I work in Washington state as an on-site rep for my company, which is based in Idaho. I’m the only one working in Washington while the company has over 500 employees in Idaho. I’ve been in this setup for a while, working with customers in Washington at their location, with no remote option. The company pays me as a full-time employee with benefits, but I’ve hit a few issues recently.
My wife is about to give birth, and I asked for two days off. The company said no paid leave because Washington offers paid paternity leave, but Idaho doesn’t. I started to question why I’m paying Idaho taxes when I live and work in Washington, and HR said it’s because they don’t have a tax account in Washington. It just doesn’t seem right to me.
Now, HR is treating me like I’m remote and claiming they don’t have to follow Washington’s rules since I’m the only one here. They said they’d let me take the two days off without pay and that I could file for Idaho FMLA after the birth, but I’d have to wait for tax season to get my Idaho income taxes refunded.
I don’t want to lose my job, but it feels unfair. I gave them more than 30 days’ notice for my time off, and now I feel stuck with paying taxes that don’t even apply to my situation. Is there a way I can make them stop withholding Idaho income taxes from my paycheck? This whole thing has me confused.
It sounds like your HR person doesn’t really understand the tax laws. When you work in a state, the company must register with that state and follow its employment and tax laws. You could file a complaint with the Washington Department of Labor, but I’m worried the company might just find some other reason to fire you.
@Sam
That’s my concern too. The company has been struggling financially. They lost $30 million last year and are expected to lose another $15 million this year. The only hope would be if the customer puts up a fight for losing me as their rep, but I’m not sure they will.
Fielder said: @Blake
Could you work directly for the customer instead? They’re probably paying the company a lot more than they pay you.
I wish it were that easy. I have access to confidential company information, and I manage about 20 to 30 employees in Idaho. I handle some work in Oregon, California, and Canada too, all while working out of the customer’s office in Washington. It’s complicated even for me, and I don’t know if any of it is legal. It feels like I should be getting paid by both companies, but they want me to stay with just one.
“They don’t have to follow any of Washington state rules…”
That’s just not true. The company is big enough to know they can’t ignore Washington’s laws. You could increase your allowances on the Idaho W4 so they don’t withhold any taxes. Check out this form to see if it works for you.
@TIFF
I’m not sure if I should claim more allowances than I qualify for. The form specifically says not to, but they’ve already told me I’m not eligible for FMLA in Washington. They still won’t pay me taxes there, and they’re telling me to just file for a refund come tax season. Last year it took almost 9 months to get my refund.
@Blake
You might get a full refund for Idaho taxes if you claim more allowances, but the company will likely report it as wages. You could also contact the Idaho Department of Revenue to clarify, but it’s a way to make sure you get your money back. If the company doesn’t cooperate, you can report them to the state.
@River
If the company fires you, that’s an easy case for retaliation. Employment lawyers can help you prove it. I suggest talking to one before taking action, so you know what evidence to keep.
Han said: @River
If the company fires you, that’s an easy case for retaliation. Employment lawyers can help you prove it. I suggest talking to one before taking action, so you know what evidence to keep.
It depends on whether the unemployment agency checks with the state’s revenue department. Some states do this, while others don’t. If you file a claim in Washington, the company might not realize they’ve made a mistake unless they cross-check with other departments.
@Blake
It doesn’t matter if you claim too many allowances. The goal is to avoid having Idaho tax withheld, especially since you don’t owe any Idaho income tax unless you work in Idaho itself.
If they let you go, you wouldn’t be eligible for unemployment insurance in either Idaho or Washington. If you apply in Washington, the company will come under legal scrutiny for not registering there as an employer.
You’re right. The company is wrong in this situation.
You do not owe Idaho taxes. You’re entitled to Washington benefits, just like anyone else working there. The company shouldn’t treat you worse because you’re the only employee from Washington. If you want to get this sorted, you could report the company to the Department of Labor, but they might retaliate.