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What’s Involved in Allowing Your Employees to Work from Home Forever?

By July 10, 2020December 16th, 2022Legal

When Facebook, Twitter and others made the announcement that they were going to allow their employees to work from home forever, there was much interest from workers and employers across the country as to whether or not they could practically adopt the same approach. With the extension of Stay-at-Home orders inching through the summer, some employees are already making the hop to more comfortable digs in adjoining cities and towns. But before you allow your workers to move to the next county, adjacent state or half-way across the country, prudent employers need to take into consideration the costs associated with their newly remote employees:

  • If you do not already have employees working in the destination state, you will first need to register your business to operate in that state. Registration is typically completed through the Secretary of State’s office.
  • With a fresh business registration in hand, you should also receive a withholding number from the department of revenue because you will now be required to withhold state income taxes for that state. In some instances, if your employee moves to a less tax-friendly state, you may be required to withhold for local (city) income taxes as well. You will be required to register and pay for unemployment taxes in this locale as well.
  • You will need to notify your commercial insurance agent because where the work is performed impacts both your workers’ compensation insurance and your general liability. As minimum policy requirements vary from state to state, you may encounter an unexpected increase in your rates.
  • Finally, you may need to familiarize yourself with the labor laws in the state where you are now operating as business practices common in one state may not be generally accepted in another. For instance, California employers adhere to an 8-hour workday which means O/T pay is required when an hourly employee puts in a 10-hour day. Before you acquiesce to the request of staff to relocate to the left coast, visit https://edd.ca.gov/Payroll_Taxes/ and https://www.dir.ca.gov/dlse/ to learn more about the implications for your business.

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