Remote work has skyrocketed in popularity over the past few years. Employers love the opportunity to retain their best employees and choose from a nationwide talent pool when hiring out of state employees in Ohio, while employees appreciate the convenience and flexibility involved.
Technology makes it easy to stay connected, but hiring employees in new states can create complex issues. If your company doesn’t already have an economic nexus in Ohio, hiring employees can cause legal issues. This opens employers up to liability, including fines. On the other hand, researching employment laws for each new state can be time-consuming, frustrating and expensive.
In response, SixFifty has developed robust multistate employer tools. Instead of racking up billable hours or burdening an in-house legal department, we’ve provided a simple guide to multistate employment. Now it’s easy to register your business, establish an economic nexus and comply with each state’s unique employment laws.
Here’s what it looks like to hire an out-of-state employee in Ohio.
Scenario 1: Employee works from home in another state
Employees are no longer tethered to their company’s physical location. Now they’re free to move out of state for a change of pace, to be closer to family or follow a partner’s new position. While that’s great news for anyone who wants to retain their top talent, now employers must comply with Ohio state laws—even if their company is headquartered in Alabama. Anyone living and working in Ohio is subject to their state protections.
Scenario 2: Hiring out-of-state employees in Ohio
Alternatively, an employer might decide to extend their hiring search nationwide. If you hire an employee living and working in Ohio, they will still be subject to Ohio’s employment laws. It’s the employer’s responsibility to ensure their company policies are compliant with each state-specific law. That can quickly become complicated, especially if you’re hiring in multiple states at the same time.
Multistate Employer Registration Factors to Consider
Whichever scenario applies to your hiring needs, you are required to register in each new state. Otherwise, your company could be held liable for failing to comply with state-specific employment laws. Because each state’s laws can vary dramatically, researching employment laws can be time-consuming.
SixFifty has identified five core areas of focus for out-of-state employers. To simplify the remote hiring process, our tools allow employers to create state-specific employment documents. Now even small businesses can afford to hire out-of-state employees.
1. Ohio Employment Registration
First, you must establish an economic nexus in Ohio. This includes obtaining a registered agent, registering with the state, reporting your new hire to the Department of Labor and reviewing or registering for unemployment insurance and workers’ compensation coverage. Employers have 20 days to do so.
- Obtain a registered agent
- Register to do business in Ohio
- Report new hire to the Ohio Directory of New Hires
- Register for unemployment insurance
- Report unemployment insurance account to payroll provider
- Obtain workers’ compensation coverage or update the policy
2. Ohio Tax Registration
Employers who hire Ohio residents are subject to Ohio state income tax withholding. You’ll need to register for an income tax withholding account, fill out and file the employee withholding form and register for a sales tax license or permit. Failure to do so could result in fines and penalties.
- 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. Ohio Required Employment Policies (April 2023)
Ohio has nine state-specific policies, which must be included in your employee handbook. Aside from the meal and rest break policy for minors, the remaining policies involve different types of leave. Employers must review their employee handbooks to ensure that their policies don’t conflict, and update or add new policies as required.
- Crime Victim Leave
- Jury Duty Leave
- Meal and Rest Breaks (minors only)
- Military Service Leave (50 Employees)
- Pregnancy Disability Leave (4 Employees) (Parental Leave)
- Volunteer Firefighter and EMT Leave
- Voting and Election Official Leave
- Whistleblower
- Witness Duty Leave
4. Ohio Employment Implications
Each state has different minimum wage, overtime and payroll practices. Employers should ensure that any non-compete provisions do not conflict with Ohio’s restrictions. They should also verify that their wages meet the $7.25 and $9.30 (for companies with gross receipts over $342,000) standards, and make adjustments as necessary.
- Ensure non-compete provisions comply with Ohio law
- Confirm the employee is paid at least the minimum wage
- Review the applicable overtime laws
- Confirm the payroll practices meet the payment frequency standards in Ohio
- Consider whether insurance extends coverage to employees in Ohio
- Consider COVID-19 laws that affect the employee
5. Ohio Signage
Finally, Ohio requires employers to post seven different types of employment signage. These cover issues like minor labor laws, smoking and workers’ compensation. While the state has not declared how to post signage for exclusively remote workers, generally, posting them on a website, company communication channels or in a web folder satisfies the requirement.
- 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 Ohio employment laws and standards. It’s why SixFifty has compiled an extremely useful tool for businesses hiring out-of-state employees in Ohio. To simplify the process of hiring out-of-state employees in Ohio or supporting remote employees on-the-move, check out our 50 State Hiring Kit.