21 June 2005

Telecommuting the Wave of the Future?

Is telecommuting the way we'll work in the future? From Inescapable Data:
When we interviewed companies for our book and researched the changes in corporate worklife in general, we became aware of the huge shift to non-office office workers. Many large companies such as IBM and Sun boast that currently 33% of their workforce has no corporate ‘office space’ any longer, possibly heading toward 50% or higher.

Well, sure, Sun and IBM have a lot of telecommuters. But what about others? Rep. Frank Wolf (R-VA) is demanding that federal agencies certify that they are increasing telecommuting opportunities for their work forces, on pain of losing funding (Kansas City Star). This article says that 6% of federal employees already do commute.
Wolf began championing a robust telecommuting program in the government about five years ago as a way to help the Washington area cut traffic congestion and pollution. But agencies have moved slowly on the issue despite encouragement from the Office of Personnel Management and General Services Administration. Many federal managers are not comfortable with the concept or are concerned that employees who work at home may be less productive.

Last year, Wolf directed the departments of Justice, State and Commerce; the Small Business Administration; and the Securities and Exchange Commission to file reports showing that eligible workers are permitted to telecommute.

Wolf has asked the Government Accountability Office to review the telecommuting reports.

Because the House expanded the jurisdiction of his subcommittee, Wolf also would require the National Science Foundation and the National Aeronautics and Space Administration to certify that they provide ample telecommuting opportunities for their work forces. Wolf asked GAO to review their plans as well.

Rep. Wolf is probably looking for ways to trim federal spending on office space and payrolls (so, for example, the pool of federal recruits don't live within daily commuting distance of the federal office). I understand some states have seen fit to modify their tax laws accordingly.
Most notable is a recent case in New York. This spring the New York Court of Appeals ruled against a Tennessee resident, Thomas Huckaby, who telecommuted for a New York company. Huckaby filed New York nonresident income tax returns, allocating his income between Tennessee and New York, based on the number of days he spent working in each state. Because he spent one-quarter of his time in New York, he paid taxes to New York on one-quarter of his income.

However, under the convenience of the employer rule, if a nonresident chooses to telecommute to a New York employer some or most of the time, the nonresident must allocate the income earned at home to New York. The court said New York could tax the telecommuter on one hundred percent of his income.

This is considered the most aggressive tax case to date that targets telecommuters, and it has drawn harsh criticism from the International Telework Association & Council (ITAC), which estimates 44 million telecommuters in the U.S. and sees the ruling as a discouragement for employers to offer telework.

If telecommuting becomes as widespread for other farmable services as it is at Sun Microsystems and IBM (improbable, of course) then we could in fact see a telecommuting workforce that really had 44 million. (And if this diet works, my weight might really approach what it says on my passport!)


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