4 ms·

If you are remote living in Texas but working for a company in CA, do you get the unemployment if CA has the benefits, but Texas does not?

collectedparts 5y ago
IANAL but my understanding is that companies have to register to do business in each state that they want to employ remote workers in. So if you're a Texas resident, the CA company would have had to register in Texas to have you on payroll, and that relationship would be governed by Texas law. Of course if you kept your driver's license in CA and just happen to physically be in Texas without telling your employer that, then it'd be CA.
- paulcole 5y ago
  > So if you're a Texas resident, the CA company would have had to register in Texas to have you on payroll, and that relationship would be governed by Texas law. I don’t think this is fully correct. My understanding is that it’s about where the work is being done, not the residency. For example, many businesses in Portland, OR employ residents of Vancouver, WA (right across the river). When COVID hit and those WA residents became remote employees, many Portland businesses had to become registered in WA because that is now where they had employees located.
  - runbathtime 5y ago
    I'm confused by unemployment. Doesn't the company essentially pay it? The employee also gets taxed when their paycheck is deducted for unemployment insurance every month. Did they get this money back if they never use it? We know the state gov is involved somehow, because they extended programs, but how? I can't figure out if it is the company, yourself or the state, or a mix of all three involved in unemployment. And does it make sense to use the state you physically live in or the state where the company is? I think with remote work and different states offering different amounts, this can all be gamed for maximum benefits.
    - paulcole 5y ago
      Think about it in the sense of where you earned the money. If you live in Washington but physically work in Oregon, you’re earning money (and paying income tax) in Oregon. You’re only eligible to apply for unemployment in states where you worked and meet the eligibility criteria. So in that case, no matter what bonuses WA is offering, you only paid into the OR system so that’s the one you’re eligible for. There’s no “shopping around” because (for the most part) you’re only working in and paying into the system of a single state. This link might help: https://www.cbpp.org/research/introduction-to-unemployment-insurance https://www.cbpp.org/research/introduction-to-unemployment-i...
  - awb 5y ago
    INAL, but when I ran a remote company I had to register my business in the state my employees lived in and pay unemployment tax in their individual home states. If my employees worked outside of their home state (nomadically) then I think the states they travelled to technically want a share of that income, but that it's the employee's responsibility to report that income as being earned in that state, not the employers. The employer continues to pay W2 wages + unemployment tax or 1099 income in the employee's state of residence until the employee changes their residency status. In practice however, nomadic income only typically gets reported for high income employees like professional sports players or entertainers who earn large amounts of publicly identifiable income in different states throughout the year. For an employee to file for unemployment in a state, they would first need to show residency in that state. For example, you can't pass through CA for a week and file for unemployment there.
    - paulcole 5y ago
      > If my employees worked outside of their home state (nomadically) then I think the states they travelled to technically want a share of that income There’s a bit more to it than that. An employee doing work in a location is a possible back door way of establishing nexus in that state for the business. Amazon, for example, knew they had a target on their back so forbid employees from even turning computers on in some states.
gamblor956 5y ago
No, you are treated as a Texan employee and would not be eligible for CA unemployment benefits. Contrary to what the other response stated, it does not matter where your DL address is; it matters where you are actually resident (generally, physical residence). If you were to claim CA unemployment using a CA DL but were residing in TX at the time you were employed, you would be committing fraud. Note that if you hadn't told your employer that you had moved to a different state, generally they can terminate you "for cause", meaning that you would not be eligible for unemployment in either state.
- collectedparts 5y ago
  I guess it might technically legally be fraud but OTOH I wouldn't call it "wrong" because if you maintained CA domicile you'd keep paying CA income tax on your income. And with TX not having income tax, it's almost like your CA income tax pays into the benefit pool...
  - deleted 5y ago
    [deleted]
  - gamblor956 5y ago
    If you maintain your CA domicile and continue to pay CA income taxes, then in that example, your physical and legal residence would remain in CA, so you're not a TX resident, you're a CA resident temporarily in TX. (Yes, residency is very complicated for state purposes, as each state has its own definition and thresholds.) Also, unemployment is funded by employers, not income taxes, using an insurance-style scheme.

collectedparts 5y ago

IANAL but my understanding is that companies have to register to do business in each state that they want to employ remote workers in. So if you're a Texas resident, the CA company would have had to register in Texas to have you on payroll, and that relationship would be governed by Texas law. Of course if you kept your driver's license in CA and just happen to physically be in Texas without telling your employer that, then it'd be CA.

paulcole 5y ago
> So if you're a Texas resident, the CA company would have had to register in Texas to have you on payroll, and that relationship would be governed by Texas law. I don’t think this is fully correct. My understanding is that it’s about where the work is being done, not the residency. For example, many businesses in Portland, OR employ residents of Vancouver, WA (right across the river). When COVID hit and those WA residents became remote employees, many Portland businesses had to become registered in WA because that is now where they had employees located.
- runbathtime 5y ago
  I'm confused by unemployment. Doesn't the company essentially pay it? The employee also gets taxed when their paycheck is deducted for unemployment insurance every month. Did they get this money back if they never use it? We know the state gov is involved somehow, because they extended programs, but how? I can't figure out if it is the company, yourself or the state, or a mix of all three involved in unemployment. And does it make sense to use the state you physically live in or the state where the company is? I think with remote work and different states offering different amounts, this can all be gamed for maximum benefits.
  - paulcole 5y ago
    Think about it in the sense of where you earned the money. If you live in Washington but physically work in Oregon, you’re earning money (and paying income tax) in Oregon. You’re only eligible to apply for unemployment in states where you worked and meet the eligibility criteria. So in that case, no matter what bonuses WA is offering, you only paid into the OR system so that’s the one you’re eligible for. There’s no “shopping around” because (for the most part) you’re only working in and paying into the system of a single state. This link might help: https://www.cbpp.org/research/introduction-to-unemployment-insurance https://www.cbpp.org/research/introduction-to-unemployment-i...
- awb 5y ago
  INAL, but when I ran a remote company I had to register my business in the state my employees lived in and pay unemployment tax in their individual home states. If my employees worked outside of their home state (nomadically) then I think the states they travelled to technically want a share of that income, but that it's the employee's responsibility to report that income as being earned in that state, not the employers. The employer continues to pay W2 wages + unemployment tax or 1099 income in the employee's state of residence until the employee changes their residency status. In practice however, nomadic income only typically gets reported for high income employees like professional sports players or entertainers who earn large amounts of publicly identifiable income in different states throughout the year. For an employee to file for unemployment in a state, they would first need to show residency in that state. For example, you can't pass through CA for a week and file for unemployment there.
  - paulcole 5y ago
    > If my employees worked outside of their home state (nomadically) then I think the states they travelled to technically want a share of that income There’s a bit more to it than that. An employee doing work in a location is a possible back door way of establishing nexus in that state for the business. Amazon, for example, knew they had a target on their back so forbid employees from even turning computers on in some states.

gamblor956 5y ago

No, you are treated as a Texan employee and would not be eligible for CA unemployment benefits. Contrary to what the other response stated, it does not matter where your DL address is; it matters where you are actually resident (generally, physical residence). If you were to claim CA unemployment using a CA DL but were residing in TX at the time you were employed, you would be committing fraud. Note that if you hadn't told your employer that you had moved to a different state, generally they can terminate you "for cause", meaning that you would not be eligible for unemployment in either state.

collectedparts 5y ago
I guess it might technically legally be fraud but OTOH I wouldn't call it "wrong" because if you maintained CA domicile you'd keep paying CA income tax on your income. And with TX not having income tax, it's almost like your CA income tax pays into the benefit pool...
- deleted 5y ago
  [deleted]
- gamblor956 5y ago
  If you maintain your CA domicile and continue to pay CA income taxes, then in that example, your physical and legal residence would remain in CA, so you're not a TX resident, you're a CA resident temporarily in TX. (Yes, residency is very complicated for state purposes, as each state has its own definition and thresholds.) Also, unemployment is funded by employers, not income taxes, using an insurance-style scheme.