It has been five years since the COVID-19 pandemic sent a large percentage of the American workforce into their homes to work remotely. Since that time, many employers have continued to embrace remote working even in instances where employees work from homes located in many different states. But employers embracing a “work from anywhere” policy need to exercise care to ensure they are not accidentally running afoul of local requirements.
Having even one worker residing (and working) within a particular city or state may mean that the employer needs to comply with varied local rules. The reality is that employers always need to do some due diligence, even just to confirm whether they need to do further due diligence regarding local requirements. Here are some key considerations for employers to bear in mind before saying “yes” to a “work from anywhere” arrangement.
What Kinds of Laws Might Apply to My Employee(s) Working Out-of-State?
Critically, it is not just states that implement unique rules regarding their workers: some counties, cities and towns also protect workers, in ways that may differ from state laws. For example, Illinois law sets out that eligible workers are entitled to forty hours of paid time off, while Chicago law states that eligible workers are entitled to forty hours of paid sick leave plus an additional forty hours of paid leave to be used for any purpose.
The sky is the limit, in terms of what protections states and municipalities might offer to resident workers – after all, these jurisdictions serve as “laboratories” of our democracy free to experiment with new policies, as former United State Supreme Court Justice Louis Brandeis set out nearly one hundred years ago. A few local requirements employers may need to be aware of are:
- Sick time: Different jurisdictions take different approaches to which employees are eligible to accrue sick time, the rate at which the time is accrued, whether the time is to be paid or unpaid, and what purposes it may be used for. Even the definition of who might constitute a “family member” for purposes of sick leave varies.
- Sick time/Vacation/PTO rollover rules: Some jurisdictions mandate that employers permit employees to roll over certain types of accrued time from one year to the next, up to certain amounts (i.e., 40 hours of accrued unused sick time). Some prohibit employers from placing any caps on the rollover of certain accrued time. And rules may differ based on whether time off is accrued, versus “front-loaded” at the beginning of a year.
- Other leave: Different jurisdictions have different rules regarding access to paid family and medical leave, and also regarding access to other types of paid or unpaid leave, for instance leave associated with organ donation or voting.
- Minimum wage requirements: Even a decade ago, it was rare for a locality to implement a minimum wage different from the applicable state minimum wage. Now, an increasing number of cities and towns (more than 60 of them, as of March 1, 2025) have enacted their own minimum wages at a higher rate than the applicable state minimum wage.
When Do These Laws Even Apply – What if Most of My Workers Are Located Elsewhere?
Perhaps the most frustrating challenge facing an employer with remote workers is the fact that the rules regarding when various rules apply vary from jurisdiction to jurisdiction. For instance, some statutes are clear that a particular rule only applies to employees of an employer who employs more than a certain number of employees within that particular state. But other rules may have a broader reach. For instance, some rules explicitly state that they protect any worker within that jurisdiction – period.
Other rules have a scope that is not clear. For instance, what if a rule says it applies only to local employees of an employer with more than 40 employees total? If the rule does not specify that it means 40 employees within the jurisdiction, arguably the rule applies if the employer has more than 40 employees working anywhere, even if only one employee is local to that jurisdiction.
Given the patchwork of state and local employment laws and ordinances, employers looking to embrace “work from anywhere” should seek advice from experienced employment counsel regarding the rules of the road – and from there, whether any further changes need to be put in place.
