The national hiring landscape has switched to remote work in recent years. Instead of tethering employers and employees to physical changes, workers are able to work for out-of-state companies from the comfort of their own homes. In turn, employers are also hiring out of state employees in Massachusetts to have access to the country’s top talent.
While COVID-19 forced employers’ hands, hiring out-of-state employees can be a challenge. Employment laws can vary dramatically between states. Standards in Massachusetts which may conflict with your home state’s requirements and policies. It’s surprisingly easy to run afoul of the law, which exposes your company to hefty fines and fees.
SixFifty developed multistate employer registration tools, which simplify the out-of-state hiring process, without the cost of hiring an employment lawyer in every state. If you’re thinking about hiring in Massachusetts, here’s what the process might look like.
Scenario 1: Employee works from home in another state
Before the popularity and possibility of remote work, employees often had to change jobs when they needed to move out of state. Today, employees can move to follow their partners, seek a lower cost of living area, move closer to aging parents and more. Whatever the reason for moving, there’s no need to hire someone new. Employers don’t have to let their best employees go—all they have to do is comply with the new state’s employment laws.
Scenario 2: Hiring out-of-state employees in Massachusetts
Sometimes a national employment search yields the best results. When your company posts a remote work position, you might need to register in the new state. For instance, if your new employee lives and works in Massachusetts, they’re subject to Massachusetts state employment laws—and so are you. You need to ensure that your employment policies and procedures are compliant. This can get complicated fast—especially if you’re hiring in multiple new states.
Multistate Employer Registration Factors to Consider
Whatever your reason for hiring or retaining out-of-state employees, it’s your job to comply with all state laws. Failing to comply in each new state could result in expensive penalties. With such dramatically varied employment laws, it’s easy to spend days researching compliance.
SixFifty has identified five core areas of focus for every business hiring workers in a new state. Our multistate employment tools make it faster, easier, and more affordable to stay in compliance with Massachusetts’ employment laws.
1. Massachusetts Employment Registration
First, employers need to establish an economic nexus within the state of Massachusetts, if one does not already exist. This process includes registering the new business with the Division of Corporations, Business and Professional Licensing as a Foreign Corporation, reporting the new hire to the Department of Labor and registering for unemployment and workers’ compensation insurance.
- Obtain a registered agent
- Register to do business in Massachusetts
- Report new hire to the Department of Labor
- Register for unemployment insurance
- Report unemployment insurance account to payroll provider
- Obtain workers’ compensation coverage or update the policy
2. Massachusetts Tax Registration
Hiring Massachusetts employees means you are also subject to Massachusetts state taxes. You’ll need to register for an income tax withholding account, complete the required paperwork and register for a sales tax license or permit. Employees, goods, transactions and revenue above the state’s threshold establish an economic nexus, which in turn requires you to pay taxes.
- Register for income tax withholding account
- Obtain the completed state income tax withholding form from the employee
- Register for a sales tax license or permit
3. Massachusetts Employment Policies
Next, you must review your employment policies to make sure they do not conflict with Massachusetts state laws. Massachusetts has 13 mandatory state policies to include in your handbook. Many of these are different types of leave available, from domestic violence to jury duty leave.
- Review employee handbook for compliance
- Update policies or add new leave policies as needed
4. Massachusetts Required Employment Policies (2024)
- Day of Rest Law (Workweek and Work Schedules Policy)
- Domestic Violence Leave (50 Employees)
- FMLA
- Holidays
- Jury Duty Leave
- Meal and Rest Breaks
- Overtime Policy
- Paid Sick Leave
- Parental Leave (6 Employees)
- Pay Transparency Policy
- Sexual Harassment Policy
All employees must be provided a written copy of this policy annually. New employees must also be provided a copy at the time of employment. - Small Necessities Leave (50 Employees) (School Activity Leave)
- Volunteer Firefighter an Emergency Medical Technician Leave
- Voting Leave
- Witness Duty Leave
5. Massachusetts Employment Implications
You’ll also need to be aware of non-compete restrictions, the state minimum wage and overtime policies. Your company’s payroll policies must comply with Massachusetts standards. Similarly, you should review whether your insurance covers Massachusetts employees, and make adjustments as necessary. Your new employee may also be subject to state-specific COVID-19 laws and policies.
- Ensure non-compete provisions comply with Massachusetts law
- Confirm the employee is paid at least the minimum wage
- Review the applicable overtime laws
- Confirm the payroll practices meet the payment frequency standards in Massachusetts
- Consider whether insurance extends coverage to employees in Massachusetts
- Consider COVID-19 laws that affect the employee
6. Massachusetts Signage
Finally, employers must post or distribute the state’s required signage. There are five state-required signs, but Massachusetts has not weighed in on how to post them for exclusively remote workers. Typically, posting the signs on the company website or in easily accessible folders will satisfy this requirement.
- Post or distribute required signage
Simplify Multistate Compliance with SixFifty
The process of maintaining compliance can be complex and extremely nuanced for companies unfamiliar with Massachusetts employment laws and standards. It’s why SixFifty has compiled an extremely useful tool for businesses hiring out-of-state employees in Massachusetts. To simplify the process of hiring out-of-state employees in Massachusetts or supporting remote employees on-the-move, check out our 50 State Hiring Kit.
