Remote work has become common for many workers in New Jersey and around the country. The COVID-19 pandemic may have caused a transition that was already underway to speed up. The increasing amount of remote work, however, raises legal questions that might not have easy answers. When an employee who lives in New Jersey works from home for their New Jersey-based employer, it is clear that New Jersey employment laws apply to them. What happens, though, when an employee works from their New Jersey home for an employer in another state? Determining which state’s laws should apply has proven to be difficult.
The question of which state’s law applies when a work-from-home arrangement crosses state lines has no simple answer. The legal system has only begun to address it. State employment laws can significantly differ from one state to another. New Jersey offers wide-ranging protections against employment discrimination, for example, with far more protected categories than many other state laws. The state government has issued regulations allowing employers with virtual workers to make posters advising employees of their rights available online. Many other questions remain unanswered.
At least one New Jersey court has ruled on how state law applies to state residents who work outside the state. A 2013 federal court decision held that the New Jersey Law Against Discrimination (NJLAD) did not cover a New Jersey resident who worked out-of-state. The plaintiff lived in New Jersey. His employer, however, was based in Pennsylvania, and almost all of the plaintiff’s job duties occurred there. The plaintiff, who was alleging discrimination and harassment, argued that the NJLAD should apply since he received harassing messages via text and email while at home in New Jersey. The court disagreed.
The court’s decision is related to the question posed in this post, but it does not answer it. The case before the court involved an employee who physically crossed state lines for work. The question that many people could now face involves remaining in New Jersey while working for employers in other states. Choice-of-law questions can affect many aspects of employees’ jobs and lives.
State taxes
New Jersey remote workers may find themselves owing taxes to the states where their employers are located. This has been the case for people who work remotely in New Jersey for New York employers. They pay taxes in New York and receive a credit in New Jersey. The governor has proposed legislation that would reverse this.
Disability and sick leave
New Jersey offers benefits like disability leave and earned sick leave, while many other states do not. Employers fund these systems through payroll taxes. Remote workers with out-of-state employers might not be able to access these benefits if their employers are not contributing to the systems.
Unemployment benefits
A similar issue may arise with unemployment insurance, which also receives its funding from payroll taxes.
Employment protections
The NJLAD protects New Jersey workers against discrimination based on a wide range of categories, including race, sex, sexual orientation, gender identity, disability, age, and religion. Not all states offer the same protections. Remote workers can experience discrimination and harassment. It remains unclear whether the NJLAD can apply to an employer whose only contact with New Jersey is a remote worker.
If you have experienced unlawful workplace practices in New Jersey or New York, you need a knowledgeable advocate who can help you assert your rights. You can contact the employment lawyers at the Resnick Law Group online, at 973-781-1204, or at 646-867-7997 to schedule a confidential consultation to discuss your case.