Do Remote Jobs Have to Abide by Local Minimum Wages?

Washington residents who once commuted to Oregon are now getting a major tax break by working from home.

Idly scrolling through remote job ads, I noticed several offering $8 to $9 an hour. Do remote jobs not have to abide by local minimum wages? If so, could a Portland company “relocate” to Alabama and cut their current employees’ pay accordingly? —Cathleen A.

I certainly appreciate the penny-pinching fiendishness of your plan, Cathleen, but if it were legal to pay employees based on the minimum wage at corporate headquarters, Jeff Bezos would live in Somalia. Your wage is governed by the laws of the place where you physically do the work, regardless of the state (or planet) your employer calls home.

Delta Airlines, for example, is based in Georgia, where the state minimum wage is $5.15 an hour.* But if they hire you to work in downtown Portland—incinerating passengers’ luggage, maybe, or throwing darts to determine which flights to cancel—you’re entitled to the local minimum wage of $14. This holds true even if you were hired in Georgia, your name is Bubba, and you go back home to Macon every weekend.

Things are less clear when it comes to taxes, though, especially in a pandemic. Both Oregon (which has an income tax) and Washington (which doesn’t) have always agreed that if—and only if—you work in Oregon, you pay Oregon tax. Thus, Washington residents who once commuted to Oregon are now getting a major tax break by working from home.

New York, on the other hand, claims that (for the duration of COVID, at least) nonresident telecommuters employed by New York firms still legally work in New York. This means there are probably people in New Jersey paying New York income tax who haven’t crossed the Hudson in almost two years. (Maybe that’s one of the reasons cranky New Jerseyans almost elected a Republican governor.)

New York’s harder line has been adopted by other states, too. Who’s right? The Supreme Court had a chance to decide in a case called Massachusetts v. New Hampshire, but—possibly mistaking it for a pretty dull-sounding basketball game—they refused to hear it. For now, if you’re going to telecommute to another state, make it Oregon.

* Yeah, I know. In practice, folks get the federal minimum of $7.25, but Georgia lawmakers like keeping $5.15 on the books so you won’t forget they’re assholes.

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