Remote work is increasingly popular today, and for good reason: it allows employees greater flexibility in the workplace, while employers are able to source talent from anywhere in the United States. More employers are offering remote accommodations to hire and retain the best workers, including hiring out of state employees in California. Show
When you hire outside your own state, you open yourself up to certain complications. Employers need to be aware of each state’s employment laws. They must register with the state as an employer, register to withhold income tax and review all policies to ensure that they comply with state law. That can get complicated, fast. Every state has different standards for their employees: what works in Arkansas may not apply to California employees. SixFifty’s multistate employment tools simplify the process to hire workers in California. The examples below demonstrate what it takes to hire in California, and how we can save employers time, money and hassle. Scenario 1: Employee works from home in another stateSometimes employees need to move to another state, whether to save on housing costs, be near family or to accommodate a partner’s employment. Employers may choose to keep them on as a remote employee in the new state. However, this becomes an issue if the company hasn’t already established an economic nexus in the new state. They must take the time to ensure compliance with the new state’s employment laws. Because California has strong worker protections, what passes muster in Utah, for example, may not be compliant with California laws. Scenario 2: Hiring out-of-state employees in CaliforniaEmployers may also choose already out-of-state employees. For instance, a company might be headquartered in Idaho, but the best candidate for the job is in California. Even though the company does the majority of their business in Idaho, they must register as a California employer. This ensures that the employees get the benefit of California worker protections, and employers will not be penalized for failure to comply. Multistate Employer Registration Factors to ConsiderIn both of the above scenarios, employers need to pursue multistate compliance or risk being held accountable by the Department of Labor for failing to comply with state-specific employment standards. Compliance differs across all 50 states. To simplify the process, SixFifty has narrowed down multistate employer registration considerations to five core areas of focus. Here’s what it looks like for companies hiring out-of-state-employees in California—or accommodating employees moving to California if there’s no established business nexus. 1. California Employment RegistrationThe first order of business is establishing the company as a California employer. This requires an economic nexus, which you can create by registering the business with the Secretary of State, reporting new hires to the Department of Labor, and obtaining workers’ compensation and unemployment insurance coverage.
2. California Tax RegistrationEmployers must register with the Employment Development Department if they operate a business and employ one or more employees, and pay more than $100 in wages in a calendar quarter. Additionally, they must:
3. California Employment PoliciesCalifornia has 18 state-specific employment policies which must be covered in the employee handbook. SixFifty’s employee handbook tool makes it easy to include the required policies and review your existing ones for compliance purposes. Keep in mind that certain cities have hyperlocal policies, so you’ll need to review your handbook every time a new employee comes on board.
4. California Employment ImplicationsCalifornia has unique policies specific to the state. Minimum wage, at-will employment, exempt status and overtime are just a few of the policies employers need to comply with. Additionally, California’s COVID-19 policies may be different from the provisions in your original state. Employers must ensure that their employment agreements and handbooks reflect these laws.
5. California SignageFinally, California requires certain signage to be “posted” in the workplace. This includes remote workers: the state allows signage to be posted online, as long as the worker can easily access the information. Required signage includes information about payday, workers’ compensation, paid sick leave, COVID-19 policies and more.
Simplify Multistate Compliance with SixFiftyThe process of maintaining compliance can be complex and extremely nuanced for companies unfamiliar with California employment laws and standards. It’s why SixFifty has compiled an extremely useful tool for businesses hiring out-of-state employees in California. To simplify the process of hiring out-of-state employees in California or supporting remote employees on-the-move, check out our 50 State Hiring Kit. What is an excluded employee State of California?Excluded employees
Excluded employees are employees who do not have collective bargaining rights under the Ralph C. Dills Act (Dills Act). In general, we designate these employees managerial, confidential, and supervisory.
Are UC employees considered state employees?Employees of the CSU and UC systems are not part of the State of California civil service system. Therefore, they are not eligible to transfer into civil service positions, and must take a State exam if interested in State employment.
Who is considered an employee under California law?Education Code Section 26118 – “Employee” means a person engaged to perform creditable service. Business and Professions Code Section 7580.9 – “Employee” means an individual who works for an employer, is listed on the employer's payroll records, and is under the employer's direction and control.
How many state employees are in California?Number of employed persons in the United States in 2021, by state (in 1,000s). |