Secrets to a Successful Remote or Hybrid Work Program For Nonprofits
Much of the nonprofit sector turned to remote work out of necessity during the COVID-19 pandemic. Now, as offices reopen, organizations need to decide how remote work will fit into their business strategy. What many leaders don’t realize is that remote work carries unique risks and challenges — especially when it comes to tax and compliance issues. However, by adopting a proactive approach to remote and hybrid working arrangements, nonprofits can avoid these headaches and chart a more successful course for the employees and their organizations.
Although remote work has been growing for some time, the pandemic accelerated the trend within nonprofits. Now, whether it takes the form of hybrid or fully remote work, flexible work options appear to be here to stay in the nonprofit sector. According to a 2021 PRM Consulting Group study, more than three-fourths of nonprofit leaders plan to set up a flexible work schedule for employees.
There are many reasons for nonprofits to support a more virtual workforce. In her article for the National Council of Nonprofits, “The Workforce is Changing. It's Time to Consider Making Hybrid Work Permanent,” Amy Silver O’Leary highlights key benefits, including:
- Nonprofits need to provide flexibility to retain and attract talent.
- Nonprofits “can — and should — promote a work culture that prioritizes wellbeing and balance.”
- Hybrid and remote work can promote a “more humane and equitable approach to work.”
As nonprofits embrace hybrid and remote work, it’s critical that they create a plan to navigate risks and build out a successful experience. Here’s how to map out a successful remote work program in the nonprofit sector.
Know the Risks of Remote Work
The first step in building a successful remote work program is understanding the risks for your employees and organization. Unfortunately, these risks are higher than most leaders realize. Organizations with employees who are working across state or international borders should consider risks relating to these three areas.
1. Duty of Care
If employees are scattered across locations with little oversight or guidance, it’s difficult to keep them safe. If political unrest erupts, a natural disaster strikes or a new pandemic breaks out, employers need to know where their employees are located so they can take the necessary steps to help protect them.
2. Tax and Legal Complexities
Whether they’re traveling across state or international borders, employees could be triggering tax and legal obligations by working in new areas. For example, there may be tax reporting and withholding obligations for the organization and tax-return-filing obligations for the employee. International remote work may require appropriate immigration status and attention to employment law requirements. Failure to meet these tax and legal requirements can result in significant financial, legal and reputational risks for both the company and employees.
3. Lost Incentives
Tax obligations can change from location to location. Employees that work in multiple locations may need to pay extra income or social security tax, resulting in decreased pay. There can also be cash flow issues if employees are subject to withholding or tax payment requirements in multiple locations. Upfront planning can identify solutions to prevent employee dissatisfaction and potentially, the loss of much-needed talent.
Plan Out Remote Work as Much as Possible
Nonprofits have an opportunity to build an internal structure that protects against remote work risks and promotes a better work environment. Here’s how to create a more successful remote work program that reduces tax and compliance risks.
1. Make a Plan
To create the best remote work experience possible, it’s important to understand the rules that coincide with potential work locations. This might mean digging into everything from tax rules and immigration challenges to payroll issues that may affect compensation in a region.
At the same time, it’s important to map out a plan for tracking employee whereabouts. This may include using software to encourage check-ins or monitor work locations. It may also take the form of pre-approval processes for each new work location. In all cases, it’s important to create a plan that makes it easy to understand where employees are working and how long they’re working there.
2. Build Out Processes
When building out processes, nonprofits can benefit from gathering cross-functional input. This means bringing in leaders from immigration, payroll, legal and other departments to identify the biggest obstacles that could plague a specific area. From there, it will be easier to decide what workarounds to plan for as well as what jurisdictions your team may want to label “off-limits” for remote work.
3. Craft and Communicate a Policy
The best remote work programs include a policy that adheres to company and employee needs as well as technical and compliance-related requirements. Although the specifics of policies will vary from one organization to the next, it’s important to create a guide that shows employees what the rules are and what support they will have in any given location. It is also critical to make sure the policy is clearly communicated, and that appropriate guidance and training are provided to all employees.
The pandemic may have helped accelerate remote work in the nonprofit sector, but it will only continue to grow in the future. The sooner organizations start planning for successful remote work outcomes, the easier it will be to avoid challenges, attract top talent and build a work environment that employees appreciate.
With more than 25 years of global tax experience, Eric Loff serves as managing director for Global Tax Network. He is known for leading by example and finding the strengths in others, improving communication so all participants are engaged in a project, and serving as a bridge between a company and its expat employees. As a specialist in managing international assignment programs and the related tax, human resource and payroll matters, he serves as a frequent speaker on global mobility topics.