As digital nomad trend gains steam, employers face tax, legal risks

With reliable Wi-Fi as their best friend, more workers are hitting the road. And this far into the COVID-19 pandemic, employers and employees alike are letting a key lesson soak in: Workers don’t have to be tied to the employer’s office to be productive. While some remote employees choose to work from home, others embrace their adventurous side, becoming what’s come to be known as digital nomads. As long as the work gets done, employers may think they don’t have to worry about their employees’ whereabouts. But tax and legal compliance issues can put a damper on that free and easy attitude.

The rise of digital nomads

Just who are digital nomads? Many are part of the van-life movement, living and working out of RVs or vans, while others are globetrotters, leaving the confines of their home country to take up residence at various places around the world.

COVID didn’t create digital nomadism, but the lifestyle has gained popularity since the pandemic untethered so many from their workplaces. MBO Partners, a company helping organizations manage contingent workers, released research in September 2021 focusing on the rise of the trend and said, “Digital nomads defy a single definition, yet all choose to combine working remotely and traveling for various reasons and lengths of time.”

The researchers found that the pandemic sparked a change in the makeup of digital nomads. A key finding: It’s not just independent workers (such as freelancers and independent contractors) making up the ranks of digital nomads. More people with traditional jobs are now choosing the lifestyle.