In today’s employment landscape, remote work has become a standard offering for many organizations. For nonprofits, the ability to offer remote work can expand the pool of qualified candidates and support employee wellbeing and retention. But remote work arrangements also carry legal risks that organizations should understand before saying yes to an employee’s request to work from the beach in Florida or a family home in another country.
This article focuses on remote work considerations relevant to Oregon-based nonprofits.
Workers’ Compensation Coverage
Oregon workers’ compensation coverage extends to employees working temporarily out of state, but only up to 30 consecutive or cumulative days per calendar year. If an employee works outside Oregon beyond that threshold, the organization may need to purchase separate workers’ compensation coverage in the destination state.
For work that stays within Oregon, no additional coverage is required. An employee who normally works at your Eugene office but spends a week working remotely from Newport is fully covered under your existing policy.
These guidelines align with standards set by the Oregon Department of Administrative Services (DAS) and are consistent with SAIF insurance guidelines. Though DAS policy technically applies to state agencies rather than nonprofit corporations, its risk and compliance framework reflects widely accepted best practices that nonprofits would do well to follow.
Labor Law Compliance
One of the most commonly misunderstood aspects of remote work is which state’s labor laws apply. The answer is straightforward: labor law obligations follow the physical location where the work is performed, not the employer’s headquarters or the employee’s home address.
This means that if one of your Oregon employees works remotely from California for two weeks, California labor law governs that work. California has some of the most employee-protective laws in the country, including specific meal and rest break requirements, overtime rules, and paid sick leave mandates. Compliance is not optional; it is a matter of state jurisdiction.
As a practical matter, a state like California is unlikely to enforce its wage and hour laws aggressively against a brief visit. But the risk grows with duration and frequency, and it is a risk management issue the organization should actively manage rather than ignore.
Employees working remotely in another state, even temporarily, may be entitled to that state’s minimum wage and overtime rules, meal and rest break requirements, paid sick leave (if locally required), and rules governing final paychecks and accrued leave. Cities with local income or payroll taxes, such as San Francisco, New York City, or Philadelphia, may also require withholding and reporting even for short-duration remote work.
For Oregon-based remote work, some local taxes may apply depending on the city or county (Portland and Lane County are examples). Any changes in work location should be communicated to your payroll provider promptly.
One additional nuance worth noting: if your employee handbook provides rights that are more generous than what the law requires, you are expected to honor your own policies regardless of where the employee is working. For example, if your handbook promises paid sick leave to all employees, that commitment applies even if the employee is temporarily working in a state that does not require it.
State Registration and Employer Nexus
When an employee works from another state on an extended or permanent basis, the organization may trigger what is known as “nexus” in that state, meaning a sufficient level of presence to require registration and compliance. Depending on the state, this could mean registering with the Secretary of State as a foreign (out-of-state) employer, filing for state unemployment insurance, registering as a charitable organization with the state attorney general or equivalent agency, and withholding and remitting state income tax.
These obligations are typically triggered by regular or prolonged physical presence, not a brief vacation with a laptop. A clear internal process for reviewing and approving remote work requests is one of the most effective tools for managing this risk before it becomes a compliance problem.
International Remote Work
International remote work introduces a distinct set of risks that go well beyond multistate compliance. Most U.S.-based workers’ compensation policies do not cover employees working abroad. Beyond insurance, allowing an employee to work from another country, even if that employee is a citizen of that country, can expose the organization to foreign labor law obligations, immigration and visa complications, tax residency or permanent establishment risk, and data protection requirements such as GDPR if the employee is handling sensitive information in a covered jurisdiction.
These are not theoretical risks. Organizations have inadvertently created foreign tax obligations or violated immigration rules by allowing casual international remote work without legal review. For this reason, international remote work warrants a higher level of scrutiny than domestic out-of-state work.
Building a Remote Work Policy
The most effective way to manage remote work risk is to have a written policy that sets clear expectations and establishes a process for review and approval. Here is what a solid remote work policy should address:
Geographic limits. It is recommended that remote work outside of Oregon be limited to no more than 30 calendar days per year without prior approval and legal review. This threshold aligns with workers’ compensation coverage limits and helps the organization stay ahead of nexus and labor law issues.
Approval process. Any request to work outside the employee’s designated state or country should require prior written approval. HR should consult legal counsel or a reliable multi-state compliance resource (such as Brightmine or SHRM’s State Law Comparison tools) before approving extended or recurring out-of-state work.
Tiered risk review. A practical approach is to evaluate remote work requests in tiers based on duration and location. Short-term domestic travel may require only HR notification and a quick compliance check. Longer-term or recurring arrangements in other states should trigger a coordinated review involving HR, payroll, and legal counsel to assess whether additional obligations apply. All remote work requests and locations should be tracked centrally.
Labor law acknowledgment. The policy should make clear to employees that labor laws follow the physical location of work, and that the organization will review applicable requirements when requests are made.
Payroll coordination. Establish a clear process for communicating remote work locations to your payroll provider so that tax withholding is handled correctly. This step is often overlooked and can result in penalties.
International work. Organizations may choose to prohibit international remote work entirely, and that is a completely reasonable and defensible policy. If the organization does permit it, international remote work should be brief, pre-approved, and cleared by outside legal counsel or a qualified compliance professional before it begins.
Resources:
Legal Article on Remote Work Issues
If you have questions about building or updating a remote work policy for your nonprofit, our office is available to help.
