Between 2019 and 2021, the number of people primarily working from home tripled from 5.7% (roughly 9 million people) to 17.9% (27.6 million people). The rise of remote employees has led to many employees primarily working in states other than the state where the employer is located. Generally, employees working remotely are subject to the laws of the state where they work.
Employers utilizing out-of-state employees are thus liable for diverse state benefit programs or mandates, such as:
We could not write an exhaustive list otherwise this would become a novel, not a brief article. Here are a few examples of how these differences in the laws of where the employee works versus where the employer is located include:
Even when employers are making the appropriate deductions/withholdings from pay, they are often making such payments to the state where the employer is located, not the state where the employee is based. This would not only constitute a violation of the state law where the employee is located, but it could also deprive the employee of access to certain state benefits, such as disability/paid family leave insurance, unemployment compensation, etc.
If your business is employing remote workers based in other states, it is critical that you get legal counsel to ensure that you’re complying not only with the laws of the state where your business is located, but also the states where you’re remote employees are working.
Information contained in this post is for the general education and knowledge of our readers. It is not designed to be, and should not be used as, the sole source of information when analyzing and resolving a legal problem, and it should not be substituted for legal advice, which relies on a specific factual analysis. Moreover, the laws of each jurisdiction are different and are constantly changing. This information is not intended to create, and receipt of it does not constitute, an attorney-client relationship. If you have specific questions regarding a particular fact situation, we urge you to consult the with Michael H. Ansell, Esq., or other competent legal counsel.