Understanding Employer Obligations for Remote Employees in Arizona

In today’s evolving workforce, many employees work remotely, which allows them to work for companies around the world instead of just within their region. Hiring remote workers or independent contractors can create significant opportunities for your business. However, you must abide by certain employer obligations for remote employees according to state laws.

Discover how Arizona employment laws apply to your remote workforce in this helpful guide. Consult with an experienced business lawyer in Phoenix, AZ, if you need assistance understanding state and local laws for remote workers.

Employment Laws Vary for Remote Workers

If you operate a business in Phoenix with a physical location and in-person workers, you must follow all laws pertaining to employee rights, such as:

  • Available medical leave
  • Accommodating disabled employees
  • Meeting minimum wage requirements
  • Completing tax obligations

If you have employees working remotely across Arizona, they will be subject to the state’s remote work laws. Employees who reside in other states or U.S. territories will fall subject to the laws within their own state. Federal law applies to all employees working in the U.S., regardless of whether they go into an office or work remotely.

Understanding Arizona Employment Laws

What are the employer obligations for remote employees in Arizona? State law regarding this modern type of employment is available via Arizona’s Connected Workforce Program. Many of the policies in this program came to light in the wake of the COVID-19 pandemic when companies had to alter their workforce arrangements for public safety.

Employers and employees should be familiar with these policies, which include:

  • A provision that lets employees work from a remote location at least one day per week
  • Required outlines and conditions regarding remote work that employees need to sign off on
  • Annual updates to the employer’s agreement

In addition to these policies, Arizona employers must follow federal laws for remote staff, regardless of the employee’s state.

Applicable Laws for All U.S. Employers

The U.S. Department of Labor paves the way for many labor laws in Arizona. Federal labor laws protect both remote and in-person staff across multiple states. Below is a breakdown of prevalent employer obligations for remote employees.

Minimum Wage and Hour Issues

The Fair Labor Standards Act dictates that non-exempt employees receive at least the federal minimum wage and receive overtime pay of 1.5 times their regular rate. Employees should remain aware of the different minimum wage rates on national and local levels, as well as the specific hour laws that allow an employer to pay overtime.

In Arizona, a remote employee will receive a higher minimum wage of $14.35 per hour compared to the national rate of $7.25 per hour. States like California provide overtime wages when an employee works more than eight hours in a day, whereas other states only provide it when they work more than 40 hours per week.

Family and Medical Leave

According to federal employment law, employers with more than 50 employees must grant them up to 12 weeks of leave to tend to family and health issues, such as an illness or birth or adoption of a child. Unlike overtime pay obligations, employers do not need to provide paid family leave, though applicable state laws may say otherwise.

Anti-Discrimination Laws

Federal labor laws prohibit an employer from discriminating against either a prospective employee or current staff member on the basis of their:

  • Race or ethnicity
  • Religion
  • Disability
  • Sex
  • Sexual orientation
  • Age

Under these laws, employers must make the opportunity for remote work arrangements equal for all prospective employees. They must also provide equal pay for equal work.

Other legal obligations include having labor law postings available throughout the workplace. Remote employers have to accommodate this law in a virtual space.

Arizona’s Employer Obligations for Remote Employees

One key way businesses can improve employee retention is by helping staff feel valued and providing clear descriptions of their work expectations. Part of this boils down to a company’s unique internal operations, but the other part involves the state and local regulations for employers.

What are the specific conditions that Arizona employers must follow for each remote employee they hire? Check out the requirements below.

Payroll and Tax Implications

As an employer, you must issue equal pay to employees who perform equal work. This rate begins with the state minimum wage according to local law. It’s your responsibility to track a remote worker’s time on the clock and prevent them from accruing unauthorized overtime hours.

You need to stay up-to-date on federal, state, and local requirements surrounding the following:

  • Tax rules: This includes sales taxes and any tax reciprocity agreements between states.
  • Workers’ compensation insurance: Remote employees are entitled to workers’ compensation.
  • Unemployment insurance: Workers who lose their employment through no fault of their own can receive payment via the state’s unemployment insurance program

Failing to comply with tax laws can create administrative burdens and lead you to need financial counseling. Make sure you keep up with changing tax rules and make it clear that employees need to pay income tax on all of their earnings, including their regular salary plus bonuses and commission.

Draft a Remote Employment Agreement

In industries ranging from insurance sales to finance and beyond, all remote staffers need to know what employers expect from them. This includes the daily job duties as well as components like:

  • Work schedule and location
  • Data security measures
  • Equipment and supplies

You have the freedom to customize this agreement. For example, one company might list a working computer and phone as business expenses employers must provide their workers. Other employers may deem these pieces of equipment are up to the employee to supply.

Learn About Employment Laws by Contacting Anthony Law Group

Not sure if Arizona has a reciprocity agreement in place? Do you need help choosing the right business structure based on current labor laws? The legal team at Anthony Law Group can advise you.

Contact our office today to request a consultation regarding employer obligations for remote employees or other aspects of business law. Call (602) 362-2396 or submit a request on our website.


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Anthony Law Group

Anthony Law Group