They Want Their Due

Hey, everybody, Drew McLellan here from Agency Management Institute, coming to you again from beautiful Pacific Beach. Last week's video, I talked about some of the financial consequences of either hiring someone who lives in a different state than where your agency is based or allowing an employee who works for you and has lived in the state where your agency is based move to a different state. There are financial consequences to both of those choices. I got a lot of questions about it, so I wanted to give you a little more detail about what you need to do if you're considering either of those things. Number one, whether you hire someone who lives in a different state, or a current employee moves to a different state, you need to contact that state's Secretary of State Office, and you need to register your business. You need to say to them that you are doing business in their state. Now, they're going to want a physical address. It doesn't mean you have to have an office in the state, but you, at the very least, need to give them your employee's physical address. A PO Box will not be accepted. The other thing you need to do, and you know what this means, you need to contact the Department of Revenue and, again, tell them that you are doing business in their state, you have an employee in their state. Now, it doesn't matter if you have clients there. It doesn't matter if your employee travels in and out of the state to do work. What each state cares about is the fact that you are employing someone in their state. So they're going to care about workers comp. They're going to care about getting their share of the state taxes for that person at the very least. And in many cases, depending on the state, they're going to want to make sure that you pay income tax, state income tax, to them as well as to your home state for any business that's either done in that state or that is done by the employee in that state. So every state is different. You're going to need to call and get the details. But at the very least, you have to contact the Secretary of State and have a physical address for them and the Department of Revenue because they're going to want their pound of flesh, and they want to know that you are doing business in their state. Many agencies, right or wrong, legal or illegal, quite honestly, many agencies have a list of certain states that are so business-unfriendly that they will not hire someone who's going to live in that state, and they will not maintain an employee who wants to work in that state. So you've got to do some homework and your due diligence before you say yes or before you make that job offer to an out-of-state employee. They may be absolutely worth every dime, but I want you to make an informed decision before you go down that path, all right? I'll be back next week. Talk to you then.