A single remote employee generally subjects an employer to the employment laws of the state where the work is performed, along with registration and tax obligations.
What follows the employee. Wage payment timing and deduction rules; overtime including daily overtime in some states; meal and rest break requirements; paid sick leave; final pay rules; leave entitlements; anti-discrimination statutes with lower coverage thresholds than federal law; and notice and posting requirements.
Registration and tax. Foreign qualification with the secretary of state, withholding registration, unemployment insurance accounts, and workers compensation coverage written for that state. Workers compensation is the one most often missed and the one with the harshest penalties.
Nexus. An employee may create income tax nexus for the business, and in some states sales tax nexus.
Handbook administration. State-specific addenda are the standard solution. Applying a single national policy means applying the least protective standard somewhere it does not apply.
Expense reimbursement. Several states require reimbursement of necessary business expenses, which for remote workers reaches internet, phone and equipment.
Practical control. A policy requiring approval before an employee relocates, with a stated list of approved states, is far easier than discovering the relocation through a tax notice.