3 Common Issues When Employees Relocate without Notifying Their Employer First

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National Employee Benefits Practice Leader
Lumity, Inc.

As employees embrace the ability to “work from anywhere”, it’s critical to point out a common mistake. Before relocating, it’s essential employees let you know before they make the move.

If they move first, then notify you, these are common issues we've seen employers encounter.

Health plan coverage

If an employee moves outside of their health plan’s coverage area, they need to let you know so you can confirm benefits are available in the region they’re moving to.

  • Some plans have limited coverage areas, like an HMO. If they move outside their plan’s coverage area, the 30-day clock is ticking for them to submit a Qualifying Life Event to elect new coverage (assuming you’re set up to offer benefits in the new state).
  • Some local jurisdictions may bring new benefits compliance requirements for employers. As an example, if even one employee performs work in San Francisco, you may be subject to the San Francisco Health Care Security Ordinance (SF HCSO).
  • Disability can function differently from state to state, too.

Payroll taxes

Your company could be subject to state income tax withholding, and employees may find out the hard way that they need to pay income taxes to two states on the same earned income.

Local labor laws

Of specific interest are the state and local rules around workers’ compensation, unemployment insurance, wage & hour laws, training, and the pandemic has brought a slew of local paid leave ordinances.

It’s essential employees let you know before they move.

To help you to avoid any unpleasant surprises for your employees, I encourage alerting your people regarding potential health plan or payroll issues that may arise from a change in location.

And, on the benefits front, coordinate closely with your broker. If you have questions, my team and I are here to help. 

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