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Payroll for Employees Working Outside of California

Occasionally, employees are hired to work remotely from locations outside of California. Stanford is required to comply with all employment laws for the state or country where the work is being performed. These requirements vary and may include additional compliance requirements besides those relating to employment. 

Hiring or reassigning employees to positions outside of California requires an appropriate university business purpose. Accommodating an employee for a nonbusiness reason is not allowed. Refer to Administrative Guide Policy 2.2.2: Out-of-State Employees for more information.

The dean, director, vice-provost or vice-president who is aware of the employment circumstances must approve all out-of-state employment relationships in advance and provide the key university business reasons for the assignment. To defray administrative costs, departments are charged a one-time $500 set-up fee and a $200 annual fee for each out-of-state employee.

An Out-of-State Employee Approval Form is required for each out-of-state employment relationship. This form is submitted to Payroll per the instructions on the form. California requires tax reporting and withholding for work performed in California. For that reason, tracking the days that out-of-state employees work in California is required, and taxes are adjusted accordingly. Department administrators should report the number of days to Payroll each November on the Out-of-State Employee Days Worked in California Form.

If an employee moves back to California, their department must notify Payroll prior to the relocation date by sending an email to @email.

As with out-of-state employment arrangements, Stanford is required to comply with all employment laws in any foreign country where an employee is retained. For more information, refer to Stanford Personnel Working Abroad on the Global Business Services website.

Last Updated: Sep 15, 2021