If you thought supporting flex work was all about making the business case and arguing about Marissa Mayer, you’re in for a nice surprise. Right now, you have the chance to take some real political action.
That’s because last week a trio of legislators from Connecticut introduced a really important bill in the House. The Multi-State Worker Tax Fairness Act (H.R. 4085) addresses a preposterous situation arising from a mismatch between approaches to taxation in neighboring states. I’ve gone into the situation in detail on my blog and on the Huffington Post, but in a nutshell it goes like this: If you live in Connecticut, work in New York, and work from home even occasionally, you’re likely to find yourself paying taxes to both states on the days you telecommute.
It comes down to a little-publicized glitch in the way income taxes are assessed by the states. You see, all states have the right to tax their own residents on their income, no matter where these residents happen to be when they earn it. But some states—New York included—have a regulation on the books that basically orders everyone, resident or not, to pay state income tax on every penny they earn while working for a company that’s located in the state—even on days when they, themselves, are physically working somewhere else. And then there are states—Connecticut included—that require those same employees to pay state income tax for every penny they earn while physically working in their home state, even if the work they are doing is for an out-of-state company
The result is double taxation on every day a Connecticut resident with a New York employer works from home.
These rules (with a very few exceptions) apply even if everybody involved—employer and employee—are in favor of the telecommuting arrangement. They apply even if the employee is prevented from getting to work because of something beyond their control—say, a hurricane. They apply even if the employer has asked the employee to work from home on that particular day. (They don’t apply for employees working 100% off-site, but it’s never been made clear how many—or few—days the employee would have to show up on-site for the rules to kick in.)
While the situation is particularly egregious in the Connecticut–New York pairing, it is one of a number of such taxation inequities affecting telecommuters around the country. And if you think about it, it affects more than just the border-crossing employees of this world: It eliminates the option of telecommuting for others—those who can’t afford it, are confused by the tax implications, or work for small companies with payroll departments that are unequipped to handle it. It affects the companies, themselves, who might otherwise have any number of sound business reasons for wanting to encourage telecommuting. And it affects job-seekers—at a time when that’s the last thing we should be doing—who may have to limit their job search as a result of these rules.
Hence, the H.R.4085 bill. Representative Jim Himes is the sponsor; Elizabeth Esty and Rosa DeLauro are co-sponsors. But note that this is not the first time a bill like this has been introduced. In fact, it’s been attempted in every Congress since 2004, and has never even made it to a vote. So what we need here is a groundswell of support. The current sponsors are all Democrats from Connecticut. We need co-sponsors from other states—and other parties! We need to get it introduced in the Senate.
Spread the word, people! Call or write to your representative and senators. (Here’s a handy site for looking up their names and contact information.) Nicole Goluboff, a lawyer who has written and advocated widely on this issue, has kindly provided a sample letter; add your own two cents and send the letter out. Also, urge your company to join the diverse coalition of organizations endorsing the legislation! Your company can sign a formal Statement of Support. Contact Goluboff for information about how to get your organization’s signature on the Statement.
Flex work proponents of the world, unite! We have nothing to lose but a really stupid and damaging bunch of laws and regulations.
photo credit: thinkstockphotos.com