The 2021 American Community Survey (ACS) from the United States Census Bureau showed the number of people primarily working from home tripled from 5.7 percent (roughly 9 million people) to 17.9 percent (27.6 million people) between 2019 and 2021. The 48.3 percent of workers in the District of Columbia working from home was the highest percentage of home-based workers among states in 2021, with the highest percentage of home-based workers being Washington (24.2 percent), Maryland (24.0 percent), Colorado (23.7 percent) and Massachusetts (23.7 percent).

The Census also reported that 15 million fewer people were commuting alone in private vehicles to work in 2021, and the 2.5 percent of people using public transportation in 2021 was the lowest percentage of workers commuting by public transportation ever recorded by the ACS. Working from home is only becoming more common, so it is important to understand how employee rights work in these scenarios.

Classifying Employees

The California Chamber of Commerce offers a good overview of the distinction between exempt and nonexempt employees on its website. As the Chamber notes, an exempt employee must satisfy the strict duties test, under which more than 50 percent of a person’s time is spent performing job duties.

Exempt employees in California usually earn a minimum monthly salary of no less than two times the state minimum wage for full time employment, but paying a salary alone does not make an employee exempt or change any requirements for compliance with wage and hour laws. Common exemptions for California employees in these cases include the executive exemption, administrative exemption, professional employee exemption, computer professional exemption, salesperson exemption, and artist exemption.

Managing a California Remote Work Policy

Remote employees will be subject to the employment laws of the state and locality in which they are physically present and working, meaning that employers permitting remote work outside the locality or state of their operations should consider taking steps to ensure compliance with the applicable state and local laws. California alone has 35 different minimum wage ordinances, so it is possible for a company to be located in a city without a minimum wage ordinance while an employee resides and will be working from another city that imposes a strict minimum wage that may be enforced through various actions.

Remote work in different states can also involve companies needing to comply with a state’s particular meal and rest break laws, and these types of laws can vary considerably between states. Different states can also impact overtime pay.

Failure to comply with applicable state and local laws relating to minimum and overtime wages, meal periods and rest breaks, or postings for remote employees could subject businesses to many different kinds of agency enforcement actions and possible lawsuits relating to unpaid wages, penalties, and legal fees. All of these kinds of concerns should make most California employers question whether they want to allow employees to work remotely in states or localities other than the locations of their headquarters.

Contact Our Mountain View Startup & Small Business Attorney

Need help managing your company’s compliance with remote work laws? Let Kalia Law P.C. be your guide.

Our firm will help you comply with all applicable state tax laws and do everything necessary so you can run your business without fear. Call (650) 701-7617 or contact our Mountain View startup & small business attorney online to receive a free consultation.

- Claire Kalia


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