Of the many things Covid-19 can be said to have forced us to change in our daily lives, how and where we work is one of them. For employers, the ongoing pandemic has seen an increase in leveraging remote employees.
An increasing number of employees are work from home, and sometimes that home is out of state. Employers with remote employees in other states find themselves beholden to varying regulatory requirements for employees. This blog post is meant to give employers an overview of ensuring compliance with states where remote employees are located. This blog is meant only as an introduction, and in no way constitutes legal advice. Below are resources aimed at employers in the Pacific Northwest.
Steps for Compliance
Generally, compliance for remote employees takes two steps: first, you must register your business in the state the employee is located; second, you must register with that state’s tax authority.
As a preliminary issue, most U.S. jurisdictions only require an employer to register as a foreign entity if that company is “doing business” in that state. While not every business interaction with a state will count as “doing business”, it is safe to assume that having an employee in state will count. Check each state’s statute to determine if your business qualifies as “doing business.”
First, though registration requirements vary state-to-state, you will need to submit the appropriate form and pay a fee to register your business.
- Oregon: Application for Authority for Foreign Business Entities (paper only)
- Idaho: Foreign Registration Statement
- California: Statement and Designation by Foreign Corporation
Registering a foreign entity can mostly be done online and requires including the certification document issued to your business by your home state, along with identifying information for your business (address, officers, registered agent, etc.). All states require a business to have a Registered Agent with a physical address in-state where to receive service process. If your business does not have someone in-state to accept the responsibility, Northwest Registered Agent, along with a myriad of companies, offer in-state addresses in every U.S. jurisdiction. Registration, especially by mail, can sometimes take up to a few weeks. Planning and registering ahead of time is critical.
Second, employers must register their business with each state’s individual tax authority. Submitting your information to these agencies will be for state taxes, workers comp, etc.
- Oregon: Revenue Online
- Idaho: State Tax Commission
- California: Employment Development Department
Note: California worker’s comp must be obtained outside of the state.
Each state’s requirements for registering with tax entities are beyond the scope of this blog post. To avoid confusion and ensure compliance, it is recommended to contact each state’s tax entity.
The above article is for general information purposes only and should not be relied upon as specific legal advice. This article, or contacting Apex, does not in any way form an attorney-client relationship. If you have any questions or would like to learn more, please contact Coleman Scroggins at firstname.lastname@example.org.