Are employment laws for remote employees different?

Are Employment Laws for Remote Employees Different?

How does remote work legally impact you? Employment laws for remote employees can be complex, so it is important to know the details.

At Gardner Employment Law, we are experts on the evolving workplace, especially remote work. If you need legal advice on how working remotely might impact your career, let us know.

Are There Different Employment Laws for Remote Employees?

There is no specific rule regarding which state’s employment laws for remote employees apply. One of the most challenging issues facing courts today is determining which state’s laws apply, known as “choice of law” analysis. While the law where the employee works generally applies, this is not always the case. Courts conduct an analysis based on a list of different factors, such as:

  • where the contract was signed, if there is a contract;
  • where the negotiations took place;
  • how the work location relates to the work duties;
  • the domicile, residence, nationality, place of incorporation, and place of business of the parties;
  • which state has the greatest interest in the matter.

If remote employees do not perform the job activities specifically in his or her home location, it is more likely that the laws of the company’s home office will apply. It is important to know which law correctly applies since legal matters may involve both federal and state laws. In Texas and in many states, discrimination laws differ from federal laws pertaining to the same events.

There also are state and federal posting requirements that employers must follow mandating that companies post notice of employees’ rights at work. If you work remotely, your employer must find another way to notify you of these rights. Other laws of the state, rather than federal laws, control matters such as workers compensation and non-compete restrictions.

By contrast, the FLSA (Fair Labor Standards Act) governs meal breaks and your salary, although there is no Texas law that specifically applies to these two issues. If you plan to transition to the remote workforce, pay close attention to whether your salary changes after the remote assignment becomes effective. This could happen if you remain in Texas but your work activities occur in a state that regulates salary rates.

As the Harvard Business Review writes, many companies base salaries on the cost of living. If you transition to work from home in Texas but your activities occur in a state with a lower cost of living, your employer may decrease your salary. Negotiate with your employer on this matter in advance to maintain your current salary if it is higher than the salaries of employees located in the remote area.

How Does Remote Work Affect Non-Compete Restrictions?

As we discuss in “How is a Non-Compete Geographical Area Determined,” sometimes a court may rule that a non-compete restriction is “unreasonable.” This can occur if the geographical restriction involves multiple regions in which the employee had no involvement or responsibility. Remote workers often perform job duties that cross state lines or even throughout the United States. This can create a complex analysis for whether a geographical restriction is “reasonable” in a non-compete agreement.

One of our clients had signed a non-compete covering the Houston area, but she was offered another job that would require her to work in Houston performing work for customers on the East Coast. Her new work activities did not violate her non-compete agreement since the new activities would not occur in Houston, even though her working environment was in Houston. After explaining the non-compete analysis to the client, she felt confident in resigning from the Houston company and taking the new job to perform work remotely for customers on the East Coast. This demonstrates that even if a non-compete restricts you heavily in your hometown, you may still find work elsewhere without moving.

If you are a remote employee, make sure your non-compete is as specific in its wording as possible before you sign, including the geographical areas where you will perform your job duties. If you are unsure about any of the terms, consult an expert employment lawyer well-versed in non-compete agreements and employment laws for remote employees.

Does Remote Work Impact My Time Off?

Remote employees may not lose any time off work since there are federal laws on this subject. The federal employment law that allows employees to take a leave of absence is the FMLA (Family and Medical Leave Act). This federal statute permits unpaid leave for up to 12 work weeks for either (1) a serious illness suffered either by the employee or a family member that the employee cares for or (2) caring for a newborn or newly adopted baby.

Like most statutes, the FMLA contains eligibility requirements. An employee must work for a company with at least 50 employees or more and must work within a 75-mile radius of the company’s location. The employee also must work with the employer for 12 months before they are eligible.

While the 75-mile radius may seem to neglect remote workers, that is not so. The FMLA regulations provide that the term “worksite” means where the employee receives projects or reports progress, not the employee’s home residence. If the employee is a part of a workplace where 50 or more employees report to a single location and the employee receives assignments from a supervisor based at that location, then the employee is eligible for FMLA leave.

Some states have enacted leave laws that may include remote employees. Texas is not one of those states. In Texas, there is no law that requires private sector employers to provide unpaid or paid leave of any kind. However, employers may decide to provide paid leave as an incentive for company loyalty or performance.

Does Remote Work Cause a Worker to Become an Independent Contractor?

The sole factor of working remotely does not render you an independent contractor. Employees who work from home often have more independence than those who work at a certain location, which is characteristic of independent contractors. If your employer gives you more independence because you work remotely, this could cause confusion over whether you are properly classified as an employee or an independent contractor.

As we discuss in “Trump Era Independent Contractor Test Upheld by Texas Judge,” a worker will be classified as an employee “to the extent the worker is economically dependent on the employer.” This is known as the economic reality test. While remote employees may have a flexible schedule, this does not necessarily mean they are an independent contractor. If your only income is from your employer, and your employer controls your projects, schedule, and your freedom to work with other companies, then you are an employee.

It is crucial whether you know if you are an employee or independent contractor because there are different rights and rules for each. Independent contractors do not receive health insurance, unemployment benefits, 401k payments, equipment, and other benefits. Companies frequently pay independent contractors based on an hourly rate, so contractors must track their hours. By comparison, many employees work for a salary, and the company provides them employment benefits. These benefits could include reimbursement for computer equipment and internet usage while you work remotely. As in all employment positions, you need to be properly classified as an employee so that you do not lose economic benefits that you are entitled to receive.

Do Remote Employees Have Legal Claims for Discrimination or Harassment?

Yes, remote employees may experience discrimination or harassment for which the company is liable. The discrimination and harassment employment laws for remote employees remain the same. In other words, just because you work remotely, that does not alter your rights to be free of workplace discrimination or harassment.

We explained in Sexual Harassment and Discrimination that an employer can be liable for discriminatory or harassing conduct if the conduct is based on an employee’s protected class. The statutes list protected classes as race, religion, sex, national origin, age, disability, or genetic information. If another employee or supervisor discriminates against you or harasses you, even online, based on your race, religion, sex, or another protected class, you may have a legal claim against the company. Do not dismiss the possibility just because the behavior occurs online.

Be aware that if you believe that you are being discriminated against or harassed because of your race, sex, national origin, religion, disability, or age, you must follow the company’s policies to report the unwanted conduct. If the company has a harassment policy that requires an employee to report harassment to HR or to management, if you fail to make that report, the company is not responsible. You can read more about this in “How to Stop Being Harassed at Work.”

Have Questions About Employment Laws for Remote Employees?

As this article explains, remote work can complicate workplace problems. But as experts in employment law, we can help clarify any confusion. If you need guidance on how remote work legally impacts you, let us know. We’re here for you.

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