Page 10 - Flip

Feature
The COVID Compliance “Pass” is Ending
We Need to Talk about Compliance in the Age of Remote Workforces and Digital Nomads
For years, employees have expressed the desire for increased flexibility to work-from-home. But businesses have been slow to adapt and have continued to embrace in-person workspaces. Then, COVID came along, and almost overnight businesses were forced to transition to a remote or partially remote workforce. Even more traditional institutions, such as the court system, were also forced to adapt to remote options.
Conference call fatigue aside, employees — especially millen- nials and Gen Z — cherished the flexibility provided by remote work options. As a result, employers began offering part-time and full-time work arrangements as an employee benefit and recruiting tool. This has led to the rise of “digital nomads,” who can work from anywhere and who travel frequently. While this can be a wonderful benefit, it can also cause employers to unknowingly walk into a compliance minefield.
Due to remote work arrangements, employees can work in a locality, state, or country other than the brick-and-mortar busi- ness location. This is especially true in our tristate area, where it is common to work in downtown Cincinnati but live in Northern Kentucky or Southern Indiana. In some extreme cases, employees can move out of state or even out of the country without the employer ever realizing. Many businesses have reported they tried to recall employees back to the office, only to discover an employee had moved from Ohio to California or Costa Rica.
This is incredibly problematic for companies that do not currently operate in those new jurisdictions. Laws vary signifi- cantly across jurisdictions, and employers may become unexpectedly subjected to different or new compliance obli- gations. Businesses must rely on their legal counsel to provide guidance for navigating this potential minefield.
By Hayley Geiler and Katie Jacob
Businesses with employees working remotely, including attorneys, should immediately take the following steps and deter- mine: (1) Whether employees are engaging in remote work; (2) the frequency of employees engaging in remote work; (3) where employees are working remotely; (4) if their employees’ remote work arrangements trigger new or differing compliance require- ments; and (5) whether they will continue to permit remote work — and, if so, identify the steps they need to take to become compliant.
Areas of compliance businesses should review include:
Business Registration, Licensing and Permits
Operating a business in a new country, state, county, or city is not as simple as setting up shop. Most states require businesses who “conduct business” or “transact business” to register with the Secretary of State. Under some states’ tests, employees conducting business remotely may trigger these responsibilities.
Additionally, if employees are operating in a new location, the employer may need to comply with state and local business registration, licensing, and permit requirements. This is espe- cially true for employers who hold professional licenses or whose employees hold specialized licenses or permits. Examples include accounting, architecture, engineering, or law firms; educational institutions; healthcare facilities; construction or home improve- ment contractors; and financial institutions. Attorney licensure to practice law is state-specific and practicing out-of-state may trigger ethical violations. Employers should conduct a thorough review of registration, licensing, and permit requirements to ensure compliance.
10 l September/October 2021 CBA REPORT
www.CincyBar.org