It often seems like we live in the future now: thanks to the COVID-19 pandemic and robust digital technology, we can work “face to face” from virtually anywhere in the world. American employers now have the luxury of hiring out-of-state employees, from Hawaii to Maine.

The only problem is complying with multiple states’ employment laws. Researching, understanding and creating state-specific employment documents is time-consuming and costly. Whether you’re accruing billable hours with your attorney or assigning the work to your legal department, the time and money add up fast. You might even assume that it’s not worth it—especially if you’re a small business.

Here’s the good news: SixFifty makes it simple, quick and affordable to work with employees in any state. Instead of spending money on lawyers or taking away your legal department’s attention from more pressing matters, you can generate the customized employment documents you need in just a few clicks.

Out-of-state employee implications

When you’re hiring someone who lives out of state, you are obligated to comply with the state employment laws where your new employee works. For instance, if you’re a company based in Ohio that hires a developer in California, your new employee is protected by California’s employment laws.

Here are some of the implications that come with out-of-state employees:

  • Benefit requirements: Leave, unemployment insurance, healthcare and other benefits can vary from state to state. Some states may have stricter standards than in your normal place of business, while others may be more lax.
  • Discrimination laws: Federal anti-discrimination and sexual harassment laws apply to all 50 states—but states are also entitled to make their own versions, as long as they don’t frustrate the purpose of the federal law. They may also create their own employment laws. These laws may add more protections for workers.
  • Payroll processing: The intricacies of payroll processing—recordkeeping, withholding and taxation—can vary from state to state. You’ll need to know what’s required in each place your employees reside.
  • Wage and hour laws: State laws regarding wages, working hours, breaks and more can vary dramatically. For example, some states don’t have any rules for meal breaks, while others’ rules only apply to minors. Your responsibility is to know the rules of each state and adjust the policies accordingly.

Pros and cons of hiring out-of-state employees

There are plenty of pros and cons to hiring out of state. Here’s what you’ll need to consider:

  • Employment law compliance: This, of course, is the biggest hurdle: complying with state laws in all 50 states is an onerous task. It’s not just that all 50 states have varying employment laws, but specific cities and counties may have local employment laws, too. Every time you hire a new out-of-state employee in a new state, you have to research the employment laws that apply to them, determine how they differ from the laws in your own state and make a plan to handle compliance. You also need to report each new hire to their states’ appropriate agencies.
  • Maintaining communication: A lot of employers are concerned that they may not be able to maintain communication or monitor work product remotely. Thanks to today’s technology, we can hop on a video conference call at the touch of a button. With video chat, phones, in-house chat channels, collaborative documents and more, it’s easier to keep in touch with your employees no matter where they are, and what time zone they’re in.
  • Hiring and retaining top talent: Of course, the biggest benefit to hiring out of state is that your employee candidate pool just got exponentially bigger. When employees no longer have to move for their job, they’re a lot more likely to work with businesses in remote areas or places with a high cost of living.
  • Boosting productivity: The vast majority of workers feel that they’re just as productive at home, and 30 percent believe they’re more productive. Many work more hours, since they’re spending less time commuting, and flexible schedules are a smart way to help your team improve their work/life balance.

How to stay compliant when hiring out-of-state employees

If you’re considering hiring out-of-state employees, SixFifty has solutions. Our employment tools can produce state-specific employment offers and agreements, employee handbooks and more. All you need to do is answer a few questions about your company. We’ll do the heavy lifting for you—we’ve already researched employment law in all 50 states, so you and your legal team don’t have to.

Once you’ve downloaded the customized, automatically generated documents, have your lawyers review and approve. That’s all it takes to get started in a brand-new state—all for a lot less time, money and stress than other methods require.

Best of all, we update all of our customizable documents on a monthly basis, so you’re never caught out of compliance.

If you have questions or want to see how it works, schedule a demo today!


Meili Bell

Written by Meili Bell

Meili Bell is the Content Manager at SixFifty. She spends her workdays writing, editing, project managing and reading about the intersection of law and technology. Meili comes to SixFifty from Gifted Music School, a nonprofit music school for the most dedicated young musicians in the region, where she was program director of the school’s flagship program for the last ten...

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