HR for Remote Out-of-State Workers: Payroll and Insurance

Over the last two years, the level of remote work taking place within the US business world has skyrocketed. Due to both COVID-19 and realizations from many employers that remote work can be just as effective as in-person work without some of the associated costs, many businesses have decided to let at least some portion of their workforce continue working from home — and while this is enormously beneficial in several ways, it also presents a few important HR hurdles to leap, especially if you have employees in multiple states.

At WTA Inc., we’re happy to assist with a variety of human resource services, from payroll services and worker’s compensation claims management to risk management, recruitment and hiring, and much more. We’ve assisted many business owners in the last couple years as they move through important HR themes for remote workers — particularly those who have employees working remotely in a state different from your main offices. This two-part blog series will go over a few of the areas you’ll need to keep an eye on if you’re in this situation, or planning to be in the near future.

HR remote out-of-state workers

Payroll Areas

There are a few important factors to consider with regard to payroll for out-of-state remote workers:

  • Such employees must complete a state W-4 and update their address with the payroll provider. Some states do not require a separate tax form for this, rather allowing you to indicate the address on your standard W-4.
  • Payroll provider must establish unemployment insurance and a withholding account for that state.
  • If needed, consult your corporate tax advisor for tips on whether a business license or sales and use tax account will be required for this employee.

Generally speaking, none of these areas should be too complex. If you need any assistance with them, however, our payroll and tax administration experts are happy to help.


When it comes to insurance coverage for out-of-state remote employees, the state they live in must be added to their worker’s compensation policy. From here, there are certain states that require a separate state’s worker’s compensation to cover remote employees; others do not, and will allow you to indicate the working address for this information.

One note: In all such cases, organizations are liable for injuries that occur in an employee’s home office if the employee is working remotely. This means that an injury while an employee is checking their personal email, for example, might count as being on the job — but on the flip side, if the employee is working remotely for you, it’s likely that they’re not allowed to conduct personal business on your time.

For more on how to manage HR practices for remote employees who work out-of-state, or to learn about any of our human resource programs or services, speak to the staff at WTA Inc. today.