Employee working remotely from outside the province

Most of our employees are working remotely during the pandemic. Some have asked if they can work from a location outside the province. Is this OK?

Employee working remotely from outside the province
Colin Gibson

Question: Most of our employees are working remotely during the pandemic. Some have asked if they can work from a location outside the province. Is this OK?

Answer: Since the onset of the COVID-19 pandemic, many employers have taken steps to enable their employees to work remotely. This has proven very successful in many organizations, and it is expected that remote work will continue to be popular after the pandemic.

Employers must be careful, however, to ensure that they have considered the potential risks and legal requirements that may arise if they allow an employee to work remotely from a location outside their home province. These risks can be particularly acute if the employee is not in Canada.

One area that requires close attention is the application of workers’ compensation coverage to an employee who is working remotely from a location outside the province. If that employee is injured at work, the employer may find that its workers’ compensation coverage does not apply.

In British Columbia, for example, s. 147(2) of the Workers’ Compensation Act provides that coverage will only apply to an employee who is injured while working outside the province if all the following criteria are met: a place of business of the worker's employer is located in B.C.; the worker's residence and usual place of employment are located in B.C.; the employment is such that the worker is required to work both in and outside B.C.; and the worker's employment outside B.C. has immediately followed the worker's employment in B.C. by the same employer and has lasted less than six months. Similar requirements exist in other provinces.

If a remote worker is “working from home” from a residence outside the province or is employed in a position that does not normally require them to work both in and outside the province (such as an executive, an administrative assistant or an IT worker) or has been working outside the province for longer than the legislation allows, the employer’s workers’ compensation coverage may not apply. Also, the worker may have an entitlement to claim workers’ compensation coverage under the laws of the jurisdiction where the injury occurred, and the employer may have an obligation to register as an employer in that other jurisdiction in order to be “insured” under that other jurisdiction’s workers’ compensation scheme. If the employer is required to be registered as an employer in the other jurisdiction where their worker is working but does not register, the employer may be subject to sanctions for not having registered, and it may be held liable to cover the cost of the compensation paid to the worker in the other jurisdiction. 

In some U.S. jurisdictions, the worker has a right to sue their employer for compensation for their injuries, and in California, an employer that is not registered with the local workers’ compensation authority while having workers employed in the jurisdiction commits a criminal offence.

Other areas that can create legal risks for an employer with an employee who is working remotely from a location outside the province include the following:

  • the employer may be subject to the employment laws of the other jurisdiction, such as the applicable employment standards legislation
  • the employer’s insurance coverage may not apply to acts and omissions by the employee in the course of their employment
  • the employee may not be eligible for coverage under the employer’s group benefit plan
  • the employee may lose their eligibility for coverage under the applicable provincial health insurance plan if they have been outside the province for more than a specified number of days
  • the employer may be subject to the income tax and other statutory withholding and remittance requirements of the other jurisdiction
  • if the employee is working from a location outside Canada, the employer may find itself in violation of privacy legislation, especially if the employer is a public body that is required to ensure that personal information in its custody and control is stored and accessed only in Canada
  • for workers who are outside Canada, the employer must ensure that the employee is legally authorized under immigration laws to work from the remote location.

To avoid unexpected legal liability, employers should conduct a careful analysis of the risks and requirements before allowing an employee to work remotely from outside the province.

Colin Gibson is a partner with Harris and Company in Vancouver. He can be reached at (604) 891-2212 or [email protected]

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