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Labor Laws for Remote Employees: Everything You Need to Know

HR & Compliance

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Updated on:
March 22, 2024
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Updated on :

March 22, 2024
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Labor Laws for Remote Employees: Everything You Need to Know

All countries have specific labor laws for employees, whether permanent or temporary, depending on where they work, in the office or remotely. While employment laws for permanent, in-office employees are pretty straightforward, the ones for remote workers may vary. If you have employees working remotely, you may find labor law compliance a bit confusing. This article will familiarize you with labor laws for remote workers and how Skuad can help navigate them easily.

What are Labor Laws for Remote Employees?

Labor laws for remote workers outline the employer's security responsibility for their employees. Since working remotely typically involves working from a home office, these laws provide a specific framework to protect remote employees against discrimination or malpractices.

Labor laws play a crucial role in relieving this stress for employers by providing clear objectives for remote work arrangements. The following are goals outlined in labor and employment laws:

  • The employees' physical and mental health,
  • Equal pay and opportunities, 
  • Employee well-being and safety,
  • Diversity and inclusion at work.

It's crucial to remember that remote work regulations are determined by the state where employees are situated, irrespective of the company’s location. The employer may face legal repercussions if remote employee labor laws are violated.

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Key Labor Laws to Consider When Hiring Remote Employees

When hiring remote employees, knowing the key remote work laws is crucial. These laws ensure fairness and smooth operations when working remotely. This section explores some vital remote work laws by state, helping you build a successful remote workforce while staying compliant and informed.

Wage and Hour Laws

One of the most prominent labor or employment laws that govern minimum wages and hours is the FLSA (Fair Labor Standards Act). Under this category, various regulations dictate how employers handle compensation and working hours for non-exempt remote employees.

Minimum Wage Requirements

Employers must adhere to the state's minimum wage law applicable to the remote employee's location. In cases where federal, state, and local minimum wage differs, the highest amount must be paid to the employee.

Overtime Requirements

For non-exempt remote employees, employers must follow federal overtime compensation guidelines. This entails paying employees at least the minimum wage for the initial 40 hours worked during the week. Overtime mandates compensating employees at 1.5 times their regular rate for any hours exceeding the 40-hour mark.

Overtime pay = 1.5 X hourly rate.

It's important to note that employers are not required to remunerate unscheduled and unforeseen work hours they are unaware of, however, they should meet the minimum wage requirements.

Health and Safety Regulations

Although you may not be directly responsible for the security of your remote workers, your business is still expected to adhere to health and safety laws. Nowadays, health and safety norms have become more complex to ensure employees are not susceptible to potential threats within their homes. In order to mitigate risks, you still need to look into potential hazards at home offices.

Additionally, you must have a robust support system if someone has an injury or illness that prohibits them from working to comply with the Affordable Care Act (ACA). There are several healthcare-compliant software that help you understand and identify potential gaps in your compliance with the law, saving you from paying hefty fines for noncompliance.

Tax Compliance and State Tax Reciprocity

In the US, state and federal taxes are typically filed by employees. US employees pay taxes at the federal level based on where they actually work, not where their employers are based.

However, understanding state taxes requires more effort. For instance, a person living in Washington who works remotely for a company with headquarters in California is exempt from paying California state taxes. Remote workers, however, who travel to California and conduct business there might need to file a nonresident state tax return. 

Remote workers are exempt from filing nonresident state tax returns except when they physically move to another state and work there. A reciprocity agreement may, in some cases, exempt employees from paying taxes in multiple states. 

Physical presence while working continues to be the deciding factor for taxes US employees pay. Employers must fulfill their obligations to withhold state taxes from workers hired outside their states on a state-by-state basis.

Labor laws for remote employees

Anti-Discrimination and Equal Opportunity Laws

Remote workers are subject to the same discriminatory rules as on-site workers. Hence, employers need to consider equity before posting jobs and conducting interviews.

To ensure equitable pay, a few US states, including Washington, Nevada, Connecticut, California, Cincinnati, and Ohio, require businesses to disclose the wage range at the outset to prevent wage-related biases.

Moreover, employers must also be mindful of discrimination based on age, pregnancy, race, gender, handicap, nationality, and religion. During an interview, they must avoid bringing up any of these topics.

Employer Responsibilities for Disabilities

If there are any differently-abled employees, businesses must try to accommodate their needs. For the employee to fill the necessary position, you may have to make a few changes to the work environment.

Labor Laws for International Employees

Remote work has been a continuously expanding trend for many years with the development of technology. Therefore, international employee labor laws are vital for both employers and employees to ensure compliance and safety. Below are some of the most typical labor laws for international employees.

China's Labor Laws

There are only a few labor laws in China. As a result, hiring remote workers from the nation is relatively simple. The standards are adaptable, and taxes are entirely the responsibility of the employees. Per these regulations, employees should not work over eight hours each day or 40 hours per week, on average. However, workers must adhere to the employment procedure by submitting legitimate contracts to the government. 

UK’s Labor Laws for Remote Employees

UK labor laws for remote employees are complex. Employers must provide necessary equipment and support to ensure a safe and healthy work environment and comply with working hour regulations and statutory breaks. 

Data protection and confidentiality rules, as well as periodic risk assessment reviews, are also essential. Moreover, employers must offer suitable equipment and eye tests, maintain liability insurance coverage, and monitor remote employees' well-being in addition to the standard tax and law compliance requirements.

India Labor Laws

When it comes to contract workers in India, only a few of the labor regulations are relevant. But, it's important to remember that companies have to ensure workers are treated fairly and not unfairly because of their worker status. Moreover, the working day of an unskilled/ semi-skilled/ skilled adult worker should include a rest interval. It should be at most 12 hours in duration on any given day. This responsibility means that the company and the workers must follow the tax rules and make the necessary tax payments. It's like teamwork – everyone has a role in ensuring things are done right and fairly. 

US Employment Laws

To ensure compliance, employers must know remote employee labor rules when establishing a remote workforce. The Fair Labor Standards Act (FLSA) is the primary federal labor law in the US, with applicable state laws varying depending on where the employee is located. Remote workers must conform to the FLSA and any applicable state regulations while conducting business from anywhere in the US.

In some circumstances, dual compliance with local laws from the employee's place of employment and the state where the company is headquartered may be required.

See our comprehensive guide to find out more about employment and labor laws around the world. 

Stay Compliant with Skuad

Working with remote employees brings in a pool of diverse talent and compliance responsibilities. Without much experience and knowledge about all the legal requirements, it could be challenging to manage a remote team, especially with a global workforce. 

However, with Skuad as your Employer of Record (EOR) partner, you can compliantly hire, onboard, and compensate remote employees in over 160 countries using a unified platform. Additionally, Skuad ensures that your company is 100% compliant with all labor and employment laws in the country you hire from. Book a demo and get started with Skuad.


1. Does remote work affect rights to leave?

Working remotely doesn't necessarily change your rights to leave, but it's essential to understand how it might apply. Your leave rights are usually governed by employment laws and company policies, regardless of whether you work remotely or on-site. Make sure to review your employment contract and company policies to know how leave and remote work intersect. If you have specific concerns, it's advisable to consult your HR department.

2. What is the difference between exempt and nonexempt employees?

The main difference between exempt and non-exempt employees lies in overtime pay eligibility. Exempt employees are typically salaried and are exempt from receiving overtime pay. On the other hand, non-exempt employees are usually hourly workers entitled to overtime pay when they work more than a certain number of hours a week. Labor and employment laws guide this distinction and can also have implications for remote work. Knowing your classification and how it applies to your remote work arrangement is a good idea. HR can provide clarity based on your job role and responsibilities if uncertain.

About the author

Catalina Wang is a Human Resource Consultant. She manages recruitment, onboarding, and contract administration staffing for many organizations and remote teams. She’s passionate about efficient HR management and the impact of tech on hiring practices.

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