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Except it is their jurisdiction. If you have an employee in a state, you need to comply with all the regulations in regards to employees. For example, if you’r

Except it is their jurisdiction. If you have an employee in a state, you need to comply with all the regulations in regards to employees. For example, if you’re based in Tennessee and you if hire an employee in Washington and decide you only need to follow Tennessee minimum wage policy, Washington has every right to fine you or take you to court under Washington law.

devoutsalsa 5y ago
Because it’s untenable.
- Dangeranger 5y ago
  What is untenable exactly? That a state is provided the ability to enforce their laws? National governments are allowed to enforce laws outside their own borders, such as intellectual property and copyright. While challenging to enforce, it is possible.
  - giantg2 5y ago
    "National governments are allowed to enforce laws outside their own borders, such as intellectual property and copyright." I believe those are done through treaties. I'm not sure how the federal government weighs in on this since they have the authority on interstate commerce, which this falls under.
    - Dangeranger 5y ago
      The states also signed laws, akin to treaties at the time, agreeing to allow other states to enforce certain domains of law within their jurisdiction. This is part of how the federation of the United States of America came into being.
      - giantg2 5y ago
        Are these general or specific? I know some laws have been passed like a treaty between states, especially ones that border each other. The ones I know are very specific.
    - zie 5y ago
      Not really, or not always. An example: The IRS taxes every US citizen on all income, regardless of where they live. They didn't go setup tax treaties with every country. If I'm a US citizen living in North Korea, I still have to file US taxes every year, despite the 2 countries essentially hating on each other for decades.
      - giantg2 5y ago
        Sure, but that's devoid of the international enforcement mentioned. If your assets are in North Korea or a Swiss bank, then they can't force you to pay it. If your assets are in US accounts, then they could easily do so. I imagine there are other countries that we do have treaties with (or even if the bank has branches/business in the US so that the government doesn't make their life difficult) that would cooperate in freezing your international assets held in those countries too.
        zie 5y ago
        I agree, enforcement matters. My opinion: In the last 50+ years, it's been a very bad bet to be against the USA. They generally get whatever they want. If that's right or not, is certainly debatable.
        devoutsalsa 5y ago
        The way things are going these days, I would never move to a place that doesn’t have a current agreement with the United States and assume it’d stay that way.
- kayodelycaon 5y ago
  In what way are laws for employing someone in a state indefensible? You don’t get to set up shop in a state with low taxes and minimum wage then pay your employees in another state using whichever state’s laws you prefer.
  - notch656a 5y ago
    Except in this case the 'shop' is in Illinois. A California resident commutes his bits to Illinois and somehow in all it's wisdom California wants to exercise itself outside of its jurisdiction into the shop in Illinois.
    - gamblor956 5y ago
      No, in this case the shop is in California, where the California resident is performing his work, which is then transmitted to the office in Illinois. CA gets to regulate the company with respect to its CA operations, i.e., that employee in CA. The CA regulations don't apply to any of the company's non-CA employees. This has always been the rule with respect to employees working in other jurisdictions.
      - jleyank 5y ago
        I recall that Kansas and Missouri had a tax arrangement as lots of people lived on one side and worked on the other (there are two Kansas City’s). This meant that only the excess was paid to whichever had the higher tax rates although both forms were filed.
- nawgz 5y ago
  I find it comical to see you assert, in 3 words, that states shouldn't have the ability to exercise their regulatory powers to protect their citizens on the singular basis that the entity subject to regulations is outside their border. The real "untenable" thing is proposing that corporations can neuter state laws entirely by the simple act of incorporating in not that state. I'm sure that wouldn't lead to a race to the bottom or anything, the US definitely doesn't already have issues with corporate-owned states or anything
  - WkndTriathlete 5y ago
    I see you didn't bother to read the article. I have no problem with California exercising its sovereignty over its own citizens. The employee in question should have been protected by California laws, being a resident of California. What the article's author relates is California asserting sovereignty over an entity that has no nexus or revenue derived from California. This is the overreach and should be outright banned at the Federal level, otherwise there's nothing stopping a state from passing a law that requires companies to pay $30,000 tax for the next five years for every employee that vacations in that state. Do we really want to stomp small businesses with having to know the business tax codes for all fifty states in this age of remote work? I think not. It's about as stupid as the five states in the US that decide they can impose income tax on non-citizens of those states if the employer resides in that state.
    - lovich 5y ago
      They have nexus in California the moment they engage in business with an entity in California. When they hired an employee in California the employee was the entity and hiring them to do work while in California was engaging in business in California. The idea that the employees and the work they do aren’t part of the business is some new idea that I hope doesn’t gain traction. Say the federal government did allow for this line of reasoning and prevented states from treating remote employees as having nexus in the state they live and work in. How does that not end up with every company incorporating in one state and hiring all their employees in other states so they can avoid all state level regulation?
    - 5y ago
dismantlethesun 5y ago
Lack of physical presence should exempt you from prosecution from a states laws. They are of course free to capture anything that crosses their border, which in this case ought to mean that your company won’t be able to send money to the state.
- azernik 5y ago
  An employee in a state is physical presence
  - pclmulqdq 5y ago
    Current US employment and business laws are not set up well for remote work at all. Several states say different things about this, and there is probably going to be a reckoning on this subject soon.
  - dismantlethesun 5y ago
    I don’t think I should be physically present in the USA just because I transferred money to a USA citizen in exchange for services. However USA law defines this, I think is wrong. That’s what I’m saying. The USA is an outlier in many ways. It taxes it’s citizens outside of the country, forces awkward bilateral trade agreements , and is not at all harmonized with work laws of other countries. An office is a physical presence to me. A single person working from their own house is not.
- Dangeranger 5y ago
  Is the company not deriving value across the state border? Is the employee not being compensated across the state border?
  - notch656a 5y ago
    The employee is deriving value across the border. The shop itself is in Illinois, where they derive value from bits and bytes within their state. Charge the employee with any tax crimes, not the company.
Asooka 5y ago
It should be on the employee to pay the relevant tax on the income they receive, anything past that is outside the state's jurisdiction, as the company has no physical presence or business there. A government doesn't have the power to enforce its laws beyond its borders, without specific agreements in place. Does every state have the relevant agreement with the state of California to allow it to enforce its laws on their territory? Can the state of California even sue someone that never entered their jurisdiction?
- jleyank 5y ago
  Worker resides in California therefor they and their company are tangled up there. 1099’s.
- mumblemumble 5y ago
  You do have presence and business there. You're employing residents of that state. According to the law, that employment arrangement takes place within that state's borders.
- solenoidalslide 5y ago
  If a company from Virginia does business with an employee from California, then business is taking place between entities of Virginia and California, thus Virginian and Californian laws must be followed. It is that simple.

devoutsalsa 5y ago

Because it’s untenable.

Dangeranger 5y ago
What is untenable exactly? That a state is provided the ability to enforce their laws? National governments are allowed to enforce laws outside their own borders, such as intellectual property and copyright. While challenging to enforce, it is possible.
- giantg2 5y ago
  "National governments are allowed to enforce laws outside their own borders, such as intellectual property and copyright." I believe those are done through treaties. I'm not sure how the federal government weighs in on this since they have the authority on interstate commerce, which this falls under.
  - Dangeranger 5y ago
    The states also signed laws, akin to treaties at the time, agreeing to allow other states to enforce certain domains of law within their jurisdiction. This is part of how the federation of the United States of America came into being.
    - giantg2 5y ago
      Are these general or specific? I know some laws have been passed like a treaty between states, especially ones that border each other. The ones I know are very specific.
  - zie 5y ago
    Not really, or not always. An example: The IRS taxes every US citizen on all income, regardless of where they live. They didn't go setup tax treaties with every country. If I'm a US citizen living in North Korea, I still have to file US taxes every year, despite the 2 countries essentially hating on each other for decades.
    - giantg2 5y ago
      Sure, but that's devoid of the international enforcement mentioned. If your assets are in North Korea or a Swiss bank, then they can't force you to pay it. If your assets are in US accounts, then they could easily do so. I imagine there are other countries that we do have treaties with (or even if the bank has branches/business in the US so that the government doesn't make their life difficult) that would cooperate in freezing your international assets held in those countries too.
      - zie 5y ago
        I agree, enforcement matters. My opinion: In the last 50+ years, it's been a very bad bet to be against the USA. They generally get whatever they want. If that's right or not, is certainly debatable.
      - devoutsalsa 5y ago
        The way things are going these days, I would never move to a place that doesn’t have a current agreement with the United States and assume it’d stay that way.
kayodelycaon 5y ago
In what way are laws for employing someone in a state indefensible? You don’t get to set up shop in a state with low taxes and minimum wage then pay your employees in another state using whichever state’s laws you prefer.
- notch656a 5y ago
  Except in this case the 'shop' is in Illinois. A California resident commutes his bits to Illinois and somehow in all it's wisdom California wants to exercise itself outside of its jurisdiction into the shop in Illinois.
  - gamblor956 5y ago
    No, in this case the shop is in California, where the California resident is performing his work, which is then transmitted to the office in Illinois. CA gets to regulate the company with respect to its CA operations, i.e., that employee in CA. The CA regulations don't apply to any of the company's non-CA employees. This has always been the rule with respect to employees working in other jurisdictions.
    - jleyank 5y ago
      I recall that Kansas and Missouri had a tax arrangement as lots of people lived on one side and worked on the other (there are two Kansas City’s). This meant that only the excess was paid to whichever had the higher tax rates although both forms were filed.
nawgz 5y ago
I find it comical to see you assert, in 3 words, that states shouldn't have the ability to exercise their regulatory powers to protect their citizens on the singular basis that the entity subject to regulations is outside their border. The real "untenable" thing is proposing that corporations can neuter state laws entirely by the simple act of incorporating in not that state. I'm sure that wouldn't lead to a race to the bottom or anything, the US definitely doesn't already have issues with corporate-owned states or anything
- WkndTriathlete 5y ago
  I see you didn't bother to read the article. I have no problem with California exercising its sovereignty over its own citizens. The employee in question should have been protected by California laws, being a resident of California. What the article's author relates is California asserting sovereignty over an entity that has no nexus or revenue derived from California. This is the overreach and should be outright banned at the Federal level, otherwise there's nothing stopping a state from passing a law that requires companies to pay $30,000 tax for the next five years for every employee that vacations in that state. Do we really want to stomp small businesses with having to know the business tax codes for all fifty states in this age of remote work? I think not. It's about as stupid as the five states in the US that decide they can impose income tax on non-citizens of those states if the employer resides in that state.
  - lovich 5y ago
    They have nexus in California the moment they engage in business with an entity in California. When they hired an employee in California the employee was the entity and hiring them to do work while in California was engaging in business in California. The idea that the employees and the work they do aren’t part of the business is some new idea that I hope doesn’t gain traction. Say the federal government did allow for this line of reasoning and prevented states from treating remote employees as having nexus in the state they live and work in. How does that not end up with every company incorporating in one state and hiring all their employees in other states so they can avoid all state level regulation?
  - 5y ago

dismantlethesun 5y ago

Lack of physical presence should exempt you from prosecution from a states laws. They are of course free to capture anything that crosses their border, which in this case ought to mean that your company won’t be able to send money to the state.

azernik 5y ago
An employee in a state is physical presence
- pclmulqdq 5y ago
  Current US employment and business laws are not set up well for remote work at all. Several states say different things about this, and there is probably going to be a reckoning on this subject soon.
- dismantlethesun 5y ago
  I don’t think I should be physically present in the USA just because I transferred money to a USA citizen in exchange for services. However USA law defines this, I think is wrong. That’s what I’m saying. The USA is an outlier in many ways. It taxes it’s citizens outside of the country, forces awkward bilateral trade agreements , and is not at all harmonized with work laws of other countries. An office is a physical presence to me. A single person working from their own house is not.
Dangeranger 5y ago
Is the company not deriving value across the state border? Is the employee not being compensated across the state border?
- notch656a 5y ago
  The employee is deriving value across the border. The shop itself is in Illinois, where they derive value from bits and bytes within their state. Charge the employee with any tax crimes, not the company.

Asooka 5y ago

It should be on the employee to pay the relevant tax on the income they receive, anything past that is outside the state's jurisdiction, as the company has no physical presence or business there. A government doesn't have the power to enforce its laws beyond its borders, without specific agreements in place. Does every state have the relevant agreement with the state of California to allow it to enforce its laws on their territory? Can the state of California even sue someone that never entered their jurisdiction?

jleyank 5y ago
Worker resides in California therefor they and their company are tangled up there. 1099’s.
mumblemumble 5y ago
You do have presence and business there. You're employing residents of that state. According to the law, that employment arrangement takes place within that state's borders.
solenoidalslide 5y ago
If a company from Virginia does business with an employee from California, then business is taking place between entities of Virginia and California, thus Virginian and Californian laws must be followed. It is that simple.