This article was submitted by our friends at Wagner, Falconer and Judd & The Compliance Center
The COVID-19 pandemic spurred an unprecedented work-from-home environment that has yet to return to the familiar pre-pandemic workplace environment. Employees continue to insist on remote work arrangements that are far more flexible than conventional workplace arrangements allow.
This shift has changed the workplace landscape in numerous ways. One difference is that employees now work from states in which companies hadn’t previously operated. This raises concerns about rules and regulations surrounding remote work and how it impacts HR policies.
If circumstances surrounding remote workers aren’t properly managed, significant burdens for HR departments and administrators could be created. When remote work crosses state lines, it can be trouble for employers, starting with tax implications, wage and hour law violations, and more.
How Is Remote Work Impacting HR Policies?
HR policies at many companies that have remained unchanged for decades are suddenly being challenged, disrupted, and altered at a record pace. Companies must be aware of numerous laws that guide every state in which they have employees working from home, including:
- Paid sick leave laws
- Wage and hour laws
- Medical leave laws
- Rest break and meal laws
- Overtime pay laws
Remote work significantly impacts HR in many ways. Companies are responsible for knowing when to register their business with the local unemployment division, when to withhold the new state’s payroll taxes, and when to register for the state’s workers’ compensation program.
What Impact Has Remote Work Had on Payroll?
One of the biggest questions employers have about how remote work impacts payroll has to do with what kinds of fines companies can face if their employees are remotely working from a state that they failed to disclose to the employer.
The short answer is that the employer can still be held liable for expensive wage and hour claims for failing to pay proper wages. This is especially the case with overtime work.
For example, employees are paid overtime wages in California if they work more than eight hours a day. They also get paid double time if they work more than 12 hours in a day.
If an employer isn’t aware that the employee is working remotely from California, they will likely miss paying overtime that is lawfully due to the employee. This is where the expensive claims can come in for failure to pay wages properly.
How Can Companies Ensure They Have Accurate Employee Data When Workers Are Remote?
There are several ways employers can ensure their records are kept up to date. One of the best ways is to adopt and enforce a policy that requires employees to notify the HR department of any changes that take place concerning the employee’s work location.
In addition, employers must always monitor the paperwork that comes in completed by employees and look for insight into where the employee is located. This paperwork can include tax withholding documents, business expense reimbursement forms, and direct deposit forms.
Will the U.S. Mimic European Legislation Regarding Remote Workers on a Federal or State Level?
It’s unlikely that the U.S. will mimic the legislation some European countries enact regarding remote workers. Some EU countries have adopted laws carving out the right for employees to request the ability to work from home. However, it’s unlikely that similar legislation will follow in the U.S.
Even though many state legislatures have enacted employee-friendly policies on a litany of topics, there just isn’t an appetite at the federal level for laws that dictate when employers are required to allow remote work. Those decisions are typically left to individual company preferences.
It’s possible that some states, like California and New York, could enact this type of legislation despite the federal government not doing so. However, because many industries are incompatible with remote work, this kind of legislation is difficult. Three years into the pandemic, no legislation has been forthcoming thus far.
Remote Work Regulations and Other Laws
Employers must remember that the Americans with Disabilities Act and other laws consider remote work a reasonable accommodation in some situations, even though states don’t require that employers allow employees to work remotely.
Therefore, before categorically denying an employee’s remote work request, employers should consider that other laws may be at play.
If you’re working to stay compliant with remote work regulations, our team at The Compliance Center could be an excellent resource for you. Please connect with Chris Kelly to learn more.