Is your remote work situation actually legal?

Written by Sarah Archer

The trend of working from home is growing rapidly with companies and employees alike recognizing the economic and emotional benefits of telecommuting. According to work from home statistics, remote work saves money, provides better work-life balance, and even leads to improved productivity. However, in their haste to take advantage of remote work opportunities, both employees and corporations may not take certain work-related legal or tax code issues into account.

Remote Independent contractor vs remote employee 

The distinction can always be difficult and with companies seeking a remote work force and looking for independent contractors to fill their needs in everything from financial planning to marketing.  However, depending on what they are asking when hiring remote workers they may be liable for considering these workers employees. It is not a simple distinction to make and even the IRS site states that there “is no ‘magic’ or set number of factors that ‘makes’ the worker an employee or an independent contractor, and no one factor stands alone in making this determination.” However, remote status is definitively not a determining factor in this distinction.  

Just because you are not working regularly in an office, and you have some more flexibility with where and when you work, doesn’t mean that you should be considered an independent contractor. If you are working full time, an employer dictates your hours, training, work policies, and has complete control over what you produce then you have a right to be treated as an employee and deserve to seek benefits and employee tax status. 

Remote work safety

This article from Forbes gets further into the remote worker rights issue and suggests that many remote work situations are not properly legally protected.  Workers compensation, for example, is often not properly understood when working remotely, as well as things like health and safety standards. The upshot is that it is crucial to outline a remote work policy with an employer to make sure that expectations are clear when it comes to your status as an employee — even when you are working from another venue.

Tax issues

There are tax implications to consider when working remotely that you may not have anticipated. While your employer may understand the tax codes and laws in their state, they may not be familiar with what is necessary where you are working. Make sure that you speak with them about any possible issues related to state to state taxes. If you are working in another state, employers and employees may be subject to taxes from both (or they may not be). 

In addition, your company misclassifies you as an independent contractor then they can be liable for employment taxes like social security, that otherwise you are paying. Make sure you understand your status and have open communication with your employers about how they are contracting your time. 

As with most contractual relationships, the best thing to do is to be open and communicative about expectations. If you feel as though an employer is treating you as an employee rather than an independent contractor, talk with them about the issue. And make sure that you have something in writing that describes your work relationship. It’s important for both sides to know exactly where they stand. 

Sarah Archer

Sarah is a Content Marketing Manager at Siege Media and Your Best Digs who works remotely while traveling. She’s passionate about developing high-quality content for diverse industries ranging from startups to Fortune 500 companies. When she’s not creating content, she’s likely hiking a new trail or mapping out the next destination.

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