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Nonprofit Management
May 19, 2023
As a nonprofit organization, it is essential to have a cohesive and productive team in order to efficiently achieve your mission and goals.
Read MoreAboutThe Benefits of Team Building Exercises for Nonprofit Employers
Nonprofit Management
March 28, 2023
America's charitable nonprofits serve and nurture people of every age, gender, race, and socioeconomic status—supporting at-risk communities nationwide.
Read MoreAbout[Webinar Recording] UST Live: Cybersecurity Risk Management
Nonprofit Management
March 16, 2023
Creating a positive culture in the workplace should be a priority for every nonprofit employer. A positive work environment can help increase employee engagement, morale, an...
Read MoreAbout5 Tips for Creating a Positive Workplace Culture
Nonprofit Management
March 02, 2023
While many foundations are well on their way with going mobile, start-ups and smaller organizations may still be trying to figure out how to establish a mobile presence in a...
Read MoreAboutThe Pros and Cons of Going Mobile
Nonprofit Management
December 20, 2022
No matter where society struggles or how much change comes to your nonprofit, everything always comes down to the people who form your team and support your community.
Read MoreAboutThe Changing Landscape of the Nonprofit Workforce
Nonprofit Management
December 16, 2022
From recruiting and training to engagement and retention, your organization has likely invested a great deal of time and effort into ensuring your volunteer program is succe...
Read MoreAbout[Webinar Recording] UST Live: Volunteer Management
Nonprofit Management
November 18, 2022
Some argue that they couldn’t prepare for the pandemic, because it was a black swan event—defined as unforeseeable.
Read MoreAboutImplementing Change to Build Resiliency
Nonprofit Management
September 30, 2022
In the latest rendition of UST Live, we were joined by thought leaders from across the U.S. with expertise in succession planning.
Read MoreAbout[Webinar Recording] UST Live: Succession Planning and Preparedness
Nonprofit Management
September 21, 2022
Working on a team requires more than just hard work, morale amongst co-workers, and willingness to work with others. The most important yet often ignored that attributes to ...
Read MoreAboutHow to Improve Communication Strategies with Your Team

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HR Question: Hiring People in Different States

Question: We are going to hire remote employees in several different states. What must we consider from a tax and employment law perspective?

Answer: Generally, employers must comply with the labor law of the state in which the employee will be regularly performing services and where wages are paid to that employee. There is a common rule of thumb called “boots on the ground,” which implies the regulations would apply to the state where the employee is physically working, including wage and labor regulations for hours worked and overtime, as well as general fair employment practices, termination/final pay rules, and recordkeeping. From an employee perspective, income tax for the state where the employee works (as well as lives) falls under each individual state as well. Note too, that the state where the employee works is generally where the employer should be paying unemployment insurance tax and workers’ compensation coverage.

We recommend additional research with tax and legal experts when expanding into a new state, even with remote workers. The following information offers more details about unemployment taxes and new hire reporting.

Unemployment Taxes (UI)

In many cases, employers should apply the standards of the state where the employee works and resides (where their “boots” rest). However, an employer could also choose to select the requirements of the most generous state in which the business operates or follow the requirements of a more generous internal policy, and apply those rules consistently across all company locations.

Most states will allow a multistate company to pay UI taxes from one location, though this does still require registering with each state and getting approval.

In most states, UI taxes can be paid for all employees under a Reciprocal Coverage Agreement (RCA) in which UI is paid to only one state (i.e. the company’s headquarters) when an employer has employees in multiple states. It appears approval must be sought by each state for each employee for this to occur; however, it can at least provide the company the avenue of paying the unemployment taxes only from one state for all employees working from home in other states.

New Hire Reporting

An employer with employees in more than one state has two options in fulfilling new-hire reporting requirements. Multistate employers may choose either of the following:

  • Abide by the new-hire reporting program of each state and report newly hired employees to the various states in which employees are working.
  • Select one state where employees are working and report all new hires to that state’s designated new-hire reporting office.

Multistate employers who opt to report to only one state must submit new-hire reports electronically or magnetically. These employers must also notify the federal Department of Health and Human Services as to which state they have designated to receive all their new-hire information. The National Directory of New Hires then maintains a list of multistate employers who have elected to use single-state notification.

When notifying the department, the multistate employer must include all generally required reporting information along with the following:

  • The specific state selected for reporting purposes.
  • Other states in which the company has employees.
  • A corporate contact person.
  • A list of the names, Employer Identification Numbers (EINs), and the states where the employees are located if the company is reporting new hires on behalf of subsidiaries operating under different names and EINs. 

Q&A provided by ThinkHR, powering the UST HR Workplace for nonprofit HR teams. Have HR questions? Sign your nonprofit up for a free 60-day trial today.

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Nonprofit Finance
April 23, 2021
According to the 2021 Benchmarks Report, the average nonprofit donor contributed an average of $167 in 2020—this per-donor metric was slightly lower than 2019.
Read MoreAboutOnline Fundraising Best Practices for the New Year (and Beyond)
Nonprofit Finance
December 18, 2019
Understanding the concept of the “business model” for your nonprofit has become a more integral component to maintaining organization sustainability within the nonprofit sec...
Read MoreAboutThe Importance of Understanding Your Nonprofit's Cash Flow
Nonprofit Finance
November 14, 2019
Last year, the Financial Accounting Standards Board (FASB) released Accounting Standards Update (ASU) 2018-08, which clarifies the accounting guidelines for contributions re...
Read MoreAbout[Webinar Recording] Accounting for Nonprofit Grants and Contributions
Nonprofit Finance
October 29, 2019
Giving in the U.S. in 2020 will be different in many ways than previously—mainly because of campaigns, economic conditions, and tax law implications. Don'...
Read MoreAbout[Webinar Recording] Trends and Forecasts for Charitable Giving
Nonprofit Finance
October 08, 2019
What is an executive director? An executive director is “responsible for overseeing the administration, the program and the strategic plan of a nonprofit organization. Other...
Read MoreAboutHow an Executive Director Becomes a Financial Leader
Nonprofit Finance
September 27, 2019
Thousands of nonprofits have registered with their states in order to legally solicit donations... do you know what state requirements extend to your organization?Presented ...
Read MoreAbout[Webinar Recording] Fundraising Registration 101
Nonprofit Finance
August 07, 2019
Nonprofit professionals face a challenging job that is made even more complex by industry dynamics and a competitive talent marketplace—requiring even more attent...
Read MoreAbout​​​​​​​[Webinar Recording] National Nonprofit Benefit Study
Nonprofit Finance
May 10, 2019
Are you familiar with the Accounting Standards Update (ASU) 2016-14 issued by FASB? It’s a standard created to offer solutions to simplify and improve how a nonprofit organi...
Read MoreAbout​​​​​​​Lessons Learned from Implementing ASU 2016-14 – Functional Expenses
Nonprofit Finance
May 01, 2019
Did you know that certain nonprofits can legally opt out of paying state unemployment taxes? Do you understand who is benefiting from this tax exemption law? In this article...
Read MoreAbout​​​​​​​The True Story of Nonprofits and Taxes
Nonprofit Finance
November 08, 2018
With holidays on the horizon, this is the time for holiday shopping, family gatherings and ringing in the New Year. With so much on our plates, time can get away from us&...
Read MoreAboutExercise Your Nonprofit’s Tax Exemption for 2019

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