Remote Work Relocation Causes Headaches for Managers

​Michael Alexis first noticed that a handful of his employees had moved to vacation destinations after several months into the pandemic. Alexis, who is the CEO of TeamBuilding, a game company based in Washington state, was enthusiastic about the flexibility offered by a virtual work environment, but soon encountered a slew of legal and tax challenges in employing workers across different cities, states and countries.

"You need to know that even if your employee moved there and started working there and didn't tell you, you would still be accruing that liability," Alexis said. "It's very important to know where they are and what your responsibilities are as an employer."

Alexis's employees are part of a growing number of workers choosing to relocate due to the flexibility of telecommuting. More than 1 in 10 Americans have moved during the pandemic, according to a survey from Zillow conducted online by the Harris Poll. The survey found that remote work was a primary reason respondents decided to move.

Dispersion of the workforce comes with challenges for managers, who must lead employees who are living in varying working conditions and time zones. Here's a look at how employee relocation can impact managers:

Logistical Difficulties

Alexis said that some of his employees faced technical difficulties while transitioning to their new homes. "We've found that people might say, 'Hey, I've got to move to somewhere like Thailand or Bali,' and they get there and learn that reliable Internet can be difficult to come by."

Alexis has observed that employees may struggle to find productive work environments when relocating, especially if they choose to live in remote areas, which can make it hard to access quiet, private spaces with reliable WiFi.

TeamBuilding has started using time-tracking software to keep tabs on employees who are scattered around the world.

"In most cases, we don't use those to monitor activity. We just kind of stress that our people get the work done," said Alexis, who noted that the software is a helpful tool for keeping employees on task.

Research has found that less-structured work environments are linked with decreased productivity, which can be worsened by the distractions of living in vacation destinations.

Legal Concerns

It may feel too "hands on" for some, but managers need to know where their employees are working and when they are working, so they can stay in compliance with the laws of the jurisdiction where the employees are doing their jobs. "Effectively managing a remote workforce can at times be a little bit more complicated, since by nature of working remotely, the employer will not have the exact same line of sight visibility for the workforce," said Dan Kadish, an employment and labor lawyer at Morgan Lewis.

Labor laws concerning overtime pay and minimum wage can differ between jurisdictions, leading to changes in how managers should supervise employees. States use different minimum salary thresholds to determine whether an employee is considered exempt or eligible for overtime, and workers may be over- or underpaid, depending on where they live. It's the employer's responsibility to pay the employee correctly.

Managers also may be on the hook to provide certain meal and rest breaks to employees depending on the state in which the employee is working.

Tips for Managers

Legal experts say that managers should establish clear guidelines for employees who hope to relocate for remote work. Donald Dowling, an attorney specializing in employment law at Littler Mendelson, said managers should consult with human resources to confirm that employees' moving plans will not run afoul of regulatory issues before they approve plans to relocate.

"Sometimes an employee will just ask their immediate supervisor [about moving] and the immediate supervisor just shrugs their shoulders and says, 'You're telecommuting anyway, I don't care where you are,' " Dowling said. "Later, HR finds out that this person moved to a new state or country, and it's a bigger problem than the immediate supervisor realized."

Kadish said that clear communication from managers is critical to maintaining a productive work environment with employees.

"Considering ways to make sure that the company is still monitoring productivity and has effective management techniques for remote workers are all things to keep in mind," said Kadish, who recommends that managers conduct periodic surveys to make sure they are up to date on where employees are living. He added that establishing clear expectations surrounding working hours and time off can be helpful for employees working in distant locations and for managing overtime costs.

Alexis has used videoconferencing and messaging apps to communicate with his team and recommends offering clear guidelines for newly relocated employees. TeamBuilding's handbook now mandates that employees update the company when their primary residence changes.  

"We've tried to make sure that we set expectations," Alexis said. "That also means introducing technology and support for them."

Kelly Anderson is a freelance writer based in Washington, D.C.