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Use this guide to consider the tradeoffs of a remote workforce on your HR compliance and manage your multi-state compliance.
Three years into allowing employees to work remotely and many businesses are choosing to stick with it permanently. There are many benefits of remote work, but one of the drawbacks can be the impact it has on HR compliance issues.
Overall, employee claims against businesses are increasing. Just because you don’t have workers in an office, doesn’t mean your liability is reduced—in fact, it can increase. The same litigation claims businesses are used to seeing are increasing but approached from a different angle because of remote work.
As a result, remote work and human resource compliance can get pretty complicated. Here are the most common HR compliance issues you may be up against if you have remote workers—and how you can protect your business from them.
While a basic minimum wage is set by federal law and the Fair Labor Standards Act, wage and hour laws vary significantly by state. In some cases, even certain cities will have different minimum wage standards, meaning there are already federal, state, and local laws to contend with. As you hire remote workers, it can become more difficult to track employee locations and wage requirements.
Full or part-time employee classification also becomes more important with remote workers. If a non-exempt employee is working from home, accurately tracking time can be difficult to do. But even if a worker is remote, they are still entitled to pay for all hours worked—including overtime.
Take the following steps to remain compliant with wage and hour laws for remote workers.
Most workers’ compensation cases have proven that employers are liable to provide workers’ compensation for an employee’s injury while working from home. The way “work environment” is currently defined under the Occupational Safety and Health Administration includes remote employees’ environments. However, this can be subject to interpretation.
To limit confusion and interpretation of workers’ compensation laws, employers should:
A lot of people think that harassment and discrimination are less of a problem when employees work from home. That’s not necessarily the case. Employees feel the effects of harassment and discrimination virtually, just as a person experiencing cyberbullying feels them.
For example, coworkers wearing inappropriate clothing or displaying objects that others find offensive is considered harassment. Discriminatory language and comments can still be shared over web meetings and chat, too. Even having fully remote vs in-office or hybrid employees could lead to employees feeling as though they are not receiving the same treatment or “flexibility” as others.
To avoid a difference in treatment becoming an issue of discrimination, take the following steps.
Human resource compliance becomes more complex for a remote workforce, but even more so for a geographically diverse remote workforce. Your legal obligations can more than double the second you allow one worker to live in a state different from your primary location of business.
Payroll, taxation, benefits, wage and hour, and discrimination and harassment laws vary from state to state. The HR compliance issues above can quickly become more challenging to follow, but they’re not impossible. Companies wishing to take full advantage of remote work and allow workers to live in other states just need to take some additional steps to ensure compliance.
Multi-state hiring policies involve all of the above-mentioned issues, as well as issues specific to just multi-state hiring. These include (but aren’t necessarily limited to) the following.
While the above is by no means an extensive list of the hurdles associated with multi-state companies, especially with remote workers, there are a few concrete steps to take toward compliance.
The Department of Labor recently issued guidelines concerning remote employees and FMLA eligibility. In short, remote workers are eligible for FMLA on the same basis as in-office workers. The employee must be employed with the employer for at least 12 months and complete 1250 working hours.
Additionally, the employee must work for a company or employer that employs a minimum of 50 employees within a 75-mile radius of the official on-site location.
Earlier this year, the Department of Labor (DOL) released guidance for employers about how to correctly apply the eligibility criteria for the Family and Medical Leave Act (FMLA) to employees who work remotely.
In order to be eligible for FMLA, employees must:
When an employer hires a remote employee, that employee’s physical work location may fall outside the 75-mile radius required for eligibility. The DOL recognized the increase in the number of remote workers hired by employers over the past several years and decided to address issues surrounding the geographic eligibility issues that arose.
Effective February 8, 2023, employers should not consider an employee’s remote home address as the primary worksite location. Instead, the worksite is the location to which the employee reports or from which their assignments are made. If there are 50 or more employees within a 75-mile radius of that worksite, and the other eligibility criteria are also met, then the remote worker has met the FMLA eligibility criteria.
To ensure HR compliance with all FMLA requirements, take the following actions.
A comprehensive remote work policy that covers each of the areas above will help you maintain HR compliance with a remote workforce. Namely, make sure your policies cover the following areas in depth:
Thankfully, tackling HR compliance on your own isn’t a burden you have to deal with. Obsidian HR can keep you informed of changes and be a resource for how to get compliant. We’re here to answer questions, advise on best practices, and help you strategize and plan. We’ll even conduct regular reviews and audits of your HR policies and procedures, or help you create them from the ground up. Reach out to us to learn more or download our guide below!
Remote work has many benefits for employees and employers. While it does present certain challenges for Human Resources, they’re navigable with proper documentation, thorough record-keeping and training. This article touched upon five major compliance issues, but HR professionals may come across others as remote work becomes the norm. Many potential issues may still be mitigated by leveraging the strategies above and by keeping reliable, updated records.