Overview: Administering Out-of-State Employees
Occasionally employees are hired to work remotely from locations outside of California. Stanford is required to comply with all employment laws for the state where the work is being performed. These requirements vary from state to state and may include additional compliance requirements beside those relating to employment. Hiring or reassignment of employees to positions outside of California must be supported by an important University business purpose and not be merely an accommodation to the employee. Reference Administrative Guide Policy 2.2.12: Out-of-State Employees.
On this page:
- Approval of Out-of-State Employment Relationships
- Administration of Out-of-State Employees
- Out-of-Country Employment
Approval of Out-of-State Employment Relationships
Out-of-state employment relationships must be approved in advance by the cognizant Dean, Director, Vice-Provost or Vice-President. The approval must include the key University business reasons for the assignment. Departments are charged a $500 set-up fee and $200 annually for each out-of-state employee to defray administrative costs.
Administration of Out-of-State Employees
An Out-of-State Employee Approval Form is required for each out-of-state employment relationship. This form is submitted to Payroll. Payroll starts the employer registration process, if Stanford is not already set up in the requested state, and modifies the tax record of the employee.
California requires reporting and withholding for work performed in California. For that reason, it is necessary to track days that out-of-state employees work in California so taxes can be adjusted accordingly. Departments should track days and report them to Payroll each November on the Out-of-State Employee Days Worked in California Form.
As with out-of-state employment arrangements, Stanford is required to comply with all employment laws in any foreign country where an employee has been retained. Making arrangements to register Stanford as an employer in a foreign country and to comply with the laws of that country can be a costly and time-consuming process. Departments are advised that implementation time to set up an employment relationship may exceed six months. With this in mind, it is recommended that Departments explore billing arrangements with a temporary agency or University local to the employee before attempting to setup a direct employment relationship. If these arrangements are not successful, the Department should contact Payroll for instruction on starting the process of contracting with a payroll service provider local to the employee. The Department will be required to reimburse the Controller's Office all necessary charges to meet all employment compliance requirements for the arrangement.