The state an employee is working in – even temporarily – determines the labor laws that the employee is subject to.
When it comes to taxes, out-of-state work may require a multi-state tax return.
Overtime: Oracles Lesson Learned
In 2011, the California Supreme Court ruled that Californias overtime laws did apply to Oracles nonexempt traveling instructors who had come in from Colorado and Arizona for work trips. Ultimately, Oracle was responsible for paying overtime to traveling workers for the hours they worked within Californias borders.
If, for example, a minimum wage employee from Wyoming is sent to Colorado for training, their wages for hours worked in Colorado would need to be adjusted to meet Colorados minimum wage requirements.
When sending employees to work out of state, be sure to compensate them in a way that complies with the foreign states wage and labor laws. When it comes to taxing their wages for out-of-state work, the employee may need to file a multi-state tax return.