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Of all the changes brought on by the height of the COVID pandemic, the option of working remotely has become increasingly popular among employees. Technology makes it easier than ever for many to work from home and stay connected with their co-workers and supervisors. But there are some issues employees should consider when making the change to remote work.
Non-Compete Clauses Can Impact Employment Options
One of the most important things workers can do when joining a new company is read the contract or offer letter and any other documents in an employee handbook or other work policy manual. It's not uncommon for employers to include non-compete clauses in their contracts. If you sign a non-compete clause, it could limit your ability to work for a competitor for a certain period or in a specific geographical area. If you are looking to leave your current job for one that offers remote work, you should ensure that a non-compete clause wouldn't prevent you from doing so. And if you are about to start a new job, it's preferable not to have a non-compete. If you are required to sign one, it's a good idea to try and negotiate the terms before you sign and make sure you understand them. See our prior blog post on Non-Competes.
You May Be Reclassified
Remote employees might lose some benefits and entitlements if they are reclassified as independent contractors after changing jobs. Whether or not an employee should be reclassified can be a complex issue and depends on many factors. But if you're a worker who has moved to remote work, you should be aware of it. You may want to speak to your HR department to see if your job classification has changed and what that could mean in terms of changes to your compensation and benefits.
Employer's Policies Will Still Apply
It is generally the case that workplace rules and benefits apply to a remote worker regardless of location unless a workplace policy specifically states otherwise. Workers who are paid hourly should keep track of their working hours and report them to their employers. They should be aware of work times and forms of communication and adhere to the company's set time zones. And they should adhere to office rules, even if they're not in the office.
For example, if an employer requires two weeks' notice for vacation days, that rule should still apply to remote employees. Similarly, rules around sensitive data or documents still apply even if the remote worker is in their own living room. The same goes for other office policies, such as dress code.
Similarly, workers' entitlements like workers' compensation are still intact in a remote environment. And workers who work from home are entitled to use their medical leave or sick days when needed.
A couple of laws that could differ based on a worker's location: overtime pay, work breaks, and certain benefits. Despite differing state laws, employers are generally required to follow the laws of the state in which the worker, not the company, is located.
Tax Consequences
Generally, employees are required to pay the taxes associated with the state and, in some cases, the city in which they work. That means if an employee moves from an office in New York to their hometown of Cincinnati, they'll have to start paying state and local income taxes. And an employee might be held accountable for taxes even if they were working from a state temporarily. States have differing rules on how much time workers can spend there before being subject to taxes. Remote workers should make sure their employers know where they're working so that the company can withhold the correct estimated tax payments from their paychecks. If not, the employee could be responsible for taxes that the employer usually handles.
Expense Reimbursement
As employees begin to utilize their homes for work, some have expected support for the expenses associated with maintaining a home office. Existing laws on expense reimbursement differ from state to state, but none were created in contemplation of remote work, particularly at this scale. This can create uncertainty for employers about which expenses are reimbursable and how much employers are responsible for reimbursing.
Some companies are offering stipends to help with internet service or office furniture. Others are providing full reimbursement for home office expenses. Whatever your company's policy is, make sure you understand it before you incur costs for your home office.
Need Guidance with A Transition to Remote Work?
While some challenges come with remote work, it can be an excellent option for many employees. If you're considering switching to remote work, the attorneys at Freking Myers & Reul can help answer questions about employment law and how it applies to remote work.
Contact us by calling (513) 866-8816 or through our online contact form.