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Immigration:
Employers who sponsor employ- ment visas for foreign nationals must be cautious of the jurisdictional limitations of the work authorization. Employees’ visas may prohibit or limit the ability of the employee to work remotely based on the terms of the employment agreement, loca- tion of work, and visa category. Generally, employees with H-1B visas are restricted to working only in locations listed in the H-1B sponsorship petition. If employees are working outside those areas, the employer will need to file an amendment notifying the government about any new worksites and/or home offices. This could expose the employer to higher prevailing wages if salaries in the new location(s) are higher than the employer is currently paying. If the employee is working outside the scope of work authorization, it may jeopardize the employee’s visa and may result in non-compliance with immigra- tion laws. Companies should conduct a case-by-case analysis of each worker’s ability to work remotely and where they are permitted to work.
Workers’ Compensation and Unemployment:
Generally, states require employers to register and obtain workers’ compensation insurance in the state where employees are primarily performing work. In Ohio, even self-insured employers must comply with workers’ compensation registration requirements. Likewise, in most states, employers must register for and pay the unemployment insurance premiums in the states where employees are performing work. In the case of remote workers, this may be a different state altogether. Employers who fail to comply with workers’ compensation insurance and unemployment insurance requirements in those states may be exposed to liability.
Benefits and Insurance:
Similarly, employee benefit plans and business insurance plans are often state-specific contracts. If employees are working out of state, they may not be entitled to benefits under the plan and the business itself may not have liability
coverage for any loss or accidents resulting during out-of-state work. Employers should review contracts to ensure they have coverage for employees who are working remotely out-of-state.
Taxes:
As we all know, taxes are inevitable, and tax obligations vary based on country, state, and locality. Businesses should be cognizant of their own tax liability if “operating” in a new locality, including income taxes, gross receipts, and sales taxes.
Moreover, employers should calculate their employees’ taxes at the correct rate and deduct any required sums. Employees working in a different jurisdiction may be subject to different income tax rates, and mandatory withholdings may need to be adjusted, including wage garnishments. In certain jurisdictions, additional deduc- tions from employees’ paychecks may be required to endow state unemployment, disability, or paid family leave funds. Employers are responsible for notifying employees of deductions and ensuring the appropriate amounts are withheld.
Privacy and Security Requirements:
If proper procedures are not followed, remote workers can inadvertently under- mine security protocols, leaving the employer’s network vulnerable to secu- rity breaches. Common cybersecurity risks include inadvertent disclosures, utilizing unsecure networks or internet connections, and business email compro- mise. Businesses should develop remote work and security policies to ensure that employees understand and follow neces- sary security protocols while working remotely. Additionally, businesses should familiarize themselves with state data breach notification laws in case of a poten- tial breach.
Business should also be aware that intrastate and international access to data may implicate foreign and domestic data privacy and security laws, such as Euro- pean Union General Data Protection Regulation (GDPR) and the California Consumer Privacy Act (CCPA).
Other Employment Law Compliance Topics:
Various other employment laws may be implicated if any employee begins working in a new jurisdiction, such as laws regarding minimum wage, overtime, meal and rest breaks, reimbursement of expenses, leave requirements, paid sick leave, paid family leave, employee benefits, protected statuses, occupational health and safety requirements, and duties to provide employees with notices of bene- fits or protection. After an employer identifies an employee working in a new jurisdiction, they should engage in a thor- ough review of the relevant law to ensure compliance.
Jacob is a Partner in Dinsmore & Shohl’s Immigration group. Jacob advises clients on complex matters
of immigration law and compliance. Geiler is an Associate in Dinsmore & Shohl’s Labor & Employment group. In addition to her employment practice, Geiler is a member of Dinsmore’s COVID-19 Task Force.
Ethical Quandary?
The CBA is proud to offer ethical guidance to Greater Cincinnati attorneys through our Ethics Committee's hotline.
September
Gregory S. French 641-4692 George J. Zamary 448-4150
October
William B. Strubbe 621-4775 Noel Morgan 631-7289
The members of the CBA Ethics & Professional
Responsibility Committee listed above are available to help you interpret your obligations under the Ohio Rules of Professional Conduct. Questions posed should be framed hypothetically and should relate to your own prospective conduct. The committee also accepts requests for written opinions.
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CBA REPORT | September/October l 11