A growing number of businesses are embracing remote work, which can be an exciting development for business owners and employees alike. At the same time, there are complexities that may need to be tackled. One common concern is how to approach employee and employer rights and responsibilities, which can vary from place to place. Do local laws of remote employees’ location make a difference to their Texas employer? Here is what people need to know.
Respecting local laws in employee jurisdictions
One thing that employers might not consider when agreeing to a remote work arrangement is how the laws can vary between states, or even local areas. An employer may find that the business is required to adhere to laws in the area where the employee lives, which can add some complications if the workforce is spread out between places. For example, an employee who lives in a state with paid sick leave requirements may be able to obligate their out-of-state employer to respect this requirement. Or, an employee who signed a noncompete agreement but then moved to a location where that contract is not enforceable may not be able to be held to those parameters. It’s a good idea for employers to understand the employment laws in all areas where their workers reside.
Tax and registration considerations
Another consideration for remote workers and employers is taxation, particularly the withholding of taxes from paychecks. If the employee carries certain responsibilities, a company may be considered as operating in the new location and could need to register accordingly. Finally, there may be reporting requirements in the state of work for the employee. All these factors should be considered by an employer when hiring a remote employee in another location.
There are, of course, many benefits to having a workforce that is diversely located. Many companies find it beneficial to have perspectives from different parts of the country or the world. Additionally, giving employees more freedom may help with retention, especially for companies based in more expensive cities or when competing with employers who allow for this. While each firm must weigh the pros and cons for themselves, those who choose to proceed with hiring remote workers from locations outside of Texas could benefit from speaking with an experienced business lawyer to understand the potential legal implications.
