Remote Work Compliance: How to Manage Employees Working from Home

Key points about remote work compliance:

  • If you have a remote workforce, you may need to consider new aspects of compliance.
  • Legislation varies, but general guidance regarding hours, wages, and equipment can help you stay compliant.
  • Check out our Work from Home Policy for a sample policy you can use for your business.

According to Gallup, the number of days employees work remotely has doubled during the pandemic. Some companies have even created permanent remote work arrangements. 

There are no laws that apply exclusively to remote workplaces. However, working from home comes with remote work compliance considerations. If you have remote workers, keep the general guidance below in mind:

To Successfully Navigate Remote Work Compliance:

Record hours accurately

For remote employees, the boundaries between work and home life can blur together. Your employees may be accumulating “off the clock” work, and even overtime, that they aren’t being paid for. This may seem harmless enough in the moment, but unpaid wages can come back to bite you. To prevent any future issues, make sure your employees are logging all of their time worked correctly.

Provide the correct minimum wage

Minimum wage rates can get tricky, especially if you have remote employees working in different states. Pay employees at least the minimum wage of the state where they physically work. It doesn’t matter whether they’re at one of your satellite offices or in their own home. Keep in mind that some cities and counties require you to provide a minimum wage higher than the state minimum wage. As with most employment laws, follow the rule that’s most beneficial to the employee. Check out our Guide for more information about multistate compliance.

Check tax requirements

Similarly, check tax requirements to ensure you stay compliant in each location. Your tax requirements will likely stay the same if your employees are remote but still work within your home state. Just be sure to double check local tax regulations. These may differ depending on the city or county in which a remote employee works.

Your tax requirements will probably be more complex if your employees are remote and work outside your home state. Each state sets its own tax rates and requirements. To stay compliant, check the tax requirements in each state where your employees work. You’ll also need to register with the appropriate tax agencies and obtain the necessary permits in each state. 

To use income tax withholding as an example, let’s say your business is based in Pennsylvania, but you have a remote employee working in New York. You would withhold New York taxes, even though your business is registered in Pennsylvania.

Some tax considerations to keep in mind include:

  • Income tax withholding
  • Unemployment tax
  • Workers’ compensation
  • Disability insurance
  • Paid Family & Medical Leave (some states treat this as a tax)

Be sure to ask your payroll and tax filing provider for additional assistance. Our Guide to Hiring an Out-of-State Employee can also help you navigate multistate tax requirements.

Set performance expectations

For many employees, remote work means adjusting to an entirely new work environment. While it’s important to accommodate this adjustment period, it’s also important to set clear performance expectations for your employees. 

Clarify priorities, performance goals, and availability. Explain any changes to your current performance review process, along with policies and procedures for addressing performance issues. Establishing these expectations will reduce misunderstandings, establish consistency and fairness, and help your employees maintain a healthy work-life balance in the process. 

Ensure employees take breaks

Remote employees must take all breaks and rest periods required by law, as if they were in the workplace.

Prevent harassment

Different states define harassment differently. Others set requirements for harassment training that may be different from your home state. Be sure to check state and local laws everywhere your employees work to stay compliant.

Remote work can also produce unique forms of harassment that differ from in-office harassment. Examples include things like:

  • Employees wearing inappropriate clothing 
  • Roommates in the background who are unaware that they’re on camera
  • Objects in the background that other employees might consider offensive

To prevent these kinds of incidents, clearly document your expectations for remote meetings. Communicate those expectations with your employees and hold everyone accountable. It may be helpful to remind employees that their background will be visible to coworkers during video calls. 

On the other hand, placing too many restrictions on employees’ private homes can cause anxiety and morale issues. Make sure your remote work policy is logical and business-related. It doesn’t need to be overbearing to help prevent harassment and ensure remote work compliance.

Share workplace posters

To stay compliant with workplace poster laws when remote, you’ll need to make some adjustments. Depending on the posting law, you have a few options.

You can mail hard copies of required workplace posters to remote employees and let them do what they like with the posters at their home offices. This is often the safest option to ensure you stay compliant with all posting requirements. If you have employees in multiple states, send each employee the required Federal posters, plus any applicable to the state in which they work.

Alternatively, you can provide the required notices and posters on a company website, intranet, or employee-accessible HRIS. Your remote workers will be able to view them there. Newer posting laws often explicitly allow you to share posters electronically. However, keep in mind that this option may not be compliant with every posting law.

Consider FMLA eligibility

Qualifying remote workers may be eligible for leave under the Family and Medical Leave Act (FMLA) if they report to or receive work assignments from a location that has 50 or more employees within a 75-mile radius. 

According to FMLA regulations, the worksite for remote employees is the site:

  • To which they are assigned as their home base,
  • From which their work is assigned, or 
  • To which they report

For example, a remote employee works in Frisco, TX and reports to their company’s headquarters in Portland, OR. That site in Portland has 65 employees working within a 75-mile radius. As a result, the employee in Frisco may be eligible for FMLA. However, if the site in Portland only had 42 employees, then the remote employee would not be eligible for FMLA. The distance from the remote employee to the company’s headquarters is not a factor in determining eligibility.

Verify Form I-9 online

In normal circumstances, you, or an authorized representative, must physically examine an employee’s acceptable documents in order to complete Section 2 of the Form I-9. The employee must also be physically present during your review.

However, the Department of Homeland Security temporarily suspended the physical presence requirement for employers and workplaces that are operating remotely due to COVID-19-related precautions. In other words, if you’re operating remotely due to COVID-19, you are not required to review an employee’s identity and employment authorization documents in the employee’s physical presence. Instead, you can inspect them remotely. This temporary rule is still in effect.

Provide proper equipment

In some states, you’re required to either:

  • Provide employees with the tools and items necessary to complete their job, or 
  • Reimburse employees for those necessary expenses

Check state and local legislation everywhere your employees work to ensure you stay compliant. Desks and chairs are usually not included in this category of necessary items.

A remote employee might request a device or furnishing as a reasonable accommodation under the Americans with Disabilities Act (ADA) to perform the essential functions of their job. In such cases, consider their request like any other ADA request. For example, an employee may want to take home their ergonomic office chair. This is probably not an undue hardship, so you should grant their request.

Decide who can work from home

Not every role is suitable for a work from home arrangement. You can offer different terms of employment to different employees so long as your decision is based on non-discriminatory criteria. For instance, you might allow an employee to work remotely depending on their role, performance, or tenure. You might also consider an employee’s location or classification (exempt or non-exempt). In all cases, you should have a solid business-related justification for your decision.

How SentricHR Can Help

Whether or not you plan to stay remote, understanding various legislation related to the remote workforce can help you stay compliant. With an all-in-one HRIS like SentricHR, you can easily track employee hours, share digital workplace posters, and more.

A Work from Home Policy can also help you navigate remote work compliance. Our free sample policy can help you manage remote employees more effectively and reduce risks and liabilities. 

Blog content provided in part by Sentric’s online HR Support Center. For more information, please reach out to our sales team.


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