliance purposes
SAN FRANCISCO, Feb. 23, 2021 /PRNewswire/ -- Topia, the leader in Global Talent Mobility, today released the results of its annual "Adapt" survey, which finds that remote work has created massive tax compliance risks—and strategic opportunities—for enterprises. The 2021 survey finds that since the COVID-19 pandemic began, 28% of employees have worked outside their home state or country, but only one-third reported all those days to HR. Consequently, their employers may have failed to withhold payroll taxes appropriately but didn't realize it. Unless HR monitors where employees work—something 94% of employees are open to—enterprises risk hefty penalties in the event of an audit.
Topia's annual Adapt survey polls employees and HR practitioners about employee experience and talent trends and how organizations are responding to them. This year focused on the dynamics of COVID-19 and remote work in the enterprise.
"HR leaders recognize that remote and distributed work offers a competitive edge for attracting and retaining talent and for building diverse, highly-skilled teams," said Shawn Farshchi, CEO of Topia. "As flexible work becomes a mainstay of business culture and talent strategy, HR and finance leaders must collaborate to make it work from a compliance perspective. The potential advantages are too important to ignore."
High Enthusiasm for Remote Work
Employees said the flexibility to work remotely is now the second most important attribute in an employer—behind high pay and ahead of both professional development and culture.
Tax Compliance is a Blindspot
Despite this enthusiasm for remote work, enterprises are unprepared from a compliance standpoint. Some employees forget to report days worked outside their home state or country. Others appear to hide their location to avoid cost-of-living adjustments to their salaries. The risks are hard to overstate:
Location Tracking is Welcome
Although the compliance situation is dire, there is a potential solution: technologies that log employee work locations while respecting their privacy. With better location data, finance departments could, for instance, comply with payroll withholdings for employees, and HR teams could manage immigration risk, no matter where employees choose to work.
UK HR Pros More Confident Than US Peers
UK employees were slightly more likely than their US counterparts to report all days worked outside their state or country. That doesn't mean UK enterprises are at less risk. In fact, overconfidence among UK HR pros may place their organizations at even higher risk.
"The mobility landscape has shifted dramatically in the past 12 months. Now, every remote employee is a mobile employee," said Richard Tonge, Global Mobility Services leader at professional-services firm Grant Thornton LLP. "Most critical for employers is the need to manage remote work policies once they've been implemented. To do that most effectively, Leveraging Topia's technology is a highly effective way to automate location monitoring and tax compliance for employees."
The 2021 "Adapt or Lose the War for Talent" survey, conducted by CITE Research on behalf of Topia, took place between December 11, 2020 and January 12, 2021 and included 1,250 employees. Half were located in the US, half in the UK, and all worked for international companies with at least 2,500 employees. 250 of the participants were HR professionals.
Topia is the leader in Global Talent Mobility. We empower companies to deploy, manage and engage employees anywhere in the world. The Topia platform enables organizations to deliver mobility as part of a broader talent strategy encompassing all types of employee movement – remote and distributed workforces, business travel, and more traditional relocations and assignments. This drives enhanced employee experiences and competitive advantage by ensuring the right people are in the right place at the right time, while staying compliant no matter where they are. The Topia platform automates the entire global talent mobility process, including scenario-based planning, expat payroll, tax and immigration compliance, reporting and more. Topia powers global talent mobility programs for world-renowned brands such as Schneider Electric, Dell, Veolia, Equinor and AXA. Topia has raised over $100M from NewView Capital (formerly New Enterprise Associates), Notion Capital and others, and is a global company with offices throughout the Americas and EMEA.