What is the law regarding W2 contract employees who work for our company in other states?

UPDATED: Sep 30, 2022

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What is the law regarding W2 contract employees who work for our company in other states?

We currently are based in CA but our clients located both here and out of state. We would like to hire our W2 contractors as remote workers in other states. Do we need to have a license to do business in each of those states even though we don’t have a physical presence or can we simply just pay those states’

payroll taxes?

Asked on August 4, 2017 under Employment Labor Law, California


SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 5 years ago | Contributor

You don't need a license to do business in those states if you are not selling anything (goods or services) into or from them; just having remote workers does not obligate or require you to register to do busienss. You do just have to pay their payroll taxes, etc.

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