We are frequently asked, “Which local laws apply when workers temporarily relocate? Does the answer depend on whether the employer assigned the employee to work in that location or whether the employee is some sort of digital nomad who works remotely from locations unknown?”
The answer to these questions isn’t always clear, explains Davenport Evans Employment Lawyer Jean Bender. Employers must consider that the employment relationship is governed not only by federal law, but also employment laws in the states, counties, and cities in which remote work is performed. Generally, the laws of the place in which the work is being performed are the ones that govern, even when an employee is working temporarily in a location. However, court cases have not caught up with the new trend of digital nomads who work remotely, and employees don’t always tell the employer where they are working. The court decisions addressing this issue typically deal with situations where the employer has assigned the employee to work in a different location for a period of time.
It is important that employers understand which rules apply. As many South Dakota employers have learned since the COVID-19 pandemic, local laws vary dramatically, and it is frequently very difficult to navigate through the patchwork of those laws.
Employers need to consider a variety of local laws, including minimum wage and overtime requirements, income taxes, unemployment taxes, workers’ compensation, and various leave laws. If advertising for remote locations, employers should pay particular attention as there are a burgeoning number of locations applying total or partial bans on criminal background checks, as well as wage transparency and earning statement requirements.
One practical way employers can address a number of these issues is by having every employee working remotely sign a remote work agreement. That remote work agreement should include a specific provision addressing where the employee will be working and requiring the employee to provide written notice to the employer if the employee’s remote work location changes.