Author Topic: Employer vs Employee - moving  (Read 1861 times)

doneby35

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Employer vs Employee - moving
« on: April 25, 2021, 05:00:35 PM »
Here's a scenario, curious if anyone has any thoughts or ideas.

I'm moving to another state soon and will let my employer know beforehand. Everything could technically be done from home using a computer, however it is only because of covid that i'm not currently going to the office.
So there are 2 different responses I could hear after letting the employer know:
1. Sure no problem, let's just make sure everything is updated with HR.
2. That's not going to work. We don't have presence in that state.

My question is regarding response #2. I'm perfectly ok with losing the job, BUT do I have to quit after getting that response? or can they just let me go instead for the possibility to collect some unemployment?

Rdy2Fire

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Re: Employer vs Employee - moving
« Reply #1 on: April 25, 2021, 05:13:10 PM »
Really depends on your state and them, they could take that as a voluntary resignation and consider it your notice. If that's the case you typically can't collect unemployment. If they say you're fired then in theory you could collect but they could challenge it and if they wanted to be 'nice' they could lay you off and then you could collect. Some of it depends on how it goes down, your state and your relationship with them but hopefully they will just tell you to work from home in the new state.

Blackeagle

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Re: Employer vs Employee - moving
« Reply #2 on: April 25, 2021, 05:13:50 PM »
The could probably also choose to fire you, which may make you ineligible for unemployment.

doneby35

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Re: Employer vs Employee - moving
« Reply #3 on: April 25, 2021, 05:19:33 PM »
Definitely have a good relationship with them and hopefully they're just ok with it, but just in case they're not, would be nice to collect some unemployment if at all possible. Also how would health insurance plans work? I would assume health insurance in one state would not be valid in another state and that makes it difficult for them to be ok with the move?

Blackeagle

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Re: Employer vs Employee - moving
« Reply #4 on: April 25, 2021, 05:24:09 PM »
Also how would health insurance plans work? I would assume health insurance in one state would not be valid in another state and that makes it difficult for them to be ok with the move?

Health insurance is a potential issue.  So is the employer not being set up to pay into the unemployment system or withhold taxes in the new state, comply with the new state’s labor laws, etc.  Obviously, if we’re talking about a large corporation that already employs folks around the country its less of an issue, but for a small company with existing employees concentrated in a single geographic area, these can be dealbreakers.
« Last Edit: April 25, 2021, 07:31:53 PM by Blackeagle »

use2betrix

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Re: Employer vs Employee - moving
« Reply #5 on: April 25, 2021, 06:09:32 PM »
I think the biggest focus here should be on outlining to them the benefits of keeping you on remote.

If you have a PPO plan, the insurance is likely a non-issue.

doneby35

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Re: Employer vs Employee - moving
« Reply #6 on: April 25, 2021, 06:23:09 PM »
I think the biggest focus here should be on outlining to them the benefits of keeping you on remote.

If you have a PPO plan, the insurance is likely a non-issue.

It is an HDHP plan, that's also PPO. Do you mind explaining how that's a non issue? If for example it's a BlueCross BlueShield of Michigan and I move to Texas, I don't suppose that will be valid there, or will it?


Rdy2Fire

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Re: Employer vs Employee - moving
« Reply #8 on: April 25, 2021, 06:53:04 PM »
The could probably also choose to fire you, which may make you ineligible for unemployment.

Typically if you were fired in this scenario you could collect because you weren't fired for cause. Cause can't be because you were going to move/leave so they fired you. If they wanted to pay you out the notice they could do so and just tell you not to come back then it would be a resignation.

Malcat

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Re: Employer vs Employee - moving
« Reply #9 on: April 25, 2021, 07:05:31 PM »
You could always just be upfront with them that you are moving and that you would love to stay on remote if they can make that work logistically.

Leave it in their court to either accomodate you or terminate you. If you expressly state that you would like to continue in your current remote state, then you really aren't giving notice.

hooplady

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Re: Employer vs Employee - moving
« Reply #10 on: April 25, 2021, 07:37:07 PM »
If were previously a full-time work-from-home employee then you moving to another state could potentially create a workplace in that state which could indeed be problematic for your employer if they don't have nexus there. They would have to agree that you doing work from another state is acceptable. But COVID has likely put all of those rules on hold temporarily so a firm answer is a bit difficult. You indicated that it's only because of COVID that you're working remotely, so it could possibly be OK for them to report your work location as the place you previously were physically. That would simply make you a resident of another state, and if they aren't currently set up to withhold taxes in the new state then the worst that can happen is that you have to make estimated state income tax payments and file on your own.

doneby35

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Re: Employer vs Employee - moving
« Reply #11 on: April 25, 2021, 07:52:01 PM »
These were all good suggestions along with the askamanager links. Thanks everyone. I think I'm going to follow what Malcat suggested and tell the employer that i'd love to stay on remotely if they can make it happen logistically and see what happens, putting the ball in their court. If they make it work, great, if not, then possibly i'll be eligible for unemployment, and if neither of those, then all the FU stash is there to comfort me.

Malcat

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Re: Employer vs Employee - moving
« Reply #12 on: April 26, 2021, 06:06:29 AM »
These were all good suggestions along with the askamanager links. Thanks everyone. I think I'm going to follow what Malcat suggested and tell the employer that i'd love to stay on remotely if they can make it happen logistically and see what happens, putting the ball in their court. If they make it work, great, if not, then possibly i'll be eligible for unemployment, and if neither of those, then all the FU stash is there to comfort me.

Good call. Whenever I can afford to be told "no", I always just come out and say exactly what I want. No fussing, no stressing about it, just up front with an ask to give my employer a chance to meet my ask, and a gracious acceptance if they won't/can't.

Asking for what you want even when you aren't likely to get it is a good skill to practice.

chasesfish

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Re: Employer vs Employee - moving
« Reply #13 on: April 26, 2021, 06:09:51 AM »
A few comments:

You probably have a nationwide network, but that's worth checking.  Most decent size employer plans with the "Big 4" have a nationwide network.

Moving outside of your work area would probably fall under a voluntary resignation.  My former employer would have considered it that, however employees are tough to find and on-boarding costs money, so my guess is the rumble at first then ultimately agree to it.   I don't see a route to unemployment insurance.



reeshau

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Re: Employer vs Employee - moving
« Reply #14 on: April 26, 2021, 01:38:26 PM »
I think you might have to add:

3)  Work from where you want, you are getting paid here.

Meaning, they will continue withholding, medical choices, etc. as if you were still in state.  It's up to you to work out the tax legalities and medical coverage.

Let me tell you why.

I am in TX.  Worked for a company in a Michigan office.  They do have locations in Texas, but not in Houston--down by the border. I went off on international assignment, but moved" to Texas to set up no state taxes and because we intended to be here when we returned.  There were 3 others in a similar situation.

Fast forward 3 years.  I am no longer an employee, but still have some benefits (relocation and tax prep for international  years)  The imputed income for those benefits goes through Michigan.  Even after I asked.  It doesn't matter to me in the end, because the benefits are grossed up.  But internally, those are different business units, so I am still "attached to Michigan, even though it would be less overall cost to the company to acknowledge physical reality.

Oh well, I am untangled as of next year.  But beware: there may be internal hurdles that make the tortured option the real one.  And in your case, OP, then it would put the ball back in your court to quit if you didn't like it.

doneby35

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Re: Employer vs Employee - moving
« Reply #15 on: April 26, 2021, 02:16:44 PM »
I think you might have to add:

3)  Work from where you want, you are getting paid here.

Meaning, they will continue withholding, medical choices, etc. as if you were still in state.  It's up to you to work out the tax legalities and medical coverage.

Let me tell you why.

I am in TX.  Worked for a company in a Michigan office.  They do have locations in Texas, but not in Houston--down by the border. I went off on international assignment, but moved" to Texas to set up no state taxes and because we intended to be here when we returned.  There were 3 others in a similar situation.

Fast forward 3 years.  I am no longer an employee, but still have some benefits (relocation and tax prep for international  years)  The imputed income for those benefits goes through Michigan.  Even after I asked.  It doesn't matter to me in the end, because the benefits are grossed up.  But internally, those are different business units, so I am still "attached to Michigan, even though it would be less overall cost to the company to acknowledge physical reality.

Oh well, I am untangled as of next year.  But beware: there may be internal hurdles that make the tortured option the real one.  And in your case, OP, then it would put the ball back in your court to quit if you didn't like it.

I didn't think about this one, but I'm not sure I understand. Does this mean that I would be paying taxes in both states? or do you mean that I would just continue having health insurance that might not be necessary valid in the new state?

reeshau

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Re: Employer vs Employee - moving
« Reply #16 on: April 26, 2021, 06:32:59 PM »
I think you might have to add:

3)  Work from where you want, you are getting paid here.

Meaning, they will continue withholding, medical choices, etc. as if you were still in state.  It's up to you to work out the tax legalities and medical coverage.

Let me tell you why.

I am in TX.  Worked for a company in a Michigan office.  They do have locations in Texas, but not in Houston--down by the border. I went off on international assignment, but moved" to Texas to set up no state taxes and because we intended to be here when we returned.  There were 3 others in a similar situation.

Fast forward 3 years.  I am no longer an employee, but still have some benefits (relocation and tax prep for international  years)  The imputed income for those benefits goes through Michigan.  Even after I asked.  It doesn't matter to me in the end, because the benefits are grossed up.  But internally, those are different business units, so I am still "attached to Michigan, even though it would be less overall cost to the company to acknowledge physical reality.

Oh well, I am untangled as of next year.  But beware: there may be internal hurdles that make the tortured option the real one.  And in your case, OP, then it would put the ball back in your court to quit if you didn't like it.

I didn't think about this one, but I'm not sure I understand. Does this mean that I would be paying taxes in both states? or do you mean that I would just continue having health insurance that might not be necessary valid in the new state?

Of course, if you moved to Texas, there would be no new income taxes.  :)  But yes, they withhold and file with their state, same as always, and it's up to you to figure out if the states have reciprocal agreements, (usually adjacent states) have a net tax calculation, (so, state of residency would allow a nonrefundable credit for state of employment tax bill) or may have no arrangement for netting, and worst case you would owe both.  Plenty of tax preparers deal with this for people who travel regularly for work, but it would be a cost and worry to you.

Another example, the other way, would be New York.  New York state law says that you owe them taxes for working a single day in the state.  Worse yet, if you work 2 weeks in the state, your employer need to withhold NY taxes.  Needless to say, all in my company were careful to keep 9 working days or under in NY.  This not only likely ups your taxes, but also meant you had to file in your home state as a part-time resident, to get the taxes pro-rated.  Pain in the butt.

use2betrix

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Re: Employer vs Employee - moving
« Reply #17 on: April 26, 2021, 06:49:32 PM »
I think the biggest focus here should be on outlining to them the benefits of keeping you on remote.

If you have a PPO plan, the insurance is likely a non-issue.

It is an HDHP plan, that's also PPO. Do you mind explaining how that's a non issue? If for example it's a BlueCross BlueShield of Michigan and I move to Texas, I don't suppose that will be valid there, or will it?

PPO Plans typically have a huge network, nationwide. If you had an HMO plan, they are typically a very small network in your area/state.

I’ve worked many many times for companies based in other states than I was actually working. I spent two years working in Alabama and Pennsylvania, while the company only had an office in Colorado.

Insurance was always a non-issue.

MayDay

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Re: Employer vs Employee - moving
« Reply #18 on: April 26, 2021, 07:52:20 PM »
My husband stayed with his old company and moved to a new state. His insurance got changed to a new plan based in the new state (his company had a presence in the new state with insurance set up).  No idea if they had to change it or just did because it was available.

If they hadn't had the local presence, there is no way they would have let him move because of the tax issues. But that may change with covid.

doneby35

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Re: Employer vs Employee - moving
« Reply #19 on: May 14, 2021, 08:47:12 AM »
I think you might have to add:

3)  Work from where you want, you are getting paid here.

Meaning, they will continue withholding, medical choices, etc. as if you were still in state.  It's up to you to work out the tax legalities and medical coverage.

Let me tell you why.

I am in TX.  Worked for a company in a Michigan office.  They do have locations in Texas, but not in Houston--down by the border. I went off on international assignment, but moved" to Texas to set up no state taxes and because we intended to be here when we returned.  There were 3 others in a similar situation.

Fast forward 3 years.  I am no longer an employee, but still have some benefits (relocation and tax prep for international  years)  The imputed income for those benefits goes through Michigan.  Even after I asked.  It doesn't matter to me in the end, because the benefits are grossed up.  But internally, those are different business units, so I am still "attached to Michigan, even though it would be less overall cost to the company to acknowledge physical reality.

Oh well, I am untangled as of next year.  But beware: there may be internal hurdles that make the tortured option the real one.  And in your case, OP, then it would put the ball back in your court to quit if you didn't like it.

I didn't think about this one, but I'm not sure I understand. Does this mean that I would be paying taxes in both states? or do you mean that I would just continue having health insurance that might not be necessary valid in the new state?

Of course, if you moved to Texas, there would be no new income taxes.  :)  But yes, they withhold and file with their state, same as always, and it's up to you to figure out if the states have reciprocal agreements, (usually adjacent states) have a net tax calculation, (so, state of residency would allow a nonrefundable credit for state of employment tax bill) or may have no arrangement for netting, and worst case you would owe both.  Plenty of tax preparers deal with this for people who travel regularly for work, but it would be a cost and worry to you.

Another example, the other way, would be New York.  New York state law says that you owe them taxes for working a single day in the state.  Worse yet, if you work 2 weeks in the state, your employer need to withhold NY taxes.  Needless to say, all in my company were careful to keep 9 working days or under in NY.  This not only likely ups your taxes, but also meant you had to file in your home state as a part-time resident, to get the taxes pro-rated.  Pain in the butt.

So following up on this, I have an answer from my employer and I think it matches reeshau's response above.
HR is saying it won't work, but my manager is completely fine with a workaround of me moving without telling HR nor anyone else, while keeping a local address in the current state that I'm in for HR purposes (i.e. parents address). There are no state reciprocal agreements though, since both states are not adjacent and both states do have income taxes, so I assume i'll be paying income taxes in both states then? and medical coverage probably won't work either. So I would have 2 issues: double taxation and no medical coverage.

Am I getting this correctly? does anyone see any other issues with this workaround?

lutorm

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Re: Employer vs Employee - moving
« Reply #20 on: May 14, 2021, 10:31:27 AM »
FWIW, "HR says this won't work" is exactly the response me and my manager got when I was moving and we both wanted me to keep the job. They didn't want to become an employer in that state just for me. One option we explored was me contracting for them instead. That would obviously not have benefits but might have other advantages in terms of freedom, etc. We argued about this for about a month until my manager and grandmanager apparently put enough pressure on HR that they just ended up doing the employer work and I'm still an employee 7 years later.

If this is a reasonably large company that has presence in several states already, just not yours, and your managers are motivated to keep you, see if they can put some pressure on HR about how bad it would be if you had to leave.

reeshau

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Re: Employer vs Employee - moving
« Reply #21 on: May 14, 2021, 10:41:08 AM »
Those are OK working assumptions, but of course you should follow through with actual research to confirm them.

1)  Find a tax preparer who has experience with multi-state situations, preferably with the two states in question, and ask them specifics; maybe even have them do a pro forma return based on your current earnings, so you can see the result.

2)  Check your employer's health insurance to see if there is an option with good out of state coverage.  (As mentioned before, PPO's are usually better for this.  BCBS can be, too.  At one time, DW had a health care situation that involved no less than 3 Blue Cross organizations from different states)  Also, check if you get a cash credit for opting out of their health insurance; you could use this for shopping on the ACA exchange.

3)  There are other impacts; for example, they won't be paying into the unemployment or worker's comp pools in your state of residence, so you would not be eligible for those.  It may also put you in an ambiguous state of state residency, if that matters.  (i.e. showing a paycheck when applying for a mortgage)

doneby35

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Re: Employer vs Employee - moving
« Reply #22 on: May 14, 2021, 10:43:07 AM »
FWIW, "HR says this won't work" is exactly the response me and my manager got when I was moving and we both wanted me to keep the job. They didn't want to become an employer in that state just for me. One option we explored was me contracting for them instead. That would obviously not have benefits but might have other advantages in terms of freedom, etc. We argued about this for about a month until my manager and grandmanager apparently put enough pressure on HR that they just ended up doing the employer work and I'm still an employee 7 years later.

If this is a reasonably large company that has presence in several states already, just not yours, and your managers are motivated to keep you, see if they can put some pressure on HR about how bad it would be if you had to leave.

My manager was actually the one proposing the move without telling HR and is not wanting to lose me, I suppose I could ask about contracting instead, but I'm not sure if the blanket statement of "we don't do business in that state so we can't make it work" applies to contractors the same as full time employees.

Proud Foot

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Re: Employer vs Employee - moving
« Reply #23 on: May 14, 2021, 01:35:21 PM »
FWIW, "HR says this won't work" is exactly the response me and my manager got when I was moving and we both wanted me to keep the job. They didn't want to become an employer in that state just for me. One option we explored was me contracting for them instead. That would obviously not have benefits but might have other advantages in terms of freedom, etc. We argued about this for about a month until my manager and grandmanager apparently put enough pressure on HR that they just ended up doing the employer work and I'm still an employee 7 years later.

If this is a reasonably large company that has presence in several states already, just not yours, and your managers are motivated to keep you, see if they can put some pressure on HR about how bad it would be if you had to leave.

My manager was actually the one proposing the move without telling HR and is not wanting to lose me, I suppose I could ask about contracting instead, but I'm not sure if the blanket statement of "we don't do business in that state so we can't make it work" applies to contractors the same as full time employees.

It seems to me this would be the route to go. If they will not keep you as an employee after the move then ask about working as a contractor. If your manager really wants to keep you then they would be for this and push to make it happen.

Dicey

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Re: Employer vs Employee - moving
« Reply #24 on: May 14, 2021, 01:45:29 PM »
FWIW, "HR says this won't work" is exactly the response me and my manager got when I was moving and we both wanted me to keep the job. They didn't want to become an employer in that state just for me. One option we explored was me contracting for them instead. That would obviously not have benefits but might have other advantages in terms of freedom, etc. We argued about this for about a month until my manager and grandmanager apparently put enough pressure on HR that they just ended up doing the employer work and I'm still an employee 7 years later.

If this is a reasonably large company that has presence in several states already, just not yours, and your managers are motivated to keep you, see if they can put some pressure on HR about how bad it would be if you had to leave.

My manager was actually the one proposing the move without telling HR and is not wanting to lose me, I suppose I could ask about contracting instead, but I'm not sure if the blanket statement of "we don't do business in that state so we can't make it work" applies to contractors the same as full time employees.

It seems to me this would be the route to go. If they will not keep you as an employee after the move then ask about working as a contractor. If your manager really wants to keep you then they would be for this and push to make it happen.
It seems very risky to me. I'd be sure to get something in writing. Manager gets replaced/promoted/gets another job and you're screwed.

Taranis

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Re: Employer vs Employee - moving
« Reply #25 on: May 14, 2021, 02:57:04 PM »
There are third party companies that specifically handle this situation for employers who are not currently (or want to) setup in a particular location. Generally it means you would be hired by the third party, and then you would work for your previous employer as a contractor (employment status may vary by location, that's just what I've seen personally). And no this isn't just a normal contracting company; they are specifically setup as this type of "pass through" entity to enable your specific situation. I did this for one employee who lived in Canada, and we wanted him to work for us in the U.S. So something to discuss with your manager if it comes to that, and if they really want to keep you they can go that route.

Regarding your answer about just keeping a local address; that sounds like a tax gray area. I'm not a tax expert, but I would be leery of both your local state and your resident state trying to tax you at that point. May not be an issue, but I've worked remotely long enough to have that raise a red flag at least (including moving states like you are planning).
« Last Edit: May 14, 2021, 02:58:37 PM by Taranis »

doneby35

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Re: Employer vs Employee - moving
« Reply #26 on: May 14, 2021, 05:00:50 PM »
Good conversation everyone and thank you for the suggestions. I'm just going to ask them if me being converted to a contractor is an option to get around HR's objections, if not, we'll just go our separate ways and start applying for other jobs.

lutorm

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Re: Employer vs Employee - moving
« Reply #27 on: May 17, 2021, 12:48:48 AM »
Good conversation everyone and thank you for the suggestions. I'm just going to ask them if me being converted to a contractor is an option to get around HR's objections, if not, we'll just go our separate ways and start applying for other jobs.
I should also mention that you can't just turn an employee into a contractor -- the IRS frowns upon companies that reclassify employees as contractors to get out of paying taxes for them. If you do decide to do the contractor route, be aware of the classification rules and make sure you're a bona fide contractor. This usually means that you'd do project-type work where it's up to you when and how to perform the work.

https://www.irs.gov/newsroom/understanding-employee-vs-contractor-designation

reeshau

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Re: Employer vs Employee - moving
« Reply #28 on: May 17, 2021, 08:06:59 AM »
Good conversation everyone and thank you for the suggestions. I'm just going to ask them if me being converted to a contractor is an option to get around HR's objections, if not, we'll just go our separate ways and start applying for other jobs.
I should also mention that you can't just turn an employee into a contractor -- the IRS frowns upon companies that reclassify employees as contractors to get out of paying taxes for them. If you do decide to do the contractor route, be aware of the classification rules and make sure you're a bona fide contractor. This usually means that you'd do project-type work where it's up to you when and how to perform the work.

https://www.irs.gov/newsroom/understanding-employee-vs-contractor-designation

Very true!  That also applies to things like attending employee meetings.  You do need to be careful to look at the structure of the job, if you go this route.

Villanelle

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Re: Employer vs Employee - moving
« Reply #29 on: May 19, 2021, 02:18:19 PM »
I can't see how you'd be eligible for unemployment.  You want to change the terms of your employment and if they say no, then what you choose to do with that is on you.  It's no different than me saying, "I'd like you to double my salary" and then quitting if they don't and claiming I'm owned UI money.  I wasn't let go; I left my job that still exists and that I'd still have if I hadn't decided I not longer wanted the job under those terms.  They were perfectly willing to keep you in the job you have, but you in effect want a different job.  That's not "unemployment" or getting let go; it's quitting. 

yachi

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Re: Employer vs Employee - moving
« Reply #30 on: May 27, 2021, 02:51:45 PM »
@doneby35 If this is a relocation to follow a spouse that was transferred to elsewhere for work, you might be able to college unemployment.  It looks like 23 states only recognize military transfers, but another 24 states recognize any kind of spousal job transfer as quitting with good cause for personal reasons.