COVID-19 has forced dramatic changes to the way America works.
As businesses grapple with the decision to continue with a remote workforce or bring employees back to the office, employers should be aware of the impact a remote workforce has on company payroll and benefits. Regardless of where your company is located, the employment laws of the state where your employees work apply. Thus, employers need to determine which state and local employment laws pertain to their remote employees, in addition to applicable federal laws.
In this article, we will explore some of the top issues facing employers with a remote workforce.
Wage and Hour Issues
Employers with remote workers in multiple states need to ensure they are paying employees in accordance with both federal and applicable state laws. Often, it will depend on how the law defines covered employers and employees.
- If the company is in one state but the remote workers are in another, different minimum wage rates may apply. In many cases, it’s determined by the jurisdiction in which employees perform the work. If more than one law covers a worker, generally the law more generous to the employee would apply. For example, if an employee is covered by both a state and local minimum wage, the higher minimum wage would apply.
- State laws may vary when it comes to overtime pay obligations and they exceed federal requirements. In Maryland, employers are required to pay overtime to employees who work more than 40 hours in a week. By contrast, California employers are required to pay overtime to employees who work more than eight hours in a single day and for the first eight hours worked on the seventh consecutive day of work in a workweek. California further requires double-time payments to employees who work over 12 hours in any workday or more than eight hours on the seventh consecutive day of work in a workweek. It is important to pay employees the correct amount of overtime to avoid costly wage and hour claims.
- Employers should keep accurate records for remote workers and prevent them from working unauthorized overtime. Review and update your policies to ensure that employees record all hours worked and obtain permission from their supervisor before working overtime. While employers may discipline employees for violating such a policy, they may never withhold overtime pay.
- Payroll requirements vary by state. Companies will need to stay abreast of applicable state and local filing deadlines, tax rates, and tax changes, in addition to federal laws. State and local laws may also vary when it comes to the information that must appear on paystubs; payday frequency requirements; whether unused, accrued vacation must be paid out upon termination of employment; and pay rules as they relate to the timing of payment of final wages upon separation of employment.
Many federal, state, and local employment laws require employers to display posters in the workplace outlining employee rights. Depending on the applicable state posting requirement, it may be appropriate to provide postings electronically or to mail hard copies that staff members can post at their remote worksites. In Maryland, employers must provide notice of the Maryland sick and safe leave. If a company has employees regularly working in Montgomery County, employers must also provide these workers with the Montgomery County sick and safe leave notice.
- Whether an employer is subject to a particular state or local law often depends on how many employees it has within the state or locality, or the amount of time the employee spends working in the state or locality. The D.C. Accrued Sick and Safe Leave Act (ASSLA) covers any employee who spends more than 50% of their time working in D.C. If an employee spends less than 50% of their time in D.C., but doesn’t work in any other state for more than 50% of their time and Washington D.C. is their primary place of employment, then they are also covered by the law. In Maryland, the Sick and Safe Leave law applies to employers whose primary work location is in Maryland even if the employer is located out-of-state. Employees who regularly work 12 hours or more and whose primary work location is in Maryland are entitled to accrue sick and safe leave. If a Maryland company has an employee who lives and works exclusively in another state, the employer could, but would not be required to, provide sick and safe leave to that employee. In calculating the number of employees for the 15-employee threshold, only those staff members who work in Maryland should be considered.
- Employers must be careful to ensure that eligible remote employees be permitted to take any required leave under the federal Family and Medical Leave Act (FMLA) and applicable state law. Some employers incorrectly believe that remote employees are not eligible for FMLA leave when they work from home or a site that is not within a 75-mile radius of 49 other company employees. However, according to the FMLA regulations, an employee’s personal residence is not a “worksite”. Rather, an employee’s worksite “is the office to which the employee reports and from which assignments are made”. For employees with no fixed worksite, the worksite is the location to which they report and from which they receive their work assignments.
- Certain state-mandated training applies to employers who have employees working in that state. For example, New York state recently enacted a broad anti-sexual harassment law which applies to all employers of employees in the state. Among the requirements are mandatory employee training and notice to all employees of the company policy against harassment. The policy must also include certain elements required by the law, such as information regarding where an employee may file a complaint or a charge of discrimination, as well as a complaint form.
These are but a few examples of the many ways in which having employees across multiple jurisdictions can present challenges for employers.
Tax considerations can also loom large in the remote work environment. Organizations must remain aware of the impact of various employment laws on their remote workforce. Businesses should check with their payroll providers, legal counsel, and tax advisors to ensure compliance.
The HR Team has decades of experience helping employers to comply with confusing and ever-changing laws and regulations, and we can also assist your organization and connect you with the right experts when needed. Please contact our knowledgeable professionals to learn more.
About The HR Team: Founded in 1996, The HR Team is a Maryland-based human resources outsourcing firm committed to developing strategic, customized solutions that respond to the unique needs and cultures of organizations of all types and sizes. Available as a one-source alternative to an in-house HR department or on an à la carte project basis, the company’s flexible service models address the full spectrum of HR needs that many organizations struggle to address. The HR Team helps clients achieve their highest level of success by providing value-driven human resources services that leave them time to focus on what they do best: directing business growth and profitability. Headquartered in Columbia, Maryland, the firm serves all of Maryland, Washington, DC, and Virginia. To learn more about The HR Team, call 410.381.9700 or visit https://www.thehrteam.com/.