Which State’s Overtime Law Applies to Remote Workers?
For remote employees, wage and hour law follows where the work is done, not where the company is based. What that means for overtime and minimum wage.
The short answer
Wage and hour law generally follows the place where the work is physically performed. If you work from your home in Colorado for a company in Texas, Colorado’s minimum wage, overtime and break rules apply to you, on top of the federal FLSA. The company’s headquarters, where you were hired, and where your manager sits usually do not change that.
Why it matters for overtime
Most states simply follow the federal rule: 1.5× after 40 hours in a week. A few do not, and that is where remote teams get caught out. California and Alaska owe overtime after 8 hours in a day, Colorado after 12, and California pays double time after 12. A remote employee in one of those states who works four 10-hour days is owed daily overtime, even though the week totals 40 and an employer running payroll on the federal rule would show none. Compare any two states with the state comparison tool, or open the employee’s state on the overtime laws by state page.
Minimum wage, city rates and pay rules
The same logic covers the wage floor. A remote worker is owed the minimum wage of the state they work in, and where a city sets its own higher rate, that generally applies to hours worked inside the city. The current figures are in the minimum wage by state table. Other pay rules follow the work state too: how often employees must be paid, what a pay stub has to show, and how fast a final paycheck is due.
Short trips and split weeks
Occasional travel does not usually move someone under another state’s rules, but longer stretches can. California, for example, applies its overtime law to non-residents for whole days and weeks worked inside the state. There is no single national threshold, so when an employee plans to work from another state for more than a short visit, check that state’s rule before the hours are worked.
What employers should set up
Keep a current work location on file for every remote employee and ask for notice before anyone relocates. Register for payroll withholding and unemployment insurance in each state where you have an employee. Run overtime for each person on their own state’s rule, not the company’s home state. And post job ads with a pay range where the role could be done from a state that requires one — see the pay transparency laws by state.
Frequently asked questions
Generally the law of the state where the employee physically performs the work, which may differ from the employer’s location. Federal FLSA rules apply everywhere as a floor.
Usually not for wage and hour rules. If you work from home in another state, that state’s minimum wage, overtime, and pay rules apply to your hours, not the rules of the state where the company is based.
Record each remote employee’s work location, apply that state’s wage and overtime rules, ask employees to give notice before relocating, and keep written payroll assumptions in case of an audit.
It depends on the states and how long you are there. Some states, such as California, apply their overtime rules to full days or weeks worked in the state even by non-residents. Check the rule for each state before the hours are worked.