It is a professional fantasy turned reality for some: Escape the office and travel the country, even the world, working remotely in rented beach houses and ski lodges or, on a leaner budget, a home on wheels while living the #vanlife.
Digital nomads, as these wanderers call themselves, say their adventures can be thrilling. They also describe an unsexy side of maintaining a career on the go. Complicated taxes, breakdowns on remote highways and pangs of loneliness can weigh down free spirits.
“Sixty percent of the time it’s fun,” says Jack Ryan, a software sales manager. “The other 40, it’s like, ‘I do not want to do this right now.'”
Ryan, 27, frequently lives out of his Toyota Sienna with all-terrain tires. The minivan replaced the Mercedes-Benz Sprinter that failed him in the Santa Ynez Mountains this year.
As if bummers like that weren’t enough, killjoy bosses and their friends in HR are setting new boundaries for payroll reasons.
Many managers took a lax approach to remote work at first, and workers took advantage. The ranks of self-described American digital nomads swelled 49% in 2020 from the year before, reaching 10.9 million, and have since climbed to an estimated 16.9 million people, according to MBO Partners, a business-management software company.
If employees scattered to states or foreign countries where a business wasn’t registered or insured, well, that didn’t seem like a big deal amid a pandemic.
That carefree attitude has waned as executives wake up to potential legal and cybersecurity liabilities, and impose restrictions on where their remote employees can be.
Ali Pruitt was recently surprised to learn that a position for which she was interviewing — title: Head of remote — wouldn’t be so remote. She figured she was a prime candidate, having worked while travelling New Zealand, Fiji, Bali and other destinations in recent years. She planned to do the job while living primarily in Mexico.
Sorry, came the response. She says the US company told her that she could spend no more than 90 days a year outside the country.
“I was like, ‘Wait, what?'” she says.
Pruitt, 41, opted for independent consulting instead and says she has secured a visa that allows her to live in Mexico for several years.
Dozens of countries introduced nomad visas to attract mobile professionals. Domestically, plenty of companies employ remote workers in states where they didn’t do business a few years ago.
Airbnb, which has as much skin in the free-range game as anyone, touts employees’ license to “live and work anywhere.” In practice, company policies keep roughly two dozen countries off limits. Stays in foreign countries can last no more than three months, and employees still need permanent addresses. So, not anywhere.
Labour lawyers, accountants and human-resource specialists (who can actually be quite fun) warn that working while roaming isn’t simple. It requires as much planning and paperwork as it does whimsy and wanderlust. Even then, there is a measure of risk that some employers won’t tolerate.
Say your company is sued over a data breach and has to reconstruct where, when and which sensitive information could have been compromised. The task might be harder if employees are hopping from place to place, says attorney Angela Kovach, senior director of public-sector solutions and operations at Everlaw, which makes software for lawyers.
“When you have problems trying to figure out where data lives, you could be held in contempt of court because you’re not able to comply with a discovery request,” she says.
Things can get messy when people aren’t forthcoming. Several digital nomads told me they have seen others attempt to conceal their travels from employers by blurring their Zoom backgrounds or donning sweaters when they are signing onto video calls from warm locations during winter months. Sorting out employees’ moves after the fact is harder than dealing with them up front, says Jim Bartolomea, global head of people at app maker ClickUp.
The rules for business registrations, payroll and income taxes, and workers’ compensation insurance vary from state to state. In general, an employer and employee should check their obligations if the worker spends a month or more in a different state, says Brad Gastineau, a tax partner at the San Diego accounting firm Gatto, Pope & Walwick.
He adds that revenue departments in certain states that are popular remote-work destinations, such as California and Montana, are getting aggressive in enforcement. Efforts include sending questionnaires to companies with sizable remote teams, asking where employees have been working. A worker’s personal income taxes also can alert a state that a business has a presence there.
Alex Atwood, chief executive of the gig-economy marketplace GravyWork, says he was blindsided late last year when notices arrived from government agencies in California and Texas, saying the company had failed to register as a business and owed money. Unbeknown to him, a former software engineer on his full-time staff had worked remotely for extended periods in those states, where Virginia-based GravyWork hadn’t set up shop.
Atwood says his company owed between $20,000 and $30,000 in taxes, registration fees and penalties. He estimates the total cost was closer to $500,000, factoring in the time he spent in meetings about the surprise bills and the hours it took for his accounting and HR departments to resolve the problem.
He adds that several other employees on a roughly 60-person team have been open about working while travelling — some internationally, which raised cybersecurity concerns.
“We’d never even thought about these things,” he says.
Unwilling to deal with the headaches of nomadic employees, GravyWork converted some to independent-contractor status with the help of a professional employer organisation, a type of business that specialises in managing mobile workers.
Going independent can open more location options for workers, but it also can mean taking on more bookkeeping responsibilities, says Kristin Vierra, 34, who is travelling throughout South America while performing contract work in recruiting and career development for a different company and her own business.
Her thousands of followers on social media see beautiful photos and read thoughtful reflections on her experiences in other cultures. They may not realise that Vierra carefully tracks her time in each place and budgets about $500 a year for a professional accountant to prepare her taxes. “I look at this lifestyle as such a privilege, and it takes self-accountability, hyper-awareness and extra work,” she says.
Write to Callum Borchers at firstname.lastname@example.org
This article was published by The Wall Street Journal, part of Dow Jones