Are you a newly multi-state employer or considering branching out into new locations for the first time? Join us as we examine key compliance issues for employers with a distributed workforce.
We’ll cover the basics as well as some not-so-basics of having employees in multiple states or splitting time between two or more locations. In particular, we’ll talk about employees handbooks and the different ways you can approach policies when state requirements differ. We’ll also review compliance best practices and equity issues on a high level.
Our Webinar on Multi-State Employers
This recording was presented live on February 15, 2024.
Slide Deck
Session Transcript:
Kara Govro (00:00):
So while we’re waiting for people to roll in, I’ll just introduce myself. My name’s Kara Govro. I’m the principal legal analyst here at Mineral. I have been here for nine years and practiced employment law. Prior to that, in my own firm, I spend most of my time looking at state laws, sometimes federal laws, sometimes local laws, but the majority of them are state laws because that’s where they come from. Figuring out what employers like yourselves need to know about them and what actions you need to take when laws are past created or updated. So if you’ve been to our webinars before, you’ve probably virtually met me and it’s nice to see you again. So we’ll go ahead and get started with a little bit of housekeeping. We’re going to send you an email to a link of this recording as well as a PDF of the slides within about 24 hours.
(00:54):
So if there was something interesting on here that you wanted to revisit, don’t worry, you’ll get the full package probably sometime tomorrow, if not today, but do give us 24 hours before you call looking for it. We will get it out to you. We’ve got one poll, we’d love your participation. I’ve got the Q&A box open for questions on my end, so if you want to ask me questions as we go along or at the end, feel free to put those in there. And finally, this does count for HRCI or SHRM credit, but we don’t have that pre-approved code, so it’s definitely long enough and specific enough to count for a credit, but you would have to submit it on your own, we don’t have a code for you. So all that said, let’s go ahead and take a look at our agenda.
(01:52):
We’re going to start with talking about registration, taxes and insurance, the money stuff that you need to know about if you’re expanding into new states, then we will talk about some specific employment laws. There are of course, many, many employment laws that vary between states, but I’m going to call out a couple of the biggies that you should be thinking about. Then we’ll discuss policy approaches. Even if you don’t have a handbook, exactly, if you’ve got policies that you hand out on the side, that’s something you should be thinking about. Chances are you do have a handbook though, and you might want to think about different approaches to dealing with your handbook if you have people in multiple states. And then finally we’ll cover a few best practices. So that is the plan today. Let’s get started with registration, taxes and insurance. Oh my, again, really the money stuff.
(02:48):
So if you move into a new state, you need to be thinking about registration and corporate and business activity taxes there. So even a single employee in a new state will almost certainly require that you register there with the Secretary of State, register the business that you provide a registered agent, an address that you get the necessary licensing and business permitting in that state and that you pay corporate and business activity taxes in that state because you are doing business in that state by having someone there. So this may or may not be very difficult. It probably depends on the state and the type of corporation you are. I know that when I registered my law firm, what feels like a million years ago now, it was fairly easy. I gave them my name, I gave them my office address and I gave them $50 and that was good enough for the state of Oregon. But of course it could be much more complicated in California or Washington DC, and it could also be more complicated depending on the type of business you have. So you want to know what you’re getting into there.
(04:05):
There will also of course be income tax withholding for your worker or workers in that location. It’s usually based on where the work is done. Occasionally it’s based on where an employee lives and some states have reciprocal tax agreements. So if you’re hiring one employee just across the state line in another state, it’s possible that your states have some kind of reciprocal tax agreement that you’d want to check out. But in most cases it will be based on the employee’s work location. So if they work just across that state line, now you need to figure out a whole new income tax scheme. Granted, your payroll provider can presumably help you with that. It might not be that hard, but it is something you need to keep in mind. Also, I feel like a lot of us learned about this during COVID.
(04:56):
There are temporary presence rules that dictate how long an employee can be somewhere before taxes are owed. A lot of employers will or did make rules that were like, you can travel but only for 29 days or 27 days or whatever they thought was appropriate to stay under the limit for them to have to start paying taxes in a new location because you traveled there for too long. Someone asked all of our employees or remote workers, do we need to register in each state that an employee lives in? No, it’s not about where they live, it’s about where they do the work. However, if you have employees all over the place doing work all over the place, you should be looking into whether you need to register in those states, you probably do. In fact, I think you almost certainly do. So yeah, that is something you’d want to be looking into. If you’re hiring remotely, you almost certainly need to register as a business in that state and then do all the other stuff on these slides that we’re talking about.
(06:05):
All right, someone else actually wrote in on a similar topic that I have found that different law firms provide different advice as to when to register in a state versus not. Some go the root of a single worker and some only if you have a more serious nexus like an office in the state. Have the laws been updated now to make a single worker more of the norm? I don’t know. I don’t know if the states have been updating their laws on that, it falls a little bit outside of our realm since it’s specifically about taxes. So that’s not something we track closely, but what I would suggest is you want to check, so have your tax person or your attorney, whoever that is in your organization, make sure that you don’t need to be doing something with the state because you have one person there. It’s possible you don’t. Like you said, you’ve heard attorneys give different advice.
(06:53):
I’m not here to give you guys legal advice, I’m just pointing out the things you need to be thinking about that could be potentially problematic or potentially compliance issues for you. So absolutely go and check with an attorney before registering in a state if you don’t want to register in that state and if it’s not clear on the state’s website whether you need to or not, but it is something to have in the back of your mind as a potential requirement. Someone just chatted in asking about SUI rates, which is related to unemployment insurance. So unemployment insurance is another thing we need to be thinking about. Where unemployment insurance needs to be paid to will depend on a number of things. When we send you this deck, that link right here, this localization of work provisions, I don’t know if you can see my mouse moving over that, that link should work when we send you the deck and it’ll send you to a very standard four factor test that is used to determine where unemployment insurance should be paid to.
(08:02):
Generally it’s going to be based on where the services are performed. If the services are performed a little bit everywhere, then we look at the base of operations. If there is no real base of operations, then we look at where the direction or control over that employee is coming from and if that is diverse and all over the place and we can’t pin it down, we might finally look at the residents of the employee and see where they live. But chances are you’re going to hit on something in those first three bullets where the services are performed and that will almost certainly be where you need to be paying the unemployment insurance.
(08:45):
All right, someone else chatted in… You guys are smart. Most states require that you set up in a state for a single employee at least for income tax. Yes, of course income tax, no question you’re going to have to pay income tax or that employee is going to have to pay income tax in that state, but not as a requirement for. But not all of them require that for unemployment. So again, the things you want to look into, it’s complicated basically, right? You can’t necessarily just drop an employee in a brand new state and be like, I don’t have to do anything about that. This is cool. I’m hiring remotely. There’s a lot that goes into it.
(09:26):
You also want to be thinking about workers’ comp insurance. So generally employers need to cover employees based on where they’re working. That’s pretty standard. However, if employees travel, they may or may not be covered by the policy you’ve got and it might also depend on whether they’re going to a reciprocating state. So like reciprocal tax agreements, there might be reciprocal workers’ comp agreements, but this is something you need to be looking into. So again, if you hire somebody in a brand new state, decent chance, you need to get the workers’ comp insurance in that state.
(10:07):
All right, so let’s talk about variation in employment laws generally, rights and rules will come from the state or locality where the work is performed. Like all that money stuff, we generally start with where’s the work being done? That’s the law that will likely dictate what’s going on with this employee. So general rule, we’re going to look at where the work is being done and those are the laws we’re going to apply. So as I mentioned before, there’s variation all across the country in every type of employment law, but some variations are more problematic or costly than others. So we’re going to look at some that might surprise you and might be particularly expensive. So one of those is the white collar exemption rules.
(11:01):
The federal government requires that employees who are exempt as executive administrative or professional employees sometimes called the white collar exemptions, that they meet certain duties tests, that they are paid a minimum salary and that they’re paid on a salary basis. And right now at the federal level, that minimum is $684 per week. It may well be going up this year. The DOL is trying to increase that number, but for now and for the last four years it’s been $684 per week federally, but a few states have much higher minimums than what the federal government requires. So if you’re about to hire an exempt employee in let’s say California, Washington or New York, and you’re currently based out of Texas, you need to be aware that an exempt employee in those states is to need to be paid significantly more than the federal minimum for exempt employees.
(11:58):
So if you were in Texas, you had exempt employees who were hovering around the federal minimum, you cannot hire someone and make them exempt in California, New York or Washington and expect to pay them a similar rate. I mean, probably cost of living alone is going to make their rate different, but those three states in particular have significantly higher minimums. So you will need to keep an eye on that if you are moving into new states in hiring exempt employees. Another thing to watch out for are the independent contractor tests in those states. So if you don’t hire people as independent contractors, great, you can check out for a couple of minutes here, but if you do, you do hire independent contractors, this is something you should be very aware of. Most states use the economic realities test, that is a six or seven part test, it’s a factors test.
(13:02):
You could also look at the IRS test, which I mean it lists 18 or 20 factors, but really it’s an overall balancing test to look at who controls the work and who’s most financially invested, et cetera. You can see the bullets there on the left, that’s the most commonly used test. However, some states use the ABC test and the ABC test is way more intense and it’s way harder to make someone and properly classified independent contractor in those states. Of course, notably California is one of those states, there are a few others. So if you move into California and you want to use the independent contractors, you need to be passing the ABC tests, not just the economic realities tests or the IRS tests, you need to be looking for the state tests as well.
(13:55):
There are also, as most of you are probably aware, new pay transparency laws that are passing across the country right now. There have been a number of them in just the last couple of fact. Really all of them have been in the last, I want to say three years. I think Colorado has went into effect in 2021. They were the first, and then several went into effect in 2023 and we’ve got a couple more taking effect in 2024 now. And so these pay transparency laws require that you post how much job pays with the job ad and that is a big change for a lot of employers. People are certainly coming around on that. I would encourage you to post the pay range for a job even if you’re not in one of the states that requires it, but if you are in those states or you’re trying to recruit from those states, you really need to be posting pay ranges in your job ads and you want to know about that.
(14:57):
You want to be keeping an eye on that. Also, those same set of states as well as some others who haven’t gone quite as far as requiring posting in job ads yet a number of those states have pretty intense pay equity laws, certainly much stronger than the Equal Pay Act under federal law. So it’s worth checking those laws out, particularly because the pay transparency laws will almost certainly kick off conversations about how much people are paid, which is more likely to lead to them noticing that there are pay equity issues and if you are in those states, those pay equity laws are pretty strong. So a double whammy there. If you are having to follow pay transparency laws, you want to make sure that your pay equity internally is pretty well locked down because you do have significantly more liability there.
(16:00):
Meal and arrest breaks vary from state to state as you’re probably aware if you’ve ever operated in more than one state. Some states though are pretty intense about meal and rest breaks being given out at certain times of day and being an absolute necessity as usual. California is on the list of difficult places, but Oregon, Washington, New York, there’s some states that make all the lists really, they’re very specific and if employees miss their meal rest breaks, there can be pretty significant penalties. So if you are moving someone into a new state, you need to be on the lookout for meal and rest breaks and these apply remotely. So even remote employees are entitled to a lunch and to break periods if that’s what state law says. So you might think, oh, well they can just walk away from the computer anytime all day. That’s true, but you really do want them logging a meal period and whatever break periods are required by law.
(17:09):
Just like you would if they were in an office because you can be in just as much trouble if they leave you a year from now and they go to their state Department of labor and say, hey, I wasn’t given lunch breaks. So just as much liability as ever and actually potentially more because you’re not supervising it, right? You’re not seeing that they’re not taking lunch. So if you’re not seeing that reported on their time sheets or maybe you don’t use a timekeeping system like that, maybe you’re just not checking time sheets at all, that that can become a problem.
(17:48):
Someone asked about salaried employees, no, salaried employees aren’t entitled to meal and rush breaks. However, I do encourage you to provide them as breaks make us work better and harder and they make us more focused and creative. This is one of my soapbox of forever and ever and I did in fact give you something you can search how do breaks help your brain from psychology today? But honestly, if you just do a wide open search of breaks are good for you or focus brain breaks, you’ll get lots of science about how that’s good for us. So while you don’t need to track it for exempt employees, I would encourage you to provide break time for exempt employees.
(18:38):
States also have pretty different views on payment of wages, so what can be deducted from someone’s payroll for instance? Most states say something about this and some are very particular and may even limit the amount you can take. Granted, there’s always a limit to how much you can deduct from someone’s paycheck just based on the Fair Labor Standards Act, but some states are more specific as well, and some states will also say, for instance, you can’t take a deduction for a uniform. So if you’re moving into a new state and you do take payroll deductions for uniforms, that’s something you’d want to check out. Also, if you’ve moved into a new state and you’re letting an employee go or they’ve quit on you and you’re planning to make any deductions from their final check, you’ll want to check state law because that does vary. Timing of final paychecks also varies.
(19:43):
Some states don’t say anything, so you probably reasonably have until the next regular payday, like if the person’s on direct deposit, you can probably just wait for that date to roll around, but a number of states don’t say that. A number of states say you have to pay immediately or you have to pay within 24 hours or 72 hours and often there are pretty stiff penalties if you don’t do that. So that’s something you want to be aware of. Also, pay out a vacation or PTO, this is required by a number of states. You hire someone there, you may not be able to do a user or lose it. You may not be able to prevent carryover from year to year and you might have to pay out every cent of it of an unused PTO or vacation when that person leaves you.
(20:33):
Expense reimbursement is also dictated by state. There’s a small handful of states that are very specific about what you need to reimburse, including California and Illinois. A number of states have also started requiring certain things be on pay stubs and sometimes the list is really long. Again, hopefully your payroll provider is helping you out with that, but it is something to be aware of. Another thing to think about is record keeping and statutes of limitations. I want to believe that record keeping has gotten easier because things are digital now, so keeping something around for 30 years if it’s an OSHA required record keeping or five years or 10 years or whatever is not that big of a deal. It’s not like you’re just going to get a larger and larger storage room filled with paper, but there might be different requirements by state.
(21:34):
I think the easiest thing to do would be like, we’re just going to keep these records for X number of years and X is a lot like 10 or something, but really your call it is something you want to watch out for though if you’re keeping paper files in particular and you don’t want to end up with too many of them. Another thing that varies by state is a statute of limitations for employment law claims. So granted when you move into an estate, you’re not thinking, oh gee, I might get sued here, let’s go down every worst case scenario path. I mean, hopefully that’s not what your brain is doing or needing to do, but it is something you may want to consider. Some states give employees much longer to bring a claim against an employer than others. Again, hopefully you’re just always doing your best to comply with the law, so that shouldn’t actually deter you from moving into a new state, but it is something that varies.
(22:40):
There are also some different travel time rules in certain states, particularly California, they have a much more stringent travel time requirement than the federal Department of Labor. You also might need to think about paying local minimum wages. If you’re having someone travel to a locality for a temporary period of time, whether it’s a few hours or a few weeks, there’s somewhat decent chance actually there’s a very good chance that you’re going to need to pay at least the local minimum wage to the location where you’ve sent them. For instance, in California there are a bunch of localities with minimum wages and a lot of them say that an employee might be entitled to that payment if they work as little as two hours in the city. There are usually some other requirements around it, but often these kick in maybe sooner than you think. So if you’ve got someone working at minimum wage in your location and you’re about to send them to travel, do check, particularly if you’re something to travel for a few days or a few weeks.
(23:54):
All right, let’s talk about policy approaches now and we’re going to throw up this poll question. So are the rights and benefits that your organization that you grant to employees mostly consistent across states even when state law requirements differ? So whenever legally possible, do you offer equal benefits to employees in different states? So for instance, maybe one state you’re in requires PTO payout, but two other states you’re in don’t require PTO payout. Would you say we’re going to pay out everyone’s PTO, we’re just going to make that a policy across the board and do you do that with as many policies as possible? That would be choice one, choice two, we offer some benefits, but we do draw a line based on cost. So maybe for paying out PTO, you’d say, nope, that’s way too expensive.
(24:51):
We’re only going to do that in the state where it’s required. But maybe with other benefits, like a 30-minute break every day for lunch, maybe you offer that everywhere. Or do you keep benefits in line with state law only like whatever’s required in that state. That’s all you do, like bare minimum, which might just be logical for you for so many reasons. So no judgment if that was your answer. All right, let’s look at our responses. Wow, okay, I’ve asked this question at a couple other webinars and that’s the highest I’ve seen for whenever legally possible we offer equal benefits and I think that’s awesome. That is my general recommendation whenever possible, if you can make your benefits equal across the organization, it’s really just the best for morale and general fairness. So awesome, great to see those answers.
(25:47):
Okay, let’s talk about handbooks now and handbook policies. So you have some options when you’re building a handbook. You can have one handbook with mostly blended policies. For instance, if you’re one of those 86% who just answered that, you try to give everybody equal benefits, then you’re probably going to go with this first option where you’ve got mostly blended policies and state specific policies that are very particular and maybe can’t go across state lines. Those might be in the main body or you might create an addendum. So for instance, a number of states now have what’s basically temporary disability insurance or family leave insurance, those are not going to cross state lines. So California has one of those, Oregon has one of those, colorado has one of those, that is going to need to be specific to employees in that state because someone in Iowa is not going to be eligible to get Oregon paid family leave.
(26:55):
So we will have a few differences, but you always have the option to blend as much as you can. That’s one of those first two options. The third option is to have a handbook with a shorter core section and then no attempt to blend state policies and you can either throw all the state policies into the main handbook or you can have a addendums. If you’re using addendums, you could decide to basically individualize each employee’s handbook so that they get only the addendum that applies to them. I suspect that that’s what most employers do if they are using addendums like that. Or you can just give everybody all the addendums and that might make the most sense if you’re in two or three states and you don’t want to make separate handbooks because that’s a lot of trouble.
(27:43):
So you send one to each employee and obviously just tell them to read the policies that are applicable to them or you could have different handbooks for every single state, not do any crossovers but also not have to do any addendums. So you could have your California handbook in your Oregon handbook and your New York handbook. Those are all valid. It’s whatever works best for you, but there are a lot of options there. Like I said, I’m a fan of blending whenever you can. I just think it makes employees happier when benefits are equal across the organization and it’s also administratively much simpler to only have one voting leave policy, for instance to administer. There are voting leave policies, or sorry, I should say voting leave laws all across the country, they’re all a teeny tiny but different, but honestly they’re so similar that you can probably make one policy that covers everything. That would be my vote any day of the week.
(28:51):
However, when you’re debating these unique to state policies versus blending all the policies, you’ll want to think about a few things. First of all, how are employees distributed? For instance, let’s say you have one employee in California and 99 employees in Texas. California requires a ton of benefits, right? They’ve just got benefits out the walls, their handbook is huge. Texas requires basically nothing. So your employees in Texas, your 99 employees in Texas don’t get many state benefits. They don’t really get any state benefits, so they get very little. Your California employee gets a lot. Do you want to extend those California benefits that only one employee technically needs to get to the other 99? Probably not. Let’s be honest, that’s going to be a cost choice and you’re almost certainly not going to give 99 employees in Texas all the benefits of an employee in California. Let’s just be realistic, that’s fair. On the other hand, if you have 99 employees in California and one in Texas, we’d probably want to give the person in Texas the same benefits as the other California employees, otherwise, they’re going to feel really left out and slighted.
(30:14):
And again, we’re going to think about policy administration. So how difficult will it be to administer different policies? Sometimes you have to because again, there might be a policy that really truly is only specific to one state, but in most cases you may be able to blend. One where I would suggest blending is the equal employment opportunity policy. So we do have federally protected classes. I’m sure you’re familiar with those, race color, national origin, et cetera. But then almost every state has added one or two things to the list and there’s a pretty wild mix if you look at all 50 states in DC. So we’ve got lawful off-duty conduct in a few states. Political affiliation, marital status shows up in a number of states along with familial status arrest records are protected in a number of states. Domestic violence victim status is covered in almost every state.
(31:20):
So these are the kinds of things you’ll see states tacking on to the list of protected classes. I think you should just put all of them in the handbook. I think it’s crazy to have a different list for California and Texas and say that in California we protect all sorts of different types of people, but in Texas we don’t because it almost looks like you’re reserving the right to discriminate on those bases in Texas by not putting that into your EEO list. So I would definitely combine these whenever possible, which should really be pretty much all of the time. Also, it’s useful for your managers to see the full list. I know sometimes a policy will just list the federal protected classes and then say something like and all other classes protected by state law, which is if you want your policy to say that you can, but it’s not very useful to your managers, and it won’t help them understand what behavior is unacceptable and whether it’s discriminatory or in the hiring process or it’s a little bit of harassment between employees.
(32:36):
I think it’s really useful to go ahead and have that full list. So leaves and benefits can be harder to blend. So even though I’ll say a lot of things can be blended sick leave is one that would be rough. If you’re in several states that have state mandated sick leave, those can be pretty darn hard to blend. It can be done. What will result is probably a very generous policy with almost no requirements of documentation for a sick employee and that’s okay, but it can be hard, especially if you think the solution is to make an unlimited PTO program. There are just a number of hiccups. So sick leave is one you want to look pretty hard at. Obviously extended family leaves the state FMLAs or state temporary disability insurance type programs. Those are not really going to be blendable at all.
(33:49):
Jury service leave, you can probably pretty easily make an all around, hey, everybody gets to take jury service. There are one or two states that require paid leave for jury service, so you’d want to make sure you’re meeting those requirements. Vacation payout at termination, very easy to blend that just expensive because what you’re ultimately going to do is just have the policy that says you pay out a termination if you’re in even a single state that requires that so easy but pricey. Lactation accommodations, I would definitely have those be equal across the organization and very generous. That’s going to just be the easiest way to comply with those laws. And then something like school involvement leave. So there are small handful of states that require that you offer a certain number of hours to parents who want to be involved with their kids’ school. It’s like eight hours, it’s not a big benefit.
(34:52):
So that’s one where I would certainly encourage you to consider giving that organization wide, even if it is only required in a couple states where you operate and maybe you operate in a lot of states and that makes people feel good, right? It’s one of those feel good things. It’s not even so much about whether they use it or not, they just would feel supported by you, the employer that they could participate in their kids’ stuff. So I figured we’d throw in an example of where you could blend policies. So I pulled these from policies I’ve written in the past. Like I mentioned, most states have some kind of voting leave. Often it’s unpaid, but fairly often it is paid at least for two hours. So I pulled a sampling here. California and Delaware, you have to give two hours and the leave is paid and employees need to give two days notice. In Georgia you have to give up to two hours, but the leave is unpaid and employees really only have to give you one day of notice.
(36:12):
And then in New York, if an employee doesn’t have a certain number of non-working hours while the polls are open, they’ll be granted enough time. So not just two hours but enough time so that they can vote and up to two hours will be paid and they need to give two days notice. So you could fairly easily blend all four of these states into one policy that says something along the lines of if an employee doesn’t have sufficient time to vote on voting day, they will be granted enough time off to do that. Two hours of it will be paid and they need to give notice one day, at least one day prior to election day. And honestly, that thing I just said just now could probably be used almost anywhere. That would probably be a good nationwide policy. Don’t quote me on that, I would want to double check myself, but I suspect that that covers pretty much every state if you wanted to blend a whole bunch of them.
(37:19):
So that’s an example of how you can take three policies for four states that are just a touch different but could certainly be blended and that would really simplify your administration as well. All right, we’re down to best practices for distributed workforces. If you do have any questions, feel free to put those in the Q&A. We don’t have too big of a crowd today, so I should be able to get to all those questions. One of the very compliancy questions we get for employers in multiple states is about posters and notices and what do we do? Do we email everybody, the posters, or the notices or do we have to send everybody one of those $35 all in one laminated things that make them post it in their own kitchen? How do we deal with this? Unfortunately so far the laws are not really keeping up with reality. So we have historically all these laws that say posters must be posted in the workplace in a conspicuous location with no respect for the fact that a lot of people now work from home.
(38:36):
So the law hasn’t changed. Legislators are not spending their time modifying those laws and they’re not going to start, thankfully the new laws, some, I should say some of the new laws that are coming out right now that require notice are specifically saying that you can provide that notice electronically. So that is a small gift that some of the new laws are saying that. So you have a variety of approaches you can post on the company intranet or virtual bulletin board. Someone just asked, can we post to SharePoint? Yes, that is probably going to be the most common approach to remote workers and these required notices. Is it absolutely liability free? I can’t promise that. Again, technically a lot of these laws still say it must be posted in the workplace and I guess you could make the argument that the workplace does not include SharePoint.
(39:46):
That is not the workplace, the workplace is their home office or the kitchen counter or wherever they do the work. I don’t think there’s a lot of liability here. I don’t think this is the thing that the federal government or the state departments of labor really care about, to be perfectly honest, I can’t imagine them wasting any time going after you because you put a poster on SharePoint as opposed to printing a copy and mailing it to your remote employees. That said, I cannot make that promise. It is not legal advice for me that you can or should do that. However, I do think the risk is very low. So I would probably do that. I would probably put the thing on SharePoint, but what I would also do is make sure that I was telling employees on a somewhat regular basis where those notices were. I know from personal experience, my company’s SharePoint is probably really well organized, but I can never find anything. I don’t remember what I’m supposed to click on and then what sub folders I’m supposed to click on.
(40:51):
I’m always having to ask people and admittedly that particular kind of detail just doesn’t stick in my brain all that well and it does for others, but maybe pretend that everyone is like me and we’ll need reminders because again, the laws require that you put things in a conspicuous location, meaning an employee doesn’t have to work hard to see it, they’re going to see it by accident, they’re going to see it on their way to the lunchroom. What we don’t want to do is put these notices somewhere in SharePoint that is deeply buried and then never mention them again. I would be giving employees somewhat frequent reminders about where we’re putting these things at least yearly mention where all the posters are, the updated posters, the notices, whatever. If you’re going to do this online, if you don’t have a company intranet or a particularly good place to put these things, then you can certainly either scan the notices or email them. You can send links to all of them that the employee can click and then just see it on the state government’s page. You have a lot of options here.
(42:02):
Again, and as I said on the page, non-compliance I think is very low risk, but I can’t say it’s zero risk. Still I imagine most employers are already doing this with remote employees. All right, let’s talk about safety obligations so you’re not off the hook with workers’ comp. That’s almost always like the first question I get when I start talking about safety for remote workers is we don’t have to pay workers’ comp if they’re at home, right? Well you might, you very certainly might. So you do get out of OSHA obligations, so the whole OSHA is not going to come inspect your remote employees homes and write you up, so don’t worry about that. However, I would suggest that you talk to employees about their homework space and whether it’s safe and cord free and whether they can set it up in an ergonomic fashion because again, if they’re sitting at the kitchen counter in one of those tall chairs and they’re working off a laptop on that little tiny keyboard and they’re not having their elbows at a 90 degree angle, the ergonomic side of things can go sideways really quickly.
(43:33):
And then you’ve got carpal tunnel and all sorts of other claims that you’ll certainly be on the hook for in terms of workers’ comp. So I do think although you don’t technically have a safety responsibility as far as OSHA is concerned, I do think you should talk to employees about their home workspaces and make sure they are ergonomic and comfortable and safe because if they step down from their kitchen counter and they trip on their laptop cord, you’ll probably be on the hook for that. Can’t say for sure, but these are things you want to think about.
(44:11):
You also want to consider time tracking. So I mentioned this a little bit earlier, you don’t have eyes on people and it’s certainly much easier for them to of course be late to work, but also to work late or to walk by their laptop at 8:00 PM and stop to check their email. And if they’re a non-exempt employee, then that time needs to be tracked one way or another. Obviously if you have an office, someone has an office in the city, someone is not going to randomly walk by their desk at 8:00 PM so that’s not really a risk. Granted, everybody’s got phones now and a lot of us have our work apps on our phones. So even for those who work in the office, this is something you should keep in mind. Are they using their phone once they get home to do work? If they are, that needs to be tracked.
(45:07):
If they’re non-exempt, the best way to approach this all around is to have a really clear policy and to make it clear to employees that you do want them to track their time and you really do. You might think now like, oh they don’t mind doing this. I’ve told them they don’t have to. It’s out of their goodness of their heart. They would never sue me for this. You don’t know how the employment relationship will end. You cannot predict the future. This person might leave a year or three from now under a very dark cloud and they might go straight to their state department of labor and say, Hey look, my employer knew I was working and not tracking time every other night and I didn’t get paid for it and I want my back pay now. And they’re probably going to have a pretty strong claim. So be mindful.
(45:58):
Time zones are another thing you’ll want to be thinking about when you’ve got people across the country. So I am in Portland, Oregon, I’m on Pacific time. I used to work with people who were all on Pacific time and now the people I work with are two hours and three hours ahead of me and it has definitely sort of shifted how I do my work. You don’t necessarily have to accommodate time zones, but it is something to think about and it may be something that you want to get really specific about. If your organization’s productivity is really dependent upon everyone being in the same place online at the same time, then you’ll want to be clear what people’s expected work hours are. Particularly if it’s not the standard eight to five or nine to five. A lot of people will sort of assume that those are the hours you want worked and if you didn’t mean that because they’re in a different time zone and you actually need them to work 5:00 AM to 3:00 PM that’s something you should let them know ahead of time.
(47:07):
All right, this is my last slide. So again, if you’ve got questions, feel free to throw those into the Q&A now. So last thought is on access to bosses and interaction with coworkers. So in particular if you have a physical office where a number of people work and then have added on remote employees, access to leaders can be difficult for the remote employees or equal access to meetings can be difficult for those employees. Prior to the pandemic, that was how we were set up. We had a few key physical locations and then a number of remote employees and we’d have team meetings in the big conference room and we’d have our remote employees video in and that was never satisfying for them. It just wasn’t the people sitting around the table are not looking at the video.
(48:05):
It’s very hard to get those people included. Once we all went remote during the pandemic, the previously remote employees reported that meetings got way better because now everyone was on the same page or on the same screen rather literally. So those are things to consider and if you do have people calling in remote, you maybe can’t make it perfect but do your best to set things up so that they do feel included. You also want to make sure you’re giving those casual interactions to remote employees or the possibility of casual interactions. So that might mean having a teams or a Slack channel where people can just chat or maybe you have a whole bunch of channels that are dedicated to special interests or you set up a program where people just meet. There’s an app for Slack, I think it’s called Donut that we’ve used and it connects people for 15 or 20 minute chats that work in different organizations, sorry, different departments that draws names from a hat and puts them together.
(49:16):
So there are lots of ways to make this happen, but we do want to find ways to integrate our remote workers with the rest of our staff or integrate our remote workers with our remote workers if everyone is remote. All right, I’m going to move on to our questions now. Thanks all for hanging in. We’ll probably be out of here in a few minutes. Someone asked, is time tracking a big risk risk? Yes, I think it’s a huge risk. I did wage an hour when I practiced law myself and wage an hour, there are statutes where you don’t have to do it wrong on purpose, doing it wrong on accident gets you in just as much trouble, so you really want to make sure you’re getting it right. Plus these wage and hour lawsuits generally have penalties under state law and federal law and often the damages are double what was actually owed to the employee so they can really, really stack.
(50:28):
So I think time tracking is a huge risk and something to be very mindful of whether you’re remote or not, honestly. But I do think being remote makes it trickier, so I would certainly pay attention to that. Have you run into complexities around nomad employees? We’ve had some employees who wander the country have no physical address but claim a certain state like maybe South Dakota as their permanent home location with a post office box. However, that state does not allow you to remit payroll tax without a physical address. I mean, I know this is a problem, I don’t have a fix for it, it’s definitely an issue. So you’re not alone in having that problem and you may want to consider saying, hey, if you’re going to work in a state, we need you to have a physical address. That’s just what’s required by state law, this is what we need. I mean, it might be that you can’t really have a nomad employee for the purpose of compliance.
(51:38):
It might be something you say, we can’t employ someone who doesn’t stay in one place ever because it’s just too complex and we’re afraid of the compliance risks. I mean, I don’t think that’s unreasonable. If you do want to keep your nomad employees, which good for them, that’s a cool way to live if you’re into that, then I would probably talk to an attorney honestly and get their take on your particular situation. And maybe that employee needs to say they live in Iowa instead of South Dakota to solve the tax issue. That is not my legal advice for the record. Taxes are not my area of expertise, but certainly we’re not the only one who is running into that problem.
(52:29):
Someone asked employees that work at our online events are very part-time averaging less than 10 hours a month. How do I certify I-9 docs for a remote employee? I Googled and it said I needed to fly someone out there to verify. Yeah, you don’t need to do that anymore. When we got the new I-9 forum back in, I want to say it was August 1st that came along with a remote verification process that you can use to verify I-9s. It’s pretty cool. You do need to be enrolled in E-Verify the federal program in order to use remote verification. And we have tons of information on that on the platform. You can also just Google search it, search remote verification or I think they also call it the alternative verification process or alternate verification process. You’ll find it, but yeah, you can do I-9s remotely now.
(53:21):
However, you have to be using E-Verify in order for that to, all right, let’s see what else we got here. Time zone. Do we need this in a job ad or just make sure it’s a policy that’s presented during orientation? Ooh, I would absolutely put it in the job ad. I mean, if someone gets all the way through the interview process thinking that they’re going to get to work eight to five and their time zone and you don’t tell them until orientation on day one, two, or three that you actually need them to work 5:00 AM their time to 3:00 PM, they’re probably quitting on the spot or they’re going to be a terrible employee or they’re going to be really mad at you. So I would a hundred percent make that clear in job ads that you operate on central time or Pacific time or whatever you do and that those are the hours you expect from employees.
(54:19):
We have employees in 22 states, blending seems daunting. Any suggestions for other easily blended sections like voting leave? Great question. Let’s see. I think voting leave, jury leave, domestic violence victim leave is one you could probably blend. Some states offer a lot. They say you have to give a victim up to 12 weeks while others might say two weeks. But honestly, if someone has experienced domestic violence, I had give them the 12 weeks, it’s not paid. It’s always unpaid. Organ donation leave, there are states that have organ and bone marrow donation leave. Those could be pretty easily blended. It’s a really good question, but I don’t have a handbook handy in front of me. But you don’t have to blend them all, don’t feel like you have to do that. But where you can, it will make administration easier and probably make your employees happier.
(55:20):
But certainly for some policies it’s just going to be too hard. It’s just not going to be worth it. Trying to blend mandatory sick leaves across states is tough. Not to say they can’t be done, but if you did do it, you’d probably want to get professional assistance. All right, are there good resources you can reference or contact for questions on or gathering information specific to your business situation? I mean, I think the first thing you want to do is probably go to your state, the Secretary of State’s page for each location where you have employees. That would probably be the place to start to figure out if you need to register your business in that state. That’s probably a good starting point. But I do think that there are professionals, I can’t give you a reference, not because it’s illegal, I just don’t have one. But there are people who specialize in this sort of thing. Business tax gurus probably.
(56:32):
So unfortunately I don’t have a great suggestion, but there are people out there who can help and certainly calling an attorney as well, a business attorney should be able to guide you through some of that stuff. All right, last question. If a staff member is now working and living in Georgia, but all the work is from Massachusetts for clients in Massachusetts, do we have to register in Georgia? So someone earlier on said, maybe you don’t have to register if you only have one employee in a state. However, of course you’re still going to have to use the appropriate tax scheme, but you may well need to register in Georgia. The fact that the person in Georgia is working with Massachusetts clients is irrelevant. The fact of the matter is they are in Georgia. So you need to figure out what Georgia’s rules are around having an employee there and follow all of those. It doesn’t matter who they’re working with or what they’re doing. The fact of the matter is they’re in Georgia. So you need to figure out what rules apply in that situation.
(57:42):
And then finally, okay, actually I’ll do one more question. If we only have one employee in a state, do we have to follow that state’s laws? Yes. Yes you do. Just one employee in California, New York, Michigan, Illinois, the laws in that state are going to apply to that employee. So you need to figure out what those laws are and you need to apply them. Even if there’s only one employee there and 567 employees elsewhere, the employee that is in Illinois will be entitled to Illinois Employment Protections. All right, thanks everybody. Great to have you here today. I hope this was useful. Again, we will send you the slides and a copy of the presentation within a day and I look forward to seeing you at any webinar in the future.
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