What to Know When Employees Work Out of State

It’s never been easier for teams to work in different states and never been trickier for employers to keep up. Whether your employees are remote, hybrid, or occasionally crossing state lines for work, multi-state operations come with real compliance challenges.

From wage and hour rules to paid leave laws, no two states are exactly alike. If even one employee is working in a different state, it’s not as simple as using your home-state policies across the board. So where should you start?

Know Where Your Employees Are, Not Just Where Your Office Is

The first step is understanding where employees are regularly performing their work. If an employee is working in a different state for an extended period, that state’s employment laws may apply. This could mean setting up state-specific payroll tax accounts and updating your policies to reflect local leave laws or wage requirements.

Update Your Handbook (and Not Just Once)

A one-size-fits-all handbook typically won’t work for multi-state teams. Multi-state employers should consider a base handbook that covers federal and companywide policies, with addendums or state-specific sections layered in. Make sure your leave policies, meal and rest break practices, and final paycheck rules are compliant in each state you have employees. Taking the time to address this now can help you avoid more serious compliance issues later.

Watch Out for Wage and Hour Traps

Minimum wage, overtime calculations, exempt status, and required reimbursements can all vary by state (and sometimes even by city or county). What’s legal in one place may be a violation in another. For example, California has daily overtime requirements which differ from other states. If your employee is working outside of California, they may only be entitled to overtime after 40 hours in a week. If your managers supervise employees in multiple states, make sure they have the tools to confidently navigate those differences.

In Summary

As teams grow across state lines, compliance gets more complex, but it is manageable with the right plan. Keep track of where your employees work, adapt your policies as needed, and stay proactive about training and support. If you need help reviewing your current practices or updating your handbook, our team is here to help.