Q&A

Can a US corporation hire remote workers in Canada?

Can a US corporation hire remote workers in Canada?

The answer is yes. A US business can hire remote workers in Canada through Employer of Record Services (EORs), similar to US Professional Employer Organisations (PEOs) that you might be more familiar with.

Do you have to pay taxes on a remote employee in Michigan?

New Hampshire and Tennessee charge tax on investment earnings, but not on wages. If your remote employee works in any of these states, you may not need to withhold state level income tax, but you do need to withhold federal income taxes and payroll taxes. Scenario: You own a business in Michigan.

Can a remote employee be considered an employee in another state?

Your remote worker will be considered an employee in his or her state of residence, not the state where your company is based. Work being performed remotely counts as time worked. Compensate remote nonexempt employees for all hours worked, including work performed at home or another remote location, under the FLSA.

Is your remote worker an employee or independent contractor?

Finally, if you have a remote employee working in another state, your company may become subject to sales and use and/or income tax nexus within that state. Is Your Remote Worker an Employee or Independent Contractor?

New Hampshire and Tennessee charge tax on investment earnings, but not on wages. If your remote employee works in any of these states, you may not need to withhold state level income tax, but you do need to withhold federal income taxes and payroll taxes. Scenario: You own a business in Michigan.

Your remote worker will be considered an employee in his or her state of residence, not the state where your company is based. Work being performed remotely counts as time worked. Compensate remote nonexempt employees for all hours worked, including work performed at home or another remote location, under the FLSA.

How to hire out of state employees in California?

Out-of-state employers who choose to hire employees who work remotely in California should study up on California’s FEHA and ensure that they are meeting FEHA’s requirements in connection with their hiring, leave, and employment policies.

What makes an employee a resident of California?

If tests (1), (2), and (3) do not apply in any state, an employee’s services are considered subject to California employment taxes if some services are performed in California and the employee’s “residence” is in California. Residence means having a more or less permanent place of abode.