Remote work has transformed the hiring landscape forever. Employers have the freedom to hire from a larger talent pool, while employees have the freedom to work from home or move out of state, whenever and wherever they are. It’s an ideal solution—except that when your business is hiring out of state employees in Virginia, employment laws and tax obligations can become complex.
As an employer, it’s your obligation to comply with Virginia’s state employment laws. If your company violates these laws, you could be exposed to fines and penalties. Staying on top of state employment laws and obligations is crucial, but that can become complicated when you hire multiple out of state employees.
SixFifty has developed employment solutions for multistate employers. Instead of spending your time doing the research, we’ve done it for you. Here’s what hiring out-of-state employees in Virginia could look like.
Scenario 1: Employee works from home in another state
Before technology made remote work possible, employees usually had to find a new job after moving out of state. Today, employers can keep their best workers, even when they move to a new location. However, you might not realize that the new state’s laws will govern that employee. Even if your company is based in Wyoming, Virginia’s laws and protections will apply to any employee living and working there.
Scenario 2: Hiring out-of-state employees in Virginia
Alternatively, your company might expand your talent search in other states. Just like the above scenario, all employees are protected by the laws in their state. When you hire a new out-of-state employee in Virginia, Virginia’s state laws will apply—even if you’re based elsewhere. It’s your responsibility to research and comply with all Virginia state laws, lest you expose the company to fines and penalties.
Multistate Employer Registration Factors to Consider
Multistate employers are obligated to comply with each new state’s employment laws, or risk getting penalized by government agencies. It is the employer’s responsibility to do the research and revise or update company policies as necessary.
This can be a time-consuming and complex task. SixFifty has developed a solution: our multistate employer tools identify five core areas of focus when onboarding new out-of-state hires. Here’s what the process looks like.
1. Virginia Employment Registration
Your first step is to establish an economic nexus in Virginia, which includes obtaining a registered agent and registering with the state. You’ll also need to report your new hire to the Department of Labor within 20 days, register for unemployment insurance and obtain or update your workers’ compensation coverage.
- Obtain a registered agent
- Register to do business in Virginia
- Report new hire to the Department of Labor
- Register for unemployment insurance
- Report unemployment insurance account to payroll provider
- Obtain workers’ compensation coverage or update the policy
2. Virginia Tax Registration
As a new Virginia employer, you now have tax obligations to the state—even if you’re headquartered elsewhere. Employers must register for income tax withholding account, fill out and file the employee tax forms and register for a sales tax license with the state.
- 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. Virginia Required Employment Policies (2024)
Virginia has five state-specific employment policies, which must be included in your employee handbook. Keep in mind that the meal and rest break policy only applies to minors, while the rest apply across the board. Employers should update and add policies as necessary.
- ADA Policy
- Crime Victim Leave
- Election Officer Leave
- Jury Duty Leave
- Meal and Rest Breaks (minors only)
- Organ and Bone Marrow Donation Leave (required for employers with 50+ employees, though it’s unclear whether that means total employees or just those in the state)
- Pay Transparency Policy
- Pregnancy Accommodations (ADA Policy)
- Social Security Number Privacy (Social Security Policy)
- Witness Duty and Court Attendance Leave
4. Virginia Employment Implications
Next, you’ll need to consider Virginia’s employment implications: confirm that your non-compete provisions are compliant, that the wage, overtime and payroll policies work with Virginia’s laws and consider your insurance coverage. You may also need to consider any COVID-19 laws that apply to your employee.
- Ensure non-compete provisions comply with Virginia 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 Virginia
- Consider whether insurance extends coverage to employees in Virginia
- Consider COVID-19 laws that affect the employee
5. Virginia Signage
Finally, Virginia has eight different types of signage that employers must post or distribute. While the state hasn’t decreed how to do this for exclusively remote employees, generally, federal guidelines allow for uploading the signs on a website, in an easily accessible web folder or on company intranet.
- 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 Virginia employment laws and standards. It’s why SixFifty has compiled an extremely useful tool for businesses hiring out-of-state employees in Virginia. To simplify the process of hiring out-of-state employees in Virginia or supporting remote employees on-the-move, check out our 50 State Hiring Kit.