Employees across the country got a taste of pajama-pant attire, a quick commute from bed to desk and the freedom that came with working from home during the pandemic. Many of them loved it.
According to a Jan. 2022 study by Pew Research, roughly six in ten workers found they can do their jobs from home. In early 2020 when companies shifted to work-from-home situations, it was often out of necessity due to the COVID-19 pandemic. Now, Pew found, many employees are working from home out of choice.
With the rise of virtual work situations, people are able to do jobs otherwise not available to them. Pew found that since 2020, 17% of people have relocated away from the office to live somewhere else while still working remotely.
In the two years since the start of the pandemic, work from home meant work from anywhere. Now, employees are finding out those two things are not always synonymous, due in large part to new laws.
At least ten states—California, Colorado, Maryland, Nevada, New Jersey, New York, Ohio, Rhode Island and Washington—have implemented restrictions that essentially limit out-of-state companies’ ability to hire their residents for remote work. All but one of these laws were enacted between 2020 and 2022 (one California law was established in 2018).
Colorado, Washington, and a few municipalities in New Jersey and New York all require employers to include pay or pay ranges in all job postings. While this new requirement was intended to promote transparency and allow workers to fight for fair wages, some out-of-state companies have begun refusing to cooperate with the law. For example, to avoid listing the pay, a Nike human resources job posting stated “open to remote work, except in Colorado,” a local NBC affiliate news station reported.
Nevada allows an applicant to request pay information after the initial interview. Connecticut, Maryland and Ohio require an employer to disclose pay information upon request. Rhode Island requires the employer to disclose pay information upon request prior to talking about compensation for the role.
Most recently, on Sept. 27, California Gov. Gavin Newsom expanded the state’s job transparency. After meeting with the Legislative Women’s Caucus, he is requiring employers to make salary ranges available for potential employees. Additionally, he is making them gather data on race and gender disparities.
While other companies may list their pay information for applicants to view, they may not choose to hire in many or multiple states because of taxes.
Companies may have to pay state taxes where their main offices or headquarters are but also the states where their employees live and the same goes for employees. As a remote worker, if your W-2 lists wages from a state other than your state of residence, you’ll have to file a non-resident tax return to that state in addition to the tax return in your home state. Many geographically small states with a lot of intra-state commuting have created a more straightforward process, but virtual work creates a new set of tax issues as pandemic-ensued moving and work from home opportunities have increased.
Companies who do hire out-of-state workers have some governmental hoops to jump through. They must register and pay state and local taxes in the areas their employees live. There is a lot of paperwork required to hire out-of-state and many businesses just may not want to deal with it. Additionally, tax laws may determine in which states companies can conduct business and hire employees.
Depending on the job requirements, some companies may also have logistical issues with their employees working virtually. Team meetings can be difficult with participants in different time zones and some employers may prefer having people in the office. According to the Pew report, 60% of employees say it’s been harder to connect with their colleagues now that they’ve made the switch to working from home.
Working in the office provides employees with friendship, camaraderie, and collaboration that working through screens doesn’t provide. A 2021 dive into people’s hesitancies to return in person by Forbes highlighted the many benefits that working in the office offers.
The good news is that as the workforce emerges from pandemic times, hybrid work options — where employees can choose to be in the office some days of the week and be virtual other days — has been exploding in popularity. According to an Accenture report, 83% of employees prefer a hybrid working environment.
Employees saw the efficiency of working from home during the pandemic and are using it to their advantage. They also know the importance of working in the office with others and have begun combining the two.
Despite tax, state and federal laws that are currently limiting “work from anywhere” jobs, virtual work environments are in premature stages. As more people find the unexpectedly positive opportunities provided by the pandemic, the workforce will have to continue to shift until it catches up.