Requirements for Reporting Wages of Multi-State Workers
When an employee performs services in South Carolina and some other state, the question
of whether that employee is covered by the SCES Law is determined by one of four tests.
Similar tests have been adopted by a majority of the states. These uniform provisions have
the objective of avoiding conflicts and overlapping coverage between states where an
employee performs services in more than one state for a single employer.
The application of any of the tests must result in the consolidation of the reporting
of the employee’s wages in one state or that test does not apply. The tests are
applied in the following order to each employee and not the employer:
- Localization
An employee’s services are in employment and "localized" in a state
if all of his services are performed in the state or if a majority of his services are
performed in that state with incidental services performed outside of that state.
- Base of Operations
If test #1 does not apply in any state, an employee’s services are in employment
in a state if some of his services are performed in that state and his base of operations
is in that state. "Base of Operations" is interpreted as the place of more or
less permanent nature from which the employee starts his work and to which he customarily
returns to perform the terms of his contract with his employer.
- Place of Direction and Control
If tests #1 and #2 do not apply in any state, an employee’s services are in
employment in a state if some of his services are performed in that state and the place
from which the employer exercises general direction and control over the employee is in
that state.
- Residence of Employee
If tests #1, 2 and 3 do not apply in any state, an employee’s services are in
employment in a state if some of his services are performed in that state and his
residence is in that state.
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