How to keep ‘hush trips’ from complicating compliance

With the stress over the last three years of the pandemic, the economy, and the world at large, the idea of packing up, telling no one and jetting off to an exotic or remote location is extremely tempting. And with the prevalence and flexibility of remote work, there’s very little stopping many employees from doing just that. In fact, more than half of U.S. adults (56%) say they are likely to take a “hush trip” this year — going on vacation while continuing to work without informing their supervisor.

For the employee, this seems like no big deal: they’re still working, meeting their obligations and deadlines, and participating in meetings with colleagues. Why does it matter whether they’re doing it from home in suburban San Diego or from an Airbnb in the Swiss Alps?

But when it comes to tax and immigration compliance, it is a big deal. When employees work outside their home jurisdiction, it puts their company at risk of running afoul of tax and immigration laws. Not to mention, it may also have personal tax implications for employees themselves. For example, New York has a 14-day threshold — any time spent working in the city beyond that during a calendar year obliges the individual to pay income taxes to the state.

Are employees to blame?

While there may be a handful of employees who are intentionally sneaking off without their employer’s knowledge, the reality is that most “hush trips” probably aren’t taken by employees who are intent on deceiving their employer. Instead, employees simply don’t realize that traveling without their employers’ knowledge can be problematic for the company or themselves.

That problem — and the solution — lies squarely on the shoulders of the company. As HR leaders, it’s our responsibility to inform employees about our remote work policies, including those around work location. It’s an opportunity for HR to set expectations, establish alignment and give employees the flexibility they want while operating with transparency and trust.

Here are six tips to keep “hush trips” from complicating compliance — or from even being “hush” in the first place:

1) Determine your risk tolerance. This starts at the top: If your industry, values or management culture demand a more risk-averse approach, you’ll need to take that into consideration as you decide how to offer the flexibility your employees demand — or whether to offer any at all. For example, is working remotely within the same country okay, but international is not? What are the expectations for employees who are working remotely? Must they keep set hours? Or simply achieve their goals, regardless of time of day?

2) Establish a clear policy. Implement a remote work policy that spells out who, when, where and how often employees can work outside their normal jurisdiction. For various reasons, you may want to limit the locations, duration and roles that are permitted to work somewhere else other than the office or home. For example, some countries treat salespeople working within their borders as establishing a business presence, which creates a complex legal situation. Be sure to include remote work policy parameters into offer letters or employment contracts to ensure there’s no confusion from the onset.

3) Explain the “why.” In addition to informing employees about the policy, you’ll also want to explain why you’ve set these parameters. Make it clear that you want to provide the flexibility they desire while simultaneously protecting the company and them personally from any legal or tax implications. When employees understand the risks, they’re much less likely to embark on clandestine travel, not only out of fear of getting caught, but also because they don’t want to put the company, or themselves, at risk.

4) Streamline processes. If the process for requesting and getting approval for remote work is complicated and time-consuming, employees will be more likely to skirt the system and go rogue. Instead, use technology to automate the workflow including policy communication, requests and approvals. For example, if there are roles, durations and locations that are absolutely fine, or the opposite — completely off limits — don’t make employees wait for approval from their supervisor. Set up a system that automates those decisions. Removing friction from the process will make employees more likely to follow it.

5) Consider monitoring. Last year, 48% of HR professionals found an employee working in a foreign country without authorization, exposing them to the risk of fines and legal issues. One way to avoid this risk is to implement automated location monitoring technology on company-owned devices. This not only helps HR see employees’ work locations for compliance purposes but also to track thresholds and other data around policies to see what’s working and what’s not. This may sound “big brother” but employees are surprisingly comfortable with this notion. Over 90% don’t mind having their location tracked even down to the city level. Of course, this also goes back to the education piece. You’ll want to make them aware of the tracking and the why behind it for the sake of trust, transparency and good faith.

6) Promote it. Hush trips are hush because they’re kept secret. Instead, shed light on the subject by encouraging communication around great travel and experiences. If you’ve got a top-notch remote work policy and a strong compliance program, why not shout it from the rooftops? As more people seek flexibility and experiential travel, encouraging employees to promote their remote work experiences through internal Slack channels or even Instagram posts (tagging your company, of course) can help to attract and retain talent who are looking for a flexible, adventurous culture.

As remote work has become commonplace, it’s only natural that employees will seek to push the boundaries of what’s possible. But at the same time, governments are starting to take note and crack down on noncompliance with more audits and attention on nomadic workers.

Related: Recession looming? The financial benefits of shifting to a remote work model

That means HR has both a mandate and an opportunity to establish and implement clear policies and procedures that eliminate the need to keep “hush trips” hush and instead give employees the freedom and flexibility they demand.

Jacky Turnbull, chief people officer, Topia