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With all of the challenges 2020 has seen so far, the post-COVID pandemic world will likely see a major shift toward companies maintaining remote workforces. Due to government-mandated business closures and stay-home orders, child-care challenges, and the need to self-quarantine after coming into contact with a COVID-positive person, many owners and employees of small businesses have been forced to work virtually. An unexpected outcome of these difficult circumstances is that many employers have also seen the benefits of work-from-home flexibility. Beyond creating opportunities for employees to have more balanced work-home life, studies also show that remote working can increase productivity. As a result, several large technology companies and financial firms have announced that they will be implementing remote working until at least late in the year. Some companies have even gone as far as to give employees the option of working from home permanently. The “new normal” that many predict involves more companies maintaining a remote workforce.
As a business owner, you may be exploring the idea of permanently utilizing a remote workforce. However, you may not be aware of all of the relevant factors to consider and preparations to implement. Be sure to take the following often-overlooked measures as you move toward permanent virtual employment to help your business thrive through the transition.
- Increase security measures for information stored in the cloud. As your company begins functioning in a paperless world, you must take appropriate steps to ensure data shared over digital cloud networks are secure. One way to increase security is to provide the specific tools employees will use in completing their tasks. For example, establish a policy allowing only company-issued phones and laptops to be used when handling work business. In complying with these measures, keep your team accountable by
- restricting the reception and transmission of company emails;
- requiring the use of secure passwords—passwords comprised of many characters, including symbols and numbers;
- providing guidelines regarding proper social media usage; and
- providing access to encrypted wireless networks.
By taking these additional precautions, a company addresses confidentiality concerns and further protects itself and its customers or clients from potential data breaches.
- Comply with federal and state wage laws. For business owners, understanding labor rules and laws that apply to specific situations is key for the successful implementation and continuation of a remote workforce. It is important to keep in mind that federal legislation requires employers to pay nonexempt workers for any work over forty hours in a single workweek. This is especially challenging for individuals classified as part-time workers, because tracking their time at home could be difficult and could result in a nonexempt worker exceeding the forty-hour cap. As a result, when working with a remote workforce, it is critical to create systems and structures that enable employees to indicate and record their start and end times. Additionally, most states have minimum wage requirements, with some exceeding the federal minimum wage of $7.25 per hour. If you have an employee who resides in a state whose minimum wage differs from the federal minimum wage, you are required to pay the higher of the two.
- Pay applicable taxes. For employers with remote employees in more than one state, payment of state taxes is a key requirement. Typically, if you and your employees are in one state, you are only responsible for paying taxes in that state. However, this rule changes if your business has a nexus to another state as determined by that state’s law. The presence of an employee in a state usually constitutes sufficient evidence of such a nexus. In these instances, you are required to pay taxes in that state.
We Can Help
Littleton Legal PLLC’s experienced business law attorneys are dedicated to helping you adjust and thrive in the post-COVID-19 world. If you have any questions about developing your remote work employee policy, do not hesitate to call our office (918) 608-1836. We are happy to meet with you by phone or video conference during this time of social distancing.
 Scott Mautz, A 2-Year Stanford Study Shows the Astonishing Productivity Boost of Working From Home, INC. (Apr. 2, 2018), https://www.inc.com/scott-mautz/a-2-year-stanford-study-shows-astonishing-productivity-boost-of-working-from-home.html.
2 Angus Loten, For Many, Remote Work Is Becoming Permanent in Wake of Coronavirus, Wall Street Journal (May 21, 2020), https://www.wsj.com/articles/for-many-remote-work-is-becoming-permanent-in-wake-of-coronavirus-11590100453.