While the Covid-19 pandemic has impacted the American workforce in a variety of ways, none is more substantial than the shift to remote working. Pre-pandemic, remote work was rare; today, 80% of employees expect to work remotely at least three days a week.1 Research suggests remote workers are happier and more productive,1 and in a tight labor force, the option to work remotely can help retain top talent and widen the selection of available candidates. However, working outside the office can create new complications. Employers Council can help troubleshoot the legal ramifications of work-from-home employees. Here are a few areas organizations should pay attention to:
Work-from-home employee tax implications
Often, in an effort to be flexible, organizations will take a hands-off approach to remote workers. As a result, some employers might not require employees to update HR with their current address or even track where an employee is physically located when performing work. This was especially true during the early days of the pandemic, when many employees left their primary residences to live with family or go in search of more affordable or larger housing. Sometimes employees wouldn’t tell their employer they were working from a different state or even a different country!
Although employees appreciated the flexibility, undisclosed locations can be problematic because taxes are generally due where the work is performed. For example, if the organization’s office is in one state, but the employee works remotely in another state, the withholding and unemployment taxes should be paid where the employee is physically performing the work. Each state has different rules and requirements, so it’s important to know where your employees are physically located, how long they will be there, and if your organization is prepared to register in that state.
Need help setting up remote workers in new states? Learn how with Employers Council’s remote working white papers.
Employment laws for remote workers
Similarly, the state employment laws wherever a remote worker is located apply, no matter where their employer is based. This can get complicated, as laws can vary substantially, even for states located right next to each other. Relevant statutes include anti-discrimination laws, minimum wages, time-off rules, non-compete agreements and more.
For example, if an organization’s primary office is in Wyoming, which has few state employment laws, but the remote worker performs their work from Colorado, the many employment laws of Colorado probably apply. An organization needs to be aware of local employment laws and have a philosophy of how to apply laws equitably to employees in different locations. For example, some states like Colorado and New Mexico have mandated sick time, though the amount of sick time differs. Employers should decide how to navigate these differences and how policies for employees in different states will be communicated.
Some federal laws also require posters in workplaces, and the rules around those posters can be dependent on what type of workforce an organization uses (fully remote, hybrid, or in-person).
With remote workers in different states, it can be difficult to keep up with quickly changing employment laws. Get your questions answered by Employers Council attorneys, who track employment laws and regulations daily.
Remote work policies
Organizations with employees who work from home should have remote work policies in place to proactively manage some of the downsides of teleworking. For example, a policy can require employees request permission to work away from their home state, lay guidelines about having childcare during working hours, and outline the proper storage of employer property and confidential documents.
Additionally, remote work policies should address timekeeping and regular work hours. For nonexempt remote employees, employers will need to reinforce that all time worked must be logged to avoid any potential wage claims for unpaid time. These policies can also help with workers compensation claims, as determining whether or not a remote worker was injured “on the job” can be difficult.
Need assistance crafting solid remote work policies? Employers Council has templates available for members, either through our member portal or by contacting us directly.
Recruiting work-from-home employees
Allowing remote work can expand talent pools, which can be enticing to employers recruiting hard-to-fill positions. However, HR professionals should understand that some states may have specific guidelines about job postings. For example, Colorado requires certain information be included in all job postings, like the range of pay. Failure to abide by state laws when recruiting can result in fines for organizations, even if they are not physically present in the state.
Once hired, HR should work closely with supervisors to ensure remote onboarding is effective and employees are connecting with the organization, which can be more difficult in a remote environment. Supervisors may need additional training in best practices when supervising remote employees, as the traditional methods of supervision—in-person meetings—may no longer be applicable.
Remote working is here to stay, and Employers Council can assist with many of your legal and HR questions as we build exceptional remote and hybrid workplaces for the future. Contact us to discuss membership!
- “Statistics on Remote Workers That Will Surprise You (2022),” ApolloTechnical. 11 May 2022.