Does a company have the right to track the whereabouts of its employee?
Employee locations have massive tax and legal implications for employers. For instance, if an employee worked two weeks in New York City each year, their company must legally withhold NY taxes from their paycheck. If an employee stays 183 days or more in the United Kingdom, they are required to file taxes as a resident. More surprisingly, if a company employs several people in France, permanent establishment laws mean that company might have a French entity, whether it wants one or not.
However, efforts to track employees raise privacy concerns and have the potential to go too far. Do you see a psychiatrist regularly? Are you interviewing for jobs with a competitor? Tracking applications that could expose such details, legally or not, have no place in the business world.
The conversation about tracking has intensified as COVID-19 has turned once office-bound workers into remote, mobile employees who may cross tax and legal jurisdictions without anyone knowing. Whether employees work from home or from COVID-19 getaways, it may affect where and how much tax is owed by both them and their employer.
State governments are eager to enforce their tax laws, and both employees and employers are equally eager to avoid overpaying taxes or suffering penalties. Should employee tracking become the new normal now that so many workers are remote? How should HR departments approach this difficult subject?
The Baggage of Tracking
When I used to travel worldwide as a consultant, I suffered the painful annual process of manually completing a Big Four tax calendar at the end of the year. Once a year, I spent hours going through my calendar, my travel history, and my emails to try to figure out exactly where I was each day. Unsurprisingly, road warriors like myself were the first employees to welcome location tracking through our phones and laptops. Anything to spare us from that Outlook scavenger hunt!
For the overwhelming majority of workers, however, any kind of tracking is new and unnerving, particularly for those who never travel for work…