Glossary term
Remote Work
Remote work is an arrangement where an employee performs job duties away from the employer’s regular worksite, often from home or another approved location.
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What Is Remote Work?
Remote work is an arrangement where an employee performs job duties away from the employer's regular worksite. The work may be done from home, a coworking space, another city, or another approved location, depending on employer policy and the job.
Remote work can affect income, commuting costs, taxes, benefits, labor law compliance, equipment, data security, and where an employee is considered to work. It is not just a lifestyle term; it can change the financial and administrative structure of a job.
Key Takeaways
- Remote work means job duties are performed away from the usual employer worksite.
- It can reduce commuting costs but may shift some home office, internet, or equipment costs.
- Employers still need to track compensable hours for nonexempt workers.
- Working across state lines can create payroll, tax, licensing, and benefits questions.
Financial Tradeoffs
Area | Possible Benefit | Possible Cost or Issue |
|---|---|---|
Commuting | Lower transportation, parking, and meal costs | Less access to employer-paid transit or office amenities |
Housing | More flexibility about where to live | Need for dedicated workspace or higher utility costs |
Taxes | May support location flexibility | State and local tax rules can become more complicated |
Wages and hours | Flexible schedule for some roles | Time tracking still matters for nonexempt employees |
Career path | Access to jobs outside the local market | Promotion, visibility, and culture may differ by employer |
Workplace and Compliance Context
Remote work does not erase wage and hour rules. Employers may still need to track hours worked, pay overtime when required, reimburse expenses where state law requires it, and apply employment policies consistently.
For employees, remote work can change the household budget. Lower commuting costs may be offset by higher utilities, internet upgrades, home office furniture, child care complexity, or the need to travel periodically to an office.
Tax and Location Questions
Location matters. If an employee works from a different state than the employer's office, payroll withholding, unemployment insurance, state income tax, and employer registration rules may be affected. The rules vary by state and by work arrangement.
Remote work can also affect benefits and insurance. Health plans, workers' compensation, disability coverage, and paid leave rules may depend on where the employee works and where the employer is registered.
The Bottom Line
Remote work is work performed away from the employer's usual worksite. It can improve flexibility and reduce some costs, but it also raises practical questions about taxes, wage rules, equipment, benefits, security, and long-term career tradeoffs.