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Labor Law Considerations for Work-From-Home Employees

By John DiGiacomo

Hiring (or converting) employees to work from home is really not that different than hiring an employee to work in a standard employment circumstance. A work-from-home employee is entitled to all the protections of federal and state labor laws. For example, the applicable labor laws related payment of wages and overtime apply with equal force to an employee that works from home. That being said, there are some important considerations that deserve special attention when hiring work-from-home employees. The key is to remember that the labor laws that apply to the remote worker are the laws of the state where the worker is providing the work.

Postings of Labor Law Notices

Generally, federal and state labor laws mandate that certain notices must be publicly posted concerning employee rights and privileges. These notices must be posted in a location, such as in an employee break room, where employees can see and read them. As an example, federal law requires posting of notices with respect to rights to equal employment, non-discrimination and non-harassment in the workplace, occupational safety and health rights, family and medical leave rights, fair labor standards and more. State laws often require an even more extensive list of notices.

Work-from-home employees are entitled to these notices too. However, the labor laws are lagging behind with respect to how work-from-home employees are to receive these notices. But, likely, compliance can be effectuated by sending these notices via email or via paper mailing.

One tricky aspect is to determine which notices to send. As noted, the labor laws that apply are the laws of the state where the employee works remotely. For example, an employee of a Michigan business that works from his/her home in Indiana is entitled to Indiana labor law notices. However, if for some reason, the same Indiana resident drives to a remote-work location in Ohio — maybe living close to the tri-state border — then the employee will be entitled to Ohio labor law notices.

State Payroll Withholding Taxes

With respect to payroll taxes, the same rule applies. The state law that will apply is the law where the employee is doing the work. Thus, in our example, the employee working from a home in Indiana will have Indiana law applied to what should be withheld for state taxes.

Wage, Hour, and Other Requirements

The same rule applies to wages, hours and other labor requirements. An Indiana resident working from home is entitled to the protection of Indiana laws with respect to minimum wage, overtime pay, equal pay and more.

Policing Meal and Other Breaks

Another tricky aspect of having remote workers is the need to provide meal and rest breaks. Many states require that employees be given mandatory meal and/or rest breaks if they work beyond a certain number of hours. These rules apply with equal force to work-from-home employees and employers can be penalized for not giving proper meal and rest breaks. This may seem paradoxical since the at-home employee has control over his or her working hours. However, courts have held that the employer is still liable if the employee does not receive the mandated breaks.

The solution is to REQUIRE clocking in and out for work-from-home employees. This allows the employer to police rest and meal breaks, to control hours worked, to ensure that work is actually being done, etc. Clocking in and out is also important for reducing the financial risks associated with health and safety. Salaried employees should be required to clock in and out too. As discussed below, this will help limit liability under the workers compensation laws.

Safety and Workers Compensation

Just like regular workers, work-from-home employees are entitled to a safe working environment and employers should — and must — mandate health and safety regulations for the at-home work area. For example, company policies and procedures should be put in place to require a non-hazardous work area with safe equipment, unobstructed walk areas, proper heat and ventilation, with no pets or small children or family members, etc. Further, employers should police such areas by having the at-home employee take video of the work area showing compliance with the regulations.

Along with clocking in and out, these safety regulations will help limit the company’s liability for workplace injuries. Workers are entitled to workers compensation benefits if they are injured while working. These benefits apply to work-from-home employees, too, even if they trip over the family dog. Mandating a safe work area, mandating that the employee ONLY work in that area, and mandating that the worker clock in and out will limit the company’s financial risk from employee injuries.


Another unique aspect of having remote workers is a potential for increased reimbursements. Indeed, employers shifting to a work-from-home workforce should expect an increase in reimbursements. Many labor laws require that employers reimburse employees for various expenses that are necessitated by their employment. Possible required reimbursements for a work-from-home employee might include the following:

  • Cost of internet and phone and pro-rata cost of utilities
  • Reimbursement for space designated for an at-home work area — equivalent to rent
  • Cost for use of worker-owned furniture and equipment
  • Pro-rata share of hazard insurance costs
  • And more

If you need help with your company’s work-from-home policies and other labor law questions, contact the employment and business lawyers at Revision Legal at 231-714-0100.

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