In last week’s bLAWg post, I discussed the remote working trend and how some industries are adopting it permanently. Remote work is changing the way businesses operate. Obviously, one critical area is employer-employee interaction. Today’s post provides a listicle of some of the compliance and legal issues to consider when preparing a permanent work from home plan for your employees.
The Listicle
Consider the following items and questions if you are considering remote working for your business:
Foreign Business Registration
- If employees are working from another state, you may have to register your business as a “foreign” entity.
- Registration requirements are different for each state. If you have to register, then it is a likely bet you will have to consider taxes, and labor and employment laws of the new state.
- Some states and counties also restrict the type of businesses that can operate in residential areas, so if your employee is going to set-up shop at home, you may have to get a permit depending on what they are doing.
Taxes
- If an employee is working outside of the employer’s state of operation the employer may have to pay the taxes of that state, for instance payroll and withholding.
- Employees should review the way they receive benefits from their employer and where they must file income taxes with a tax adviser/preparer.
Labor and Employment
- Workers’ compensation and general liability insurance
- TDI
- Discrimination
- Disabilities accommodation
- Occupational health and safety
- Privacy and HR records access
- Meal and rest breaks
- Overtime/wage/compensation
- Expense reimbursements
- Benefits
- Restrictive covenants
Privacy & Security
- Review the current IT set up and policies to implement for remote working.
- Are you having employee’s set-up a home office? Are they using their personal devices or a company-issued one?
- How are they accessing/sharing files?
- How would your customers/clients feel if they know your workers are accessing sensitive information in a remote location?
- How are you monitoring communications? Are you having Zoom calls with your workers while family members are in the room?
Employment Agreements and Policies
- Employment agreements are covered by labor and employment laws; however, employers are legally allowed to contract away liabilities or make other arrangements.
- What happens to the written relationship when the worker moves to a more protective or less protective state?
- You may have signed in California, but can you enforce in Hawaii court? What provisions are you enforcing?
- Workplace policies created to be compliant for one state may not apply to remote workers scattered across the globe.
- Review, discuss, and revise/amend where necessary.
As Always Do Your Homework and Consult with Others
The above listicle is not meant to be exhaustive. As with everything with the law it will be a case-by-case basis. This is especially so with a highly valued or professional employee negotiating for this change. It is best that you conduct your research and plan accordingly. You will need to understand all the laws in your home state and the state that the employee will be remotely working in. Especially, when it comes to HR and employment, the labor laws can differ vastly from state-to-state in their worker protections, insurance requirements, etc. Last week’s bLAWg post listed some advisers you should consult with when making this decision.
Thoughts and Questions
Is your business currently thinking of transitioning to permanent remote work? Do you think it is worth it for all the planning needed? Do you have questions about compliance/legal issues? If so, then contact us at [email protected]. Check back next week and I’ll discuss some of the questions I’ve gotten about remote working.
