Colleges Look to Staffing Firms to Allow Remote Work

To address the legal questions and potential HR issues that can arise when employees move across state lines, some universities partner with third-party firms to keep employees on the payroll from afar.

July 29, 2022
A Black man working remotely participates in a videoconference with people on his computer screen.
The pandemic has ushered in a remote work era that provides flexibility for employees and simultaneously creates challenges for employers.
(iStock/Getty Images Plus)

The ubiquity of remote work is one of the many ways the coronavirus pandemic has reshaped the world since March 2020. And while mask and vaccine mandates may be easing, remote work is here to stay. Employees in many fields now expect a certain degree of flexibility to allow them to take more control of their schedules, cut back on commute times and costs, and enjoy the freedom to live where they want.

Higher education workers are no different. A recent survey from the College and University Professional Association for Human Resources shows that many are willing to leave their jobs if remote work demands aren’t met. The Pennsylvania State System of Higher Education recently sold its headquarters in Harrisburg, allowing the 27 employees of the system administration to go remote.

But while remote work may be appealing to employees, it can create headaches for institutions trying to navigate legal issues and policy environments that vary by state. As colleges try to make sense of a rapidly changing world and a maze of legal and tax questions, some are looking to outside staffing services to help them remain in compliance and retain employees.

Remote Work Challenges

A panel at the National Association of College and University Business Officers conference earlier this month identified some of the challenges regarding remote work.

Panelist Eileen Goldgeier, vice president and general counsel at Brown University, described remote work as “one of the most complex areas” she’s seen in her career. The big question, Goldgeier said, is “if you allow employees to work in a different state, are you subject to the personal jurisdiction of that state? And what does that mean for potential liability?”

The answer: it depends.

Variance in state laws adds to the challenges of managing far-flung remote employees. Some states are employer-friendly, while others have laws that are more favorable to workers. Pay frequency, leave policies, remote work benefits and training requirements—such as mandatory sessions on preventing discrimination and harassment—can vary significantly across state lines.

And employees with newfound mobility are increasingly crossing state lines.

“It would be really easy if employees simply worked from home as [they did in] March of 2020, but they’re not,” Goldgeier said. “They are moving to states where there is no income tax, or the land is cheaper, or the public school systems are better, and people are very mobile.”

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Remote Work Solutions

To help make sense of the new world of remote work, the University of Central Florida has commissioned a task force to make recommendations on the topic. While the task force is nascent and hasn’t released findings yet, one thing is clear: UCF officials stress that university employees must be located in the state of Florida.

The UCF website distinguishes between remote workers—those who “work at an alternate worksite within the state of Florida”—and out-of-state employees located elsewhere.

But what happens when a valued UCF employee wants to move out of state? To answer that question, UCF has turned to a third party, Kelly Services. The partnership is structured in a way that allows employees to continue their work at UCF under the umbrella of Kelly Services, which then becomes the employer, thus avoiding complicated legal and tax issues that vary by state.

“They’re employees of Kelly Services with the university providing oversight, performance appraisals, that kind of stuff,” explained Joel Levenson, assistant vice president of tax, payables and procurement at UCF. “We work closely with Kelly. Employee compensation is the exact same as the university. We went through all the benefits that employees were eligible for—health, dental, retirement—and they were able to set up plans that mirrored the university’s benefits plan so that the transition would be seamless, except for the name on their W2s and paychecks.”

On its website, Kelly Services, which did not respond to a request for comment, describes itself as “committed to helping institutions of higher education keep valued team members in their jobs—no matter where they live.” Kelly Services’ website states it has 150-plus university partners.

Of the more than 12,000 employees at UCF, few work remotely out of state; Gerald Hector, UCF senior vice president for administration and finance, puts the number at about 60. So while remote employees moving out of state wasn’t a major issue, he said, UCF proactively partnered with Kelly Services to manage compliance issues. And though out-of-state employees technically had to resign from UCF, he said the transition to Kelly was seamless.

“There was no gap [in pay and benefits]. And that was part of the contemplation that folks had to have. But we wanted to make sure that we’re still taking care of folks and that they don’t feel that impact, even though they no longer will be employees, per se, of the institution,” Hector said.

Kelly Services is one of a number of third-party organizations that serves as the employer of record for colleges who wish to keep out-of-state employees without navigating compliance issues. UCF hired Kelly Services through its standard procurement process, which considered others.

“Kelly has a specific education arm that’s [led] by a vice president who’s a former provost, who could really work with our faculty and understands what it’s like to work in higher ed. And I think that spoke volumes to us,” Levenson said. “Their pricing was on par with everybody else that proposed to us. But it was their dedication towards not just higher education, but education in general [including K-12] … and they speak the language of higher ed, so they stood out.”

FoxHire is another third-party staffing firm that serves as the employer of record for colleges and universities, housing workers under its name to ease human resources headaches for institutions and lessen the burden of managing staffers across state lines.

FoxHire president Colin LaBeau said by email that his firm has worked with 70 different colleges and universities, employing hundreds of workers for all types for such institutions, handling payroll, benefits, time sheets and the other human resources tasks expected of employers.

“Typically the institution has employees they need to be managed by an [employer of record], or they are working with a recruiting agency that found employees that need to be managed by an EOR. We are brought in to be the employer of record because the institution cannot, or does not want to be the employer for the employee(s). We then employ the candidate and consolidate the costs of employment into one invoice, encompassing all the services mentioned above,” he said.

LaBeau believes companies such as his enable colleges to hire the best talent regardless of location, breaking down borders and cutting through HR challenges around taxes and state laws.

“Most colleges and universities are hyperlocalized. So they are not familiar with out-of-state employment laws, regulations, etc. and they don’t have entities in all states. This exposes them to employment law risk. Additionally not being able to hire in all states limits their talent pool,” LaBeau said.

Hector, at UCF, sees a delicate balancing act that employers have to consider, listening to the wants and needs of the workforce while advancing the mission of the university and remaining in legal compliance with employment laws. More workers will demand remote work in the future, both in higher ed and the corporate world, and employers will have to meet those demands. If not, they’ll go elsewhere—and higher ed is having a hard time finding quality workers.

Hector said colleges must have empathy for their employees and changing life circumstances that take them out of state, but also “there are rules and regulations that you have to adhere to.”

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