Tag Archives: flexible work arrangements

So Your Employee Wants to Work Remotely Out of State

Contributed by John R. Hayes, March 8, 2021

Work Remotely memo stick. Laptop for remote job.

Given the “new normal” of remote work for many employees throughout the country, the question as to whether to allow an employee to work in another state – either permanently or temporarily – has become something employers are now scrambling to answer.  However, it is not as simple as determining whether the employee can do the work remotely, there are numerous considerations and implications employers should be aware of if they have employees working in a different state than the location of their main operations. 

First, employers should have clear guidelines and policies regarding what is expected of the employee in terms of hours, availability, and work product. That is true wherever they are remotely located. Some general areas to consider include:

  • Detailing their normal work duties and responsibilities;
  • Making clear the hours of work the employee is expected to put in along with strict adherence to any timekeeping policies;
  • Setting the hours of availability to communicate regarding company business and job duties;
  • Determining how to handle communication of work assignments and personal needs, including reporting absences of work due to injury, illness, or caring for a family member;
  • Discussing the use of company equipment and materials;
  • Ensuring the employee protects company information by following the company’s policies and practices regarding information security and data protection; ensure that unauthorized individuals do not access company data, either in print or electronically; and not accessing restricted-level information in print or electronically unless approved by the supervisor; and
  • Maintaining a safe environment in which to work.

Next, for employees wanting to work out of state either all the time or for a period of time, there are potential tax and payroll issues for both the employee and the employer. Unfortunately, there is no one size fits all answer. It will depend on the state the individual is performing work in, how long they are there, and a host of other factors.  When an employee is working outside of the state where the employer operates the employer may be responsible for the other state’s taxes, including income taxes. Each state’s income tax and withholding requirements vary significantly, and may be based on both personal residence and/or work location. Making it even more complicated, states have differing thresholds for when an individual working remotely in that state triggers tax implications, for example in Illinois it is 30 days and in New York it is 14 days.

COVID-19 related remote work has dramatically impacted this area of the law, as it has exponentially increased the numbers of employees working in a different state than where the employer is located or where they reside, and many states have been slow to adjust to this. However, several states have implemented “COVID-19 Rules” regarding the tax implications for remote workers. Again, this is a state-by-state analysis that needs to be done by the employer for each employee wishing to work remotely out of state. 

In addition to state and local taxes, the labor and employment laws of the state where a remote employee is working may apply to the employment relationship.  An employer needs to examine the state’s (and possibly the county’s and/or the city’s) employment laws to see whether there are specific laws that would affect the employee, such as posting requirements and paid family or sick leave, amongst others.

Employers should also be aware of state laws regarding workers’ compensation insurance and unemployment insurance. Employers usually must obtain workers’ compensation insurance in the state where the employee is actually working. It may be the case that the workers’ compensation laws in the employer’s state would not apply to the employee working remotely in another state. The same also applies to unemployment insurance, where the out of state employee would likely trigger the state’s requirements that the employer register for and pay the unemployment insurance premiums through that state’s particular unemployment insurance program.

Ultimately, the decision to allow remote location work is up to the employer and depends on the particular facts and circumstances of each employment situation.  Given the complexity of having to figure out other states’ employment, tax, and other state-specific laws, employers may be justified in saying no to such arrangements.  The answer really depends on the employer’s desire to hire/retain the individual, and whether remote work is a means to that end.  And once such a remote work arrangement is granted to one employee, employers must be mindful in granting/denying it to others, as allowing it for one employee but denying it to another could potentially be considered discriminatory, depending on the facts of each situation.

Any remote work arrangement should be carefully considered in advance, a written policy and understanding between the employer and employee should be put in place, and the particular laws of the remote work location should be examined and understood, ideally by experienced counsel.

Do You Have to Let Your Employees Work from Home?

Contributed by Rebecca Dobbs Bush, March 8, 2019

freelance, work at home. flat design vector illustration.

“Do I have to let my employees work from home?”  With technological advances and with market demand for flexible work arrangements constantly increasing, the question comes up all of the time. 

Generally speaking, the answer is no. Some positions just don’t translate to working remotely. For example, an auto mechanic or a doctor certainly cannot perform their job from their kitchen table. On the other hand, other positions, such as many white-collar office positions, can be well suited for remote work arrangements.  

The key in allowing remote work is to communicate expectations clearly. If you’re going to allow remote work, how often is it allowed? Once a week? And will you need to have a specific day of the week when everyone has to be present at the office and available for meetings, etc.? Are employees expected to have a dedicated office space when working from home? Will you set minimum requirements, such as a year of employment, before an employee can ask to work from home? Will you be able to continue to protect confidential company data and information? And of course, you need to be able to continue to monitor your employees and the quality of the work they perform. If an employee can’t meet expectations in the office, you certainly shouldn’t expect him or her to be able to do so while working remotely. It is also important to communicate the expectation that remote work arrangements are not synonymous with vacation days nor are they intended to be a substitute for childcare arrangements. To address all of these questions in a consistent manner, an employer may find it necessary to create a formal written policy. 

Finally, remember that even if you take a strict approach and clearly communicate parameters to your employees, the Americans with Disabilities Act may require you to make exceptions. In years past, it was fairly reasonable for an employer to argue that physical attendance was an essential function of the job. However, as courts evolve with technology and a changing workforce, it is becoming a much weaker argument to claim that 100% physical attendance is an essential function of a position. Today, an employer may be hard-pressed to explain why it could not allow remote work on at least a temporary or part-time basis. In fact, the request to work from home as a reasonable accommodation under the ADA has become so commonplace that the EEOC has developed a FAQ devoted to the specific request.

If you find yourself dealing with remote work requests on a fairly regular basis, it may be time to consider a policy to clearly and consistently communicate parameters. With industry experts predicting a tight labor market in 2019, and with a recent indeed.com survey showing that nearly half of employees say remote work policies are an important factor in choosing a job (and that 40% of employees are willing to take a pay cut in exchange for the option), a policy may not only help you set and manage parameters for handling such requests, but may also provide you with a competitive edge in recruiting top talent.