The shift in remote labor law
Remote work is no longer a perk; it is the standard for millions. State legislatures are currently rewriting labor codes that were originally designed for factory floors and cubicles. These new rules change how we define a workplace and who pays for the electricity used to power a home office.
We’re seeing a surge in states enacting specific legislation around remote work, addressing issues ranging from expense reimbursement to data security. This patchwork of laws creates a complicated situation for companies with employees in multiple states. Federal guidance remains surprisingly limited, leaving many questions unanswered and increasing the need for employers to proactively navigate this evolving landscape.
The speed of change is remarkable. Just a few years ago, most states hadn’t even considered the implications of a large-scale remote workforce. Now, legislatures are actively debating and passing laws designed to protect remote workers and clarify employer responsibilities. This includes everything from clarifying workers’ compensation eligibility to setting standards for remote work expenses.
The core issue is that traditional labor laws weren’t written with remote work in mind. Concepts like "workplace’ and ‘hours worked’ require re-evaluation when an employee"s office is their home. This has led to a flurry of legal challenges and a growing demand for clearer regulations. It's not simply about applying existing laws to a new context; it's often about creating entirely new legal frameworks.
Who pays for the home office?
Expense reimbursement for remote workers is arguably the most inconsistent area of remote work law currently. Some states are taking a very proactive approach, while others leave it largely up to employer discretion. This creates a significant compliance challenge for businesses operating across state lines.
California Labor Code Section 2802 requires employers to indemnify employees for all necessary expenditures. In practice, this means if you work from home in Los Angeles, your company must pay a reasonable percentage of your home internet and phone bills. Some recent court cases even suggest a portion of monthly rent is reimbursable if a dedicated home office is a job requirement.
Contrast this with states like Texas or Florida, where the law is less clear. In these states, employers generally have more leeway to determine whether or not to reimburse remote work expenses. While they can certainly choose to offer reimbursement as a benefit, they aren’t typically legally obligated to do so. This difference highlights the importance of understanding state-specific regulations.
Proving 'reasonable' expenses can also be a challenge. What constitutes a reasonable amount for internet access or home office setup? Courts are beginning to weigh in, but there’s still a lot of ambiguity. Employers should establish clear policies regarding expense reimbursement and require employees to submit detailed documentation to support their claims. Keeping good records is essential to avoid disputes.
Expense Reimbursement Guide
- California - Internet Reimbursement: Yes. Home Office Reimbursement: Yes (reasonable and necessary). Utilities Reimbursement: Yes (portion attributable to business use). California Labor Code Section 2802 requires employers to reimburse employees for all necessary expenditures or losses directly incurred by the employee in the discharge of their duties.
- Illinois - Internet Reimbursement: Partial. Home Office Reimbursement: No. Utilities Reimbursement: No. Illinois Department of Labor guidance states employers must reimburse for “business expenses,” but doesn’t mandate reimbursement for typical home office costs like internet unless specifically required by an employment agreement.
- Massachusetts - Internet Reimbursement: Yes. Home Office Reimbursement: No. Utilities Reimbursement: No. Massachusetts law generally requires reimbursement for work-related expenses, including a portion of internet costs if required for the job, but doesn’t extend to standard home office setup or utilities.
- Nevada - Internet Reimbursement: No. Home Office Reimbursement: No. Utilities Reimbursement: No. Nevada does not have specific laws requiring expense reimbursement for remote work. Reimbursement is at the discretion of the employer.
- New York - Internet Reimbursement: Partial. Home Office Reimbursement: Yes (reasonable and necessary). Utilities Reimbursement: Yes (reasonable and necessary). New York requires employers to reimburse employees for expenses necessary to fulfill their job duties, which can include internet, home office, and utility costs, but often requires documentation and justification.
- Texas - Internet Reimbursement: No. Home Office Reimbursement: No. Utilities Reimbursement: No. Texas law does not mandate expense reimbursement for remote work. Employers are not legally required to cover these costs.
- Washington - Internet Reimbursement: Yes. Home Office Reimbursement: Yes (reasonable and necessary). Utilities Reimbursement: Yes (portion attributable to business use). Washington state requires employers to reimburse employees for all necessary expenses incurred while performing their job, including remote work costs.
Tracking hours and the right to log off
Tracking work hours for remote employees presents unique challenges. The traditional notion of a "9-to-5" workday becomes blurred when employees are working from home, and ensuring proper compensation for all hours worked is a growing concern for states. Several states are now considering or have implemented laws requiring specific time-tracking methods for remote workers.
The push for stricter time-tracking regulations is often linked to concerns about wage theft and the difficulty of monitoring remote employees. Some laws require employers to use specific software to track hours worked, while others simply mandate that employers have a system in place to accurately record employee time. This adds another layer of complexity to managing a remote workforce.
The debate around "right to disconnect" laws is also relevant here. These laws, gaining traction in Europe and starting to appear in the US, aim to protect employees from being expected to be available 24/7. How these laws will apply to remote work, where the lines between work and personal life are already blurred, is still being debated. It's a real tension between employer needs and employee wellbeing.
"Digital presenteeism" – the expectation that remote workers be constantly available and responsive – is another emerging concern. Some states are beginning to address this issue by clarifying that employees are not required to respond to work-related communications outside of their regular working hours. This is a critical issue for maintaining a healthy work-life balance for remote employees.
- Set a written policy for when the workday starts and ends.
- Use approved time-tracking software.
- Stop expecting replies to emails sent after 6:00 PM.
- Monitor workload to prevent digital presenteeism.
Data Security & Remote Access
Remote work significantly expands the attack surface for data breaches. When employees are accessing sensitive company information from their homes, using potentially unsecured networks, the risk of a data security incident increases dramatically. States are responding by enacting laws to address these concerns.
Many states now require employers to implement specific data security measures for remote workers, including the use of secure networks, Virtual Private Networks (VPNs), and data encryption. These measures are designed to protect sensitive data from unauthorized access and cyber threats. Failing to comply with these requirements can result in significant penalties.
Employers also face potential liability if a remote worker’s home network is compromised, leading to a data breach. Courts are grappling with the extent of this liability, but it’s clear that employers have a responsibility to ensure that remote workers are following security protocols. This might involve providing security awareness training and conducting regular security audits.
Monitoring remote worker activity for security purposes is also a legal gray area. While employers have a legitimate need to protect their data, they must balance that need with employee privacy rights. Many states have laws regulating employee monitoring, and employers must ensure that their monitoring practices comply with these laws.
Workers' Compensation & Remote Injuries
Determining whether an injury sustained by a remote worker is "work-related" is a surprisingly complex issue. Unlike injuries that occur in a traditional workplace, it can be difficult to establish a causal link between work and injury when an employee is working from home. States are taking different approaches to resolving this challenge.
Some states have clarified that remote workers are eligible for workers’ compensation benefits, even if their injury occurs while performing non-work-related activities at home. Other states have taken a more restrictive approach, requiring a direct connection between the injury and the employee’s work duties. This inconsistency creates uncertainty for both employers and employees.
Ergonomic issues are a major concern for remote workers. Many remote workers lack proper ergonomic setups in their home offices, which can lead to musculoskeletal disorders. States are beginning to address this issue by providing guidance on ergonomic best practices and potentially requiring employers to provide ergonomic assessments for remote workers.
The possibility of employers requiring home office inspections is also being debated. While some employers may want to ensure that remote workers have a safe and ergonomic workspace, others are concerned about privacy issues. The legality of such inspections is likely to vary from state to state.
Tax Implications for Employers & Employees
Remote work can create significant tax complications, particularly when employees work across state lines. Determining which state’s income tax laws apply can be a complex issue, and employers must ensure they are complying with all applicable regulations. It's a frequent source of headaches for HR and finance departments.
State income tax withholding requirements for remote workers are often based on the employee’s physical work location. However, the rules can vary significantly from state to state. Some states require employers to withhold income tax for the state where the employee is physically working, while others require withholding based on the employee’s legal residence.
The concept of "nexus’ is also crucial here. Nexus refers to a legal connection between a business and a state that requires the business to register and pay taxes in that state. If an employer has remote workers in a state where they don"t have a physical presence, they may still be required to establish nexus and pay taxes in that state.
"Workday allocation" is a key factor in determining state tax liability. Employers need to accurately track the number of days each employee works in each state. This information is used to calculate the amount of state income tax that must be withheld and paid. Accurate record-keeping is essential to avoid penalties.
Has your company changed its remote work policy due to tax implications?
As state labor laws evolve for 2026, many employers are adjusting their remote work structures to comply with nexus and payroll tax requirements. Share how your workplace has responded.
Wisconsin's specific rules
Wisconsin provides a detailed framework for remote work, outlined in Chapter 748 of the Wisconsin Human Resources Handbook. This handbook offers guidance on various aspects of remote work, including records retention, employee eligibility, and administrative information.
According to the handbook, employers must ensure that remote workers have access to the same records and information as employees working in a traditional office setting. This includes maintaining accurate records of hours worked, pay stubs, and other employment-related documents. The handbook emphasizes the importance of secure data storage and access controls.
Chapter 748 also addresses employee eligibility for remote work, outlining criteria such as job function, performance, and technical capabilities. Employers are encouraged to develop clear policies regarding remote work eligibility and to communicate these policies to employees. It’s about setting expectations upfront.
Wisconsin’s approach is relatively comprehensive, aiming to provide clarity for both employers and employees. While not every state has such a detailed framework, it serves as a useful example of how these laws can be implemented in practice. It's a good starting point for understanding the considerations involved in managing a remote workforce.
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