Beware of overlooking legal requirements for remote workers

Over the last several years, employers have witnessed massive pendulum swings in the prevalence of remote work: from entire teams shifting to remote work within days in 2020, through return-to-office initiatives rolling out in recent years.

It appears we are now reaching stable ground, and it is no surprise that remote work is here to stay. However, remote work looks different in 2026 than it did in 2020. It looks different for every employer: some have entire divisions working remotely full-time, while others have only a handful of individuals working hybrid schedules.

Regardless of the number of employees who work remotely or on what schedule, employers should be sure that they maintain compliance with applicable laws and regulations. This includes requirements specifically for remote employees as well as those applicable to all employees but that require special attention when handled remotely.

 Remote workers across state lines

Some employers may permit employees to work remotely, whether full or part time, in a state separate from where the business is registered and operates. In addition to the implications regarding applicable minimum wage and other employment standards, employers that permit remote work from out of state may also open themselves to certain liabilities. For example, certain states may require businesses to register for a business license in the state where employees work remotely or may determine that an employee in the state creates a sales tax nexus.

Employers should also keep themselves apprised of the applicability of state-specific sick time, unemployment, workers’ compensation, and leave laws, and determine whether any are implicated by the presence of a remote worker in a given state.

Nonexempt remote workers

The same wage and hour laws apply to nonexempt remote employees as to their on-site counterparts, with one important distinction. In both categories, employees are subject to the wage and hour laws of the state and county in which they physically perform work. Accordingly, a remote employee’s place of work for purposes of wage and hour issues may be in a different county, or even state, as the business’ premises.

Nonexempt remote workers are also entitled to meal periods and breaks. The specific break time entitlements may also differ depending on the employee’s physical place of work, specifically for those employees working from a different state than on-site employees.

Required reimbursement

Especially for those employers that provide office space for part-time use, there is significant concern regarding payment for or reimbursement of expenses related to remote work. Such expenses could include obvious items like furniture or supplies, and less obvious items like electricity or internet. Under federal law, employers are not required to reimburse their employees for such expenses unless they are significant enough to cause their gross earnings to be reduced below the minimum wage. However, several states have more specific laws requiring reimbursement of expenses. For example, California requires employers to reimburse remote workers for a reasonable percentage of necessary, work-related expenses, even where the employee voluntarily opts to work remotely.

Compliance with required posted notices

In a workplace with no break room, water cooler or bulletin board, employers often forget that they are still required to “post” required worksite posters. Certain federal and state laws require employers to post specific notices to ensure employees are apprised of their rights. This obligation does not change merely because employees are performing work remotely. According to the U.S. Department of Labor, employers that have an exclusively remote workforce may satisfy continuous posting requirements by posting notices electronically in a location where employees have readily available access at all times. For employers with a mix of remote and on-site employees, the Labor Department encourages both online and hard-copy posting methods.

Remote work as a reasonable accommodation

In recent years, employers have seen a rise in requests for remote work as a reasonable accommodation under the Americans with Disabilities Act or similar laws. In certain circumstances and where the employee meets certain requirements, remote work may be a reasonable accommodation. Accordingly, employers should not immediately reject such requests. The determination of whether remote work is a reasonable accommodation for a specific employee requires a case-by-case analysis that should be conducted with the assistance of counsel.

Takeaways

In many ways, managing remote workers is the same as managing on-site workers. However, some significant differences, such as the location from which work is performed, can result in crucial variations of the applicable standards, as well as open businesses to potential liability in states other than the one they operate in. Some more basic issues, such as notice posters, can also easily be overlooked. Accordingly, employers should ensure they are aware of where their employees are working and that all applicable laws and regulations are followed for both on-site and remote workers.

Lex Shvartsmann is an attorney with Barran Liebman in Oregon. She advises and represents employers on a wide range of workplace matters. Contact her at 503-276-2111 or [email protected].

Max Retzlaff is a law clerk with Barran Liebman. He works with attorneys to perform legal research, draft employment policies, create client training materials, and handle case management. Contact him at 503-276-2130.