Employers are complying with employment laws of their home states, but they may not realize their obligation to comply with the sometimes very different laws of the states in which their remote employees work, says Isaac Mamaysky, employment attorney with Potomac Law Group PLLC. He explores implications of different state labor laws as workers transition between working from home and being in the office.

I was recently reminiscing with colleagues about the days of hopping on a plane or driving for hours to join a brief meeting a few states away. With Covid-19's two-year mark just behind us, this exercise is often replaced by a simple Zoom call as many employers have experienced a fundamental shift from the traditional office to the "hybrid workplace," in which more employees work from home more of the time.

Experts can debate whether the remote office is a permanent fixture of the modern workplace or a temporary measure in response to the pandemic, but it's clear that many employees will continue working from home for the foreseeable future. Various technologies have made the transition to remote work seamless in many industries, but things are not quite as simple from an employment law standpoint.

To understand why, let's imagine a financial services firm with locations in Manhattan and Washington, D.C. Before the pandemic, all staff worked from one of those two locations every day, but now certain employees who were based in New York work from home in Connecticut, New Jersey, and Pennsylvania. Likewise, certain employees who were based in D.C. now work remotely in Virginia, Maryland, and Florida.

Complicating matters further, some of these employees split their workweek between home and the corporate office, such that they regularly work in more than one state.

The issue with this very common scenario is that remote employees, including those who only work from home a few days each week, trigger compliance obligations in the states from which they work, regardless of the state(s) in which their employer is based.

What does this mean for our hypothetical firm? While it was once subject to the employment laws of two states, it is now subject to the laws of six states.

Employment Laws Differ Across State Lines

Employers may be dutifully complying with the employment laws of their home states, but they may not realize their obligation to comply with the very different employment laws of the states in which their remote employees work. Let's consider just a few examples of how employment laws differ across state lines.

Training and Policies to Prevent Sexual Harassment

Some states mandate that employers provide training to prevent sexual harassment in the workplace. Other states are silent on the topic or recommend training as a best practice rather than a legal mandate.

If an employer has employees in New York, then the employer must implement sexual harassment prevention training and put in place a written policy based on New York's requirements. Those requirements may be altogether nonexistent in the employer's home state.

Entitlements to Family and Medical Leave

Employees across state lines may have very different family and medical leave entitlements than their neighbors. Federal law mandates that certain employers provide unpaid leave for up to 12 weeks for various family and medical reasons. While some states are silent on the topic, others have more significant leave requirements.

Employees in California, for example, could be entitled to paid leave for their own illnesses or to care for an ill relative. By contrast, their neighbors in Utah have no similar entitlement. If an employer has a leave policy that complies with federal law, it could be perfectly acceptable in Utah but wholly insufficient and out of compliance with state law in California.

Requirements for Worker's Compensation Coverage

Let's consider another hypothetical financial services firm, this time based in Colorado but with some employees working from home in Arizona and others working from home in New Mexico.

If an employee who lives and often works from home in Arizona is injured during a business meeting with a colleague who lives and works in New Mexico, then the injured employee can likely file a worker's compensation claim in Arizona, Colorado, or New Mexico. If the employer's insurance policy doesn't include all three, then the employer may have a coverage gap and resulting compliance challenge.

How Can Employers Address Compliance Issues?

Of course, these are just a few examples and the list of differences among state employment laws can go on and on. What should employers do to address this multistate compliance challenge?

As a first step, they should survey and document the work location of each remote employee and hybrid employee. In many cases, the transition to remote work has been so seamless that employers don't even know where their employees are located, but without that information, any effort at multistate compliance is meaningless.

Once employers have taken stock of their employees' locations, a common approach is to ensure that each individual employment policy complies with the most stringent requirement of each applicable state. This approach is appealing for its simplicity, but some employers prefer not to provide rights and entitlements to employees who wouldn't otherwise receive them (despite the positive HR implications of doing so).

Thus, another approach is to make policies that vary by location, such that the employer has one set of policies for employees in state A, another set of policies for employees in state B, and so on. While this is also a common approach, it creates the logistical challenge of having different employees subject to different policies, which can be especially tricky for hybrid employees who split their time working from home and from the office.

There is no "right" answer to these questions, but it's critical for multistate employers to choose an answer. If they don't, then the outcome of remote and hybrid work may be employers finding themselves in the crosshairs of private or regulatory actions.

Originally Published by Bloomberg Law, 29 March 2022

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.