Remote work is here to stay, and that’s a good thing for many businesses and their employees. There are numerous benefits that accompany a decentralized workforce; however, there are also some challenges—particularly when it comes to hiring out of state employees in Arizona. While the talent pool is broader, so are the regulatory and compliance considerations businesses need to account for. The more states you employ people in, the more policies and protocols you need to familiarize yourself with.
When it comes to hiring out-of-state employees in Arizona for instance, companies need to understand the state’s policies before they onboard talent. Moreover, it’s important to establish a business nexus if current employees decide to relocate to the Grand Canyon State. Yet, many businesses aren’t quite sure what, exactly, this entails.
SixFifty has put together a robust hiring guide to help companies simplify multistate employer registration. Here’s a look at what you need to consider when hiring in Arizona, and how our tool takes the administrative burden out of hiring employees in any state.
Scenario 1: Employee works from home in another state
The first and most common compliance situation employers find themselves in when it comes to state-level hiring compliance occurs when current employees choose to work from home in Arizona. They might pick up stakes and move to be closer to family or just for a change of scenery. No matter the reason, as soon as they become an Arizona resident, the organization needs to become compliant with Arizona’s employment compliance standards. It’s a seemingly innocuous situation that could become complex if not handled quickly.
Scenario 2: Hiring out-of-state employees in Arizona
The other scenario many businesses will run into involves hiring out-of-state employees in Arizona. For instance, your organization may operate out of California; however, to hire workers from Arizona, you’ll need to establish a business nexus in the state. Arizona’s employer registration standards differ from California’s, so there’s significant oversight required to ensure the business and the new employee meet the state’s criteria. Without a guide to navigating state-level differences, employers risk non-compliance.
Multistate Employer Registration Factors to Consider
In both of the above scenarios, employers need to pursue multistate compliance or risk being held accountable by the Department of Labor for failing to comply with state-specific employment standards. Compliance differs across all 50 states. To simplify the process, SixFifty has narrowed down multistate employer registration considerations to five core areas of focus.
Here’s what it looks like for companies hiring out-of-state-employees in Arizona—or accommodating employees moving to Arizona if there’s no established business nexus.
1. Arizona Employment Registration
Any organization doing business in Arizona needs to register with the state. From there, any new hire needs to be reported to the state’s New Hire Reporting Center. There’s also unemployment insurance to consider, as well as workers’ compensation coverage. This all needs to happen in a timely manner, to ensure you’re operating within compliance standards—and that your employees are registered accordingly.
- Obtain a registered agent
- Register to do business in Arizona
- Report new hire to the Arizona New Hire Reporting Center
- Register for unemployment insurance
- Report unemployment insurance account to payroll provider
- Obtain workers’ compensation coverage or update the policy
2. Arizona Tax Registration
State tax considerations are a crucial step in establishing your business’ economic nexus in Arizona. That means registering for an income tax withholding account and ensuring your employees complete their tax withholding form. There’s also sales tax to consider, and businesses need to register for a license or permit where applicable.
- Register for income tax withholding account
- Obtain the completed state income tax withholding form from the employee
- Register for a sales tax license or permit
3. Arizona Employment Policies
From sick leave to maternity leave, jury duty leave to paid time off, employers need a keen understanding of Arizona’s employment policies. Moreover, these policies need to be clearly stated as part of the employee handbook. Employers also need to take the time to add or update policies relevant to state-specific employment standards.
- Review employee handbook for compliance
- Update policies or add new leave policies as needed
4. Arizona Required Employment Policies (2024)
- Crime Victim Leave (50 Employees)
The law is unclear about whether this threshold is meant to include all employees or just those in the state. - Immigration law Compliance
- Jury Duty Leave
- Paid Sick Leave
- Voting Leave
5. Arizona Employment Implications
Planning on having employees sign a non-disclosure or a non-compete agreement? Do you know Arizona’s minimum wage and overtime laws? What type of insurance do you need for your employees? These questions and more are all employment implications worth investigating as you seek multistate employer compliance specific to Arizona.
- Ensure that non-compete provisions comply with Arizona law
- Confirm that the employee is paid at least the minimum wage
- Review the applicable overtime laws
- Confirm that the payroll practices meet the payment frequency standards in Arizona
- Consider whether insurance extends coverage to employees in Arizona
- Consider COVID-19 laws that affect the employee
6. Arizona Signage
Arizona requires a slew of workplace signage; however, it’s not always clear how that signage should be displayed in a remote work environment. When it comes to staying compliant, employers need to understand which signage is required and how to make it accessible to employees.
- Post or distribute required signage
Simplify Multistate Compliance with SixFifty
The process of maintaining compliance can be complex and extremely nuanced for companies unfamiliar with Arizona employment laws and standards. It’s why SixFifty has compiled an extremely useful tool for businesses hiring out-of-state employees in Arizona. To simplify the process of hiring out-of-state employees in Arizona or supporting remote employees on-the-move, check out our 50 State Hiring Kit.
