The remote workforce and the fiscal risk of equities are increasing within healthcare.

As companies face the scarcity and risks of face-to-face encounters, the remote workforce will likely continue to grow within healthcare.

However, remote work could have substantial tax implications if your healthcare organization offers equity compensation, such as stock options or restricted stock. Healthcare leaders who spot and avoid these potential mobile equity challenges now could avoid tax violations, regulatory penalties, and talent shortages in the future.

Here’s what’s driving this increase in tax risks and what you can do about it.

Stock compensation has long been a popular incentive within healthcare, but today remote work is leading the popularity list. According to a Statista survey conducted in 2021, 80% of remote workers would recommend remote work to a friend. This makes remote positions in the healthcare sector more attractive to companies looking to fill labor shortages.

Remote work is likely to continue to grow within the healthcare industry. Unfortunately, the increased remote work could cause significant tax complications for companies that reward employees with equity compensation.

Here are three common mobile equity challenges that arise from untethered remote work:

1. Tax violations

The earnings period for equity compensation tends to extend over a significant period. Suppose an employee is working across state or international borders during that period. In that case, they may create withholding requirements in additional jurisdictions that payroll and stock management teams must be aware of. As a result, remote employees could create payroll withholding violations for the employer, potentially facing double taxation or attracting additional attention from regulators.

2. Unexpected reporting obligations

When employees travel from country to country or state to state while working, their reporting obligations may change with each new destination where they work. And that can create tax complications both domestically and internationally.

3. Diminished compensation

Because different jurisdictions apply different social security, withholding, and tax laws, remote employees may face tax implications that diminish the value of their original equity compensation package. Suppose they are paying significantly higher compensation taxes than initially planned. In that case, they may feel under-compensated and undervalued, leading to frustrated employees and an even more severe talent shortage in the healthcare industry.

How can healthcare overcome mobile equity compensation challenges?

Healthcare leaders can avoid these equity compensation problems by being proactive. Avoid the consequences with these steps:

– Create clear remote work policies. Your organization’s policy should be tailored to your company’s needs but should include guidelines outlining where employees can and cannot work. It’s also important that your remote work policies are centralized. Otherwise, departments may make their own rules and create even more complications.

– Develop multi-departmental processes. You can also plan to overcome tax and compliance issues by outlining transparent processes. However, managing remote employees may require expertise in immigration, corporate tax, payroll, and more. That’s why it’s essential to bring in leaders and specialists from across the organization and additional vendors to create processes that preemptively stop tax violations.

– Embrace administrative technology. Most healthcare companies need to be more staff and manage remote employees, and their tax needs could require heavy administrative work. That’s why technology can help ease workloads by automating processes, controlling tax rules, or tracking employees.

Taking a proactive stance makes it possible to embrace remote work trends and provide equitable compensation while avoiding the tax traps on the horizon.

With information from GTN.com