With the normalization of remote work, hiring out-of-state employees has always been challenging.
Geographically diverse employees can bring many benefits to your company, from specialized skill sets to a broader reach for your business. It also, however, presents unique challenges for business owners to navigate. That’s because every state has different laws and regulations regarding hiring, taxes, payroll, benefits, and more.
In this guide, we’ll break down common compliance laws that vary from state to state. We’ll also explain how you can streamline compliance by partnering with BBSI.
Depending on your industry, there are many compelling reasons to search for employees who live beyond the borders of your state. Some of these reasons include:
As you can see, having an out-of-state remote work policy in place can open up many opportunities for your company. But, before you can enjoy these advantages, you must equip your business to operate legally in each state where you plan to hire.
Every state has unique nuances when it comes to hiring rules and regulations. Thus, you want to familiarize yourself with these laws before posting job listings for out-of-state positions. For instance, you may need to:
Since state laws differ in regard to these requirements, compliance can be complicated. That’s where BBSI can lend a helping hand — we can prepare your company to hire out-of-state workers so you’re in compliance from the get-go.
Even if you only do business in one state, taxes can be tedious and time-consuming. Add additional state taxes into the mix, and your compliance obligations can increase considerably.
For instance, some states require you to register for an income tax withholding account. Others may only necessitate that you set up a State Tax ID Number or sales tax license.
In addition to income taxes, every state has its own unemployment tax program, which can affect your business, employer, and employee contributions. Likewise, states can vary regarding their workers’ compensation tax rates and coverage.
After taxes, the next area to review is your hiring process. Job applications must comply with all relevant federal, state, and local laws. You must also follow each state’s law when it comes to:
Certain states may have rules regarding which job positions can use these screening tools, when to request them during the hiring process, and who must pay associated fees. Some states also have additional legal requirements for child labor, immigration, and public records.
If this sounds like a lot to keep up with, you don’t have to do it alone — BBSI can guide you through all the steps involved in hiring out-of-state workers. We can also carry out the detailed administrative work on your behalf.
Once you have out-of-state workers on your team, the next step is to ensure they’re paid properly. When it comes to out-of-state payroll, there are many factors to take into consideration, such as:
Put simply, payroll can get quite intricate when you adhere to multiple states’ laws and requirements. By outsourcing your payroll to an experienced Professional Employment Organization (PEO), like BBSI, you can simplify your company’s responsibilities and remove the confusion from compliance.
Standard employee benefits can be simpler than payroll. Your home state benefits broker can set up out-of-state employees’ standard health, dental, and vision benefits.
However, voluntary benefit plans, such as life insurance or pet insurance, must be handled by a benefits broker licensed in the state of the employee receiving the benefits. From there, be sure all state-specific employee benefits are mapped in your out-of-state remote work policy.
Some states may have specific rules for data security and communication. For example, you may need to create new hire reports and OSHA reports, depending on your industry. You may also need to follow certain guidelines when it comes to sharing workplace policies and rights with your employees.
After fortifying your legal compliance, you need to consider integrating your new out-of-state employees into your company culture. A strong onboarding structure can assist with this process. You also want to cultivate friendly connections among remote and in-office employees. Make sure your leaders keep remote workers in the loop and set up reliable communication channels.
By keeping the experience of your out-of-state employees top of mind, you can boost their job satisfaction and keep them at your company long-term.
As an employer, you already have a long list of compliance obligations to keep up with. As such, adding out-of-state hiring and employment law to your plate can sound overwhelming. Fortunately, you can reap the benefits of out-of-state employees without burdening your business. Simply outsource these tasks to BBSI.
Our payroll, workers’ compensation, benefits, and HR expertise have helped many companies embrace out-of-state hiring and employment. Whether you need help developing an out-of-state remote work policy or preparing your payroll system, we have reliable solutions at the ready.
Want to overcome your out-of-state hiring issues? Reach out to BBSI today.