Companies are anticipating another largely remote year of work, and new questions about pay and benefits are weighing on managers.

Discussions about the future of work, such as whether to lower the salaries of employees who have left expensive cities, are a priority at board meetings and executive meetings in various industries, according to business executives, board members and business consultants.

Among the questions companies are trying to solve: Who should pay the tax costs if employees move to another location while working remotely? And how can working parents be most effectively supported?

Companies say there is a lot at stake, from employee satisfaction and productivity to the regulatory ramifications, if they make these decisions incorrectly.

With employees moving to new cities, states, and countries, businesses and workers are facing tax concerns.

Mark Zuckerberg, CEO of Facebook Inc., told employees last year that starting January the company will use its virtual private network (VPN), which employees use to access company systems to determine where they are doing tax.

The question is whether workers who told Facebook that they have left locations like California and New York and should therefore not pay state and local income tax have really moved, according to someone familiar with the matter. If an employee has moved to another state or city that has local income taxes, both the company and the employee can be held responsible for not paying it.

Facebook’s campus in Menlo Park, California. The company decided against tracking its employees’ locations based on their VPN usage.

Photo:

Jeff Chiu / Associated Press

Facebook ultimately decided against tracking its employees’ locations based on their VPN usage. The company now says that if its employees apply for and are approved for long-term remote work, they will need to confirm their new location with the company as it could have an impact on their taxes. Facebook also said that some remote workers’ salaries could be changed if they live in a location with different labor costs than their previous location.

Lyft rideshare Inc.

Recently, its US-based employees were told that for tax reasons, employees must work in one of Lyft’s 36 registered states, depending on where the Lyft entity is registered. If an employee lives outside of states where Lyft is registered as a business unit; For example, in Maine or Wyoming, he has until March 31st to get back to one, according to an internal email verified by the Wall Street Journal.

If Lyft employees want to live outside of the state they worked in for 60 days or more before the Covid-19 pandemic starts, they must submit a form before March 31 so the company can tax them in that new state – but you can only send this request once, according to the email.

Companies like payment company Stripe Inc. have offered employees leaving San Francisco, New York, or Seattle the option to move for a one-time bonus of $ 20,000 if they agree to a 10% pay cut. Others, such as B. Microsoft Corp., have indicated that benefits and compensation may vary based on the company’s compensation scale and location.

A number of Fortune 500 companies in various industries are considering potential pay changes if an employee moves from a city like San Francisco to Texas, said Jimmy Etheredge, general manager of North America at consulting firm Accenture PLC.

“Almost all of them have a cost of living element in their compensation,” he says. “As they ponder this future of work, which may involve more remote work, which may involve talent in places that they didn’t necessarily have before, they will try to make adjustments.”

Prominent tech companies are turning to remote work, while skilled workers are migrating from Silicon Valley. WSJ examines what this could mean for innovation and productivity, and what companies are doing to manage the impact.

Other tech companies continue to pay people the same money regardless of zip code. Spotify Technology SA, the Sweden-based audio streaming company, recently announced to its employees, whom it refers to as “band members”, that they could work from anywhere in their assigned country and maintain the same salary.

“If you move, we won’t change that,” said Katarina Berg, Spotify’s chief HR officer. The company, which has around 6,500 full-time employees, will set national salary ranges for each job, based on the remuneration of competing companies and based on applicable wages in expensive cities like San Francisco or New York, where many Spotify employees work.

The ongoing remote magic is putting pressure on companies to offer parents more help with childcare – while being careful not to annoy workers without relatives.

Some companies have offered Covid-related scholarships that workers can use for everything from childcare to exercise equipment. Tech company Palo Alto Networks Inc. is now offering its employees a $ 1,000 allowance that can be applied to a menu of options. Parents can use the money for tutoring their children while others can use it for a peloton bike.

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“No two employees are alike in the support they need,” said Nikesh Arora, CEO of Palo Alto Network, in a blog post announcing the benefit.

Others offer parents and carers special discounts. Bank of America Corp. has offered eligible employees, including those who work in their branches, up to $ 100 per day for childcare expenses. The company also increased the number of days employees can use backup child or adult care facilities from 40 to 50 per year.

For workers who were used to frequent business travel prior to the Covid-19 era, another question arises: will their customers want visitors when the pandemic ends?

Brad Preber, CEO of Grant Thornton LLP, one of the largest tax and accounting firms, says some clients are starting to say they prefer the work to stay virtual. That’s because remote working worked well, but also because face-to-face visits from accountants and consultants can be disruptive, especially when many offices reopen with less than 100% capacity of their staff.

For street fighters who made a living from near constant business travel, the change could be a disappointment, he says.

“I also miss human contact,” says Preber, “but the rules of the game have changed.”

Remote work and the new office

Write to Chip Cutter at [email protected] and Emily Glazer at [email protected]

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