Remote Work Due to COVID-19 Triggers Compliance Issues

Tip of the Month - Employment and Labor Law

The COVID-driven prevalence of remote work arrangements and the expected, widespread post-COVID continuation of this trend raise a major compliance issue for companies: With employees now based in states beyond a company’s own physical locations, companies may be required to comply with employment-related laws in the states where their employees are actually working. Simply put, multi-state remote work arrangements can trigger compliance obligations under wage and hour, sick leave, family and medical leave, unemployment insurance, and workers’ compensation laws, among others. Laws affecting training requirements, the enforceability of non-compete and non-solicitation agreements, business registration obligations, and payroll tax remittances may also be implicated. The amount of time spent by an employee performing remote work in a given location can also be a determinative factor. As COVID’s surge in remote work gives way to long-term or permanent remote work models, employers must promptly determine their compliance obligations in the states where their employees are actually employed.

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