Crews across state lines: withholding, unemployment and comp

Withhold for the state where the work is done, unless a reciprocity agreement with the worker's home state applies, or the work state lets a nonresident work a set number of days there first. New York, for one, does not require withholding for a nonresident it expects to work there 14 days or fewer in the year; Illinois, for nonresidents with 30 days or fewer of work there. Past the limit, withholding starts. The home state can also require withholding on its residents' out-of-state wages. Local income taxes can follow the work location too.

State unemployment tax is paid to one state for each worker, chosen by the same tests in every state's law, in order: where the work is localized; if nowhere, the base of operations, if any work is done there; then the place the work is directed and controlled from, if any work is done there; then the worker's home state, if any work is done there. A crew based in one state on a temporary job in another usually stays with its home state for unemployment while withholding changes.

A policy covers the states it lists, including those named for other-states coverage; add a state before ongoing work starts there. Other-states coverage never reaches the four state-fund states: in North Dakota, Ohio, Washington and Wyoming the state fund is the only insurer, so coverage there comes from the fund. Class codes and their rates differ by state for the same work.

Federal wage determinations are issued by county and type of construction, so a job in a new county can mean a different determination or different rates. State laws, thresholds, certified payroll schedules and contractor registrations change at the state line.

The registrations and reports a new work state can need:

Decide per job, before the crew mobilizes, which state governs withholding, unemployment and comp for each worker, and record it on the job, so payroll applies it from each time entry's work location.