Labor Law Compliance For Remote Workers: What Businesses Need to Know

Now nearly two years removed from the COVID-19 pandemic, the shift to remote work has officially transformed from a necessary measure to a workplace common practice. While largely celebrated by employees, and even some employers, virtual workplaces pose challenges for traditional businesses. At the top the list is adjustments in labor law compliance.

Although workers are not technically in the physical workplace, US labor laws establish clear rules and regulations that every business must comply with. An inability to comply with local, state, and federal employment laws could result in financial and legal penalties.

This article will explore common US labor laws and how they relate to the growing remote workforce. Additionally, this article will share three key ways to achieve labor law compliance.

Common US Labor Laws and Policies

US labor laws and policies are government regulations designed to ensure the financial safety and personal protection of laborers. Dictated by bills such as the Fair Labor Standards Act, “FLSA,” and enforced by local, state, and federal government bodies, labor laws require compliance under threat of fines and legal action. 

It is important for every business, including self-owned ones, to adhere to all regulations.

The list of labor laws is excessive, as rules differ on the local, state, and federal level. Still, there are a common set of policies that every employer can expect. These common US labor laws include:

Verifying Employee Eligibility

For every employee, federal laws made that employers must verify their employee’s eligibility to work within the United States. An I-9 federal form is used to verify the identity and authorization of new hires; the document lists acceptable forms of identification in order to confirm identity and eligibility. 

Employers are required to have the I-9 form completed on or before a new employee’s first day of work. To maintain compliance, these forms must be stored for by the employer three years after the hiring date or one year after the end of employment.

Under the federal electronic verification (E-Verify) program, employees can use an 'electronic I-9' to confirm their eligibility to work by inputting information from their Form I-9 into a secure website. Employers of remote US workers are able to use this program to verify eligibility remotely.

Payroll, Wage, and Hourly Work Law

Introduced in 1938 under President Roosevelt, the Fair Labor Standards Act set clearly defined regulations for employers regarding payroll, wage, and hourly work. Set at the federal level, with additional laws on the state and local level, these policies are designed to protect workers.

Payroll, wage, and hourly work laws can vary depending on an employee’s location. For remote workers, employers will need to make sure they adhere to all appropriate local, state, and federal guidelines. This includes:

• Minimum wage
• Payroll tax and other tax requirements such as income tax
• Payday frequency
• Expense Reimbursement
• Overtime 
• Delivery of paycheck
• Child Labor Standards

Workers’ Compensation Policy

Enforced by the Department of Labor, employers are required to submit for workers’ compensation insurance within the employee’s workplace. Compensation insurance covers both laborers and employers in the event of illness, accident, or death. Policies may differ depending on the state.

Because the policy dictates that insurance must be within the employee’s workplace, and not the employer, businesses must have workers’ compensation insurance for remote workers. For each remote worker, managers must ensure they are adhering to all state and local laws relative to the employee’s location.

Federal Labor Law Posters

Established and enforced by the Occupational Safety and Health Administration (OHSA), Federal Labor Law Posters must be printed and displayed in the workplace, regardless of whether or not there are physical employees on location. These posters provide employees with information about their freedoms, rights, and expectations as authorized workers in the United States. This includes for remote workers and their respective workplaces.

In order to meet the Labor Law Poster requirements for remote workers, employees must digitally distribute the appropriate paperwork. Typically these digital posters are made available within company platforms and employee handbooks.

Inability to properly display Labor Law Posters could result in disciplinary action from the U.S Department of Labor.

Keys to Achieving Compliance

With an exhaustive list of policies and laws, which only grow larger with the introduction of remote employees, labor law compliance can be a daunting task. The three main keys to successfully meeting all local, state, and federal policies are:

Design Procedures and Policies for Remote Work

Employers are recommended to design a specific set of policies and procedures for remote work in order to confidently achieve labor law compliance. Doing so will ensure a consistent understanding of expectations and responsibilities between employers and employees. These policies should be consistent with existing payroll, wage, and hourly work laws.

Considerations for these policies include:

• What tasks are allowed to be completed remotely?
• How will work be coordinated between team members?
• What tools and communication methods will be used?
• How often should remote workers check in with their supervisor?

By setting policies in line with local, state, and federal labor regulations, your company can confidently establish guidelines that ensure labor laws compliance.

Appropriate Security Procedures

Due to the nature of digital work, remote employees are especially vulnerable to cyberattacks and data leaks. In order to protect the information of employees and the company, your business should enact security measures such as:

• Establishing a virtual private network
• Implementing strong passwords and authentication protocols
• Using antivirus software and firewalls
• Issuing company-approved equipment
• Data encryption

By ensuring cybersecurity for both employees and the company, your business can remain safe and labor compliant. There is no single data protection law in the United States. 

Keep Payroll Up-To-Date

Of all other measures that can help achieve labor law compliance, none is as important as keeping a business’s payroll up to date. 

By appropriately tracking hours worked, overtime, and other related information, employers can ensure they are remaining compliant with all wage and hourly labor laws. Having updated employee information, like location and authorization, helps achieve compliance as well. More than anything, having an updated payroll prevents negligent policies and actions.

In order to track time and ensure accurate reporting, your business will need a system in place for all related payroll information. CAVU HCM is a premium software solution that enables companies to hire talent, manage payroll, and stay labor law compliant. With a dedicated team and library of resources, CAVU HCM is the perfect partner for every business – including those with remote employees.

Conclusion

Compliance with local, state, and federal labor laws is an essential part of growing a successful business. An inability to adhere to any guideline can result in penalties as little as fines or as big as criminal trials. While workplaces have shifted away from the traditional office workplace, labor law compliance is still essential for remote workers.

While the list of local, state, and federal labor laws is extensive and ever changing, a few are common for every business. Employers are expected to adhere to all wage and hourly laws, including overtime and minimum pay. They are also expected to confirm their employee’s identity and offer remote workers compensation in the case of an incident. Especially critical for employers to remember, labor law posters must be available digitally for all remote workers.

There is no “best way” to stay compliant with remote workers, but there are a few best practices. Establishing clear procedures and policies for remote workers ensures clear guidelines and expectations in the workplace; these policies should be made keeping each employee’s local and state regulations in mind. Along with clear policies, companies should enact security procedures to keep company and employee data safe.

Above all else, the best way to ensure compliance is to use an efficient payroll system. Learn more about how CAVU HCM can help you manage your payroll and stay labor compliant here.

Frequently Asked Questions

What do labor laws regulate?

Labor laws regulate US-based businesses to ensure that employees are protected financially and physically. These policies protect both salaried and hourly employees, as well as monitor overtime and medical leave. There is not one single government agency that oversees federal and state labor laws, as they can differ depending on location.

What happens if a company violates labor laws?

Consequences for failing to comply with local, state, and federal labor laws vary. Factors like the type of violation, its frequency, and its damage contribute to the penalties a company will receive.

To avoid violations, companies are recommended to keep their payrolls updated and establish guidelines consistent with relevant labor laws.