The Future of Remote Work

Posted on July 10, 2025

What California Companies Need to Know to Protect Themselves from Legal Issues

Remote work is no longer an exception; it’s the rule for many businesses in California. While this shift has brought flexibility and productivity gains, it also presents various legal challenges employers must address. California has some of the strictest employment laws in the United States, making it crucial for companies to stay compliant as they adapt to hybrid and remote work models. Human resources consulting companies can offer critical guidance in navigating these complexities. By leveraging HR services and consulting, businesses can ensure they’re following best practices related to wage and hour laws, data privacy, and more. This article explores the legal landscape of remote work and actionable steps companies can take to avoid costly pitfalls.

Key Legal Challenges for California Companies Adopting Remote Work

1. Wage and Hour Compliance

When employees work remotely, tracking hours becomes more complex — yet no less critical. California employers must adhere to strict wage and hour laws, including:

Accurate Time Tracking: Ensure all hours, including overtime, are logged accurately. Remote employees often work outside standard office hours, blurring lines between work and personal time.
Meal and Rest Breaks: California law mandates specific rules for breaks. Businesses must enforce these rules even when employees are not in the office.

Actionable Tip: Use reliable time-tracking software to automate logging and help employees differentiate work from personal time—train managers to oversee compliance while encouraging communication about workload expectations.

Looking for human resources consulting companies to help take the guesswork out of remote work? Contact EQHR Solutions for HR services and consulting.

2. Reimbursement for Remote Work Expenses

California is one of the few states that require employers to reimburse employees for “necessary” expenses incurred while performing their job duties remotely. These can include:

Internet costs
Phone bills
Office supplies
Software or hardware

Failure to reimburse employees can lead to class-action lawsuits and significant penalties.

Actionable Tip: Create a clear reimbursement policy that defines eligible expenses and outlines the process for submitting claims. Regularly update this policy as technology and remote work demands evolve.

3. Data Privacy and Cybersecurity

With remote work, sensitive company data is now accessed across various networks, many of which are less secure than office systems. California’s robust data privacy laws, including the California Consumer Privacy Act (CCPA), require companies to safeguard personal information.

Risks Include:

Unauthorized data access
Phishing attacks aimed at remote employees
Non-compliance with privacy laws, leading to prosecution and fines

Actionable Tip:

Provide employees with secure devices and mandate using Virtual Private Networks (VPNs) for work-related activities.
Offer regular cybersecurity training tailored to remote work scenarios.
Conduct periodic audits to ensure compliance with the CCPA and other regulations.

4. Workplace Safety Beyond the Office

Under California’s Occupational Safety and Health Act (Cal/OSHA), employers must provide a safe working environment — even remotely. Cases of musculoskeletal disorders caused by improper ergonomics or safety incidents in home offices highlight the need for oversight.

Actionable Tip:

Offer ergonomic assessments and financial assistance to help employees set up safe home offices.

Share guidance on workplace safety and encourage employees to report hazards immediately.

Practical Steps to Stay Ahead of Legal Obligations

Step 1. Develop a Comprehensive Remote Work Policy

A written remote work policy minimizes legal risks by clearly outlining expectations and responsibilities. Include the following elements:

Time-tracking protocols
Expense reimbursement processes
Cybersecurity and data privacy guidelines
Equipment and workspace standards

Step 2. Stay Updated with Employment Laws

Legislation around remote work is evolving rapidly, especially in regulation-heavy states like California. Appoint a compliance officer or consult with legal experts to regularly review your practices against evolving labor laws.

California Labor Code Section 2802

Employers must reimburse employees for all necessary expenses related to their job duties. This could include internet, phone, and electricity bills, as well as any other reasonable work expenses for remote workers. Employers should establish clear guidelines to ensure appropriate reimbursement procedures.

Meal and Rest Break Regulations

California mandates that non-exempt employees receive meal and rest breaks during their shifts. Even in remote work settings, employers must track and ensure compliance with these standards and address how breaks are taken within a remote work environment.

Wage and Hour Laws

California has strict wage and hour laws, including overtime requirements. For remote employees, companies must maintain accurate time-tracking systems to ensure compliance with overtime and minimum wage regulations. Remote workers must still be paid for all hours worked, including time outside standard hours if required by the job.

Fair Employment and Housing Act (FEHA)

Under FEHA, California employers must provide reasonable accommodations for remote employees with disabilities. This could involve offering adaptive equipment or modifying workplace expectations to ensure equitable treatment.

California Consumer Privacy Act (CCPA)

Employees often handle sensitive data from personal or home devices while working remotely. Employers must ensure compliance with the CCPA by adopting robust cybersecurity policies, encrypting sensitive information, and conducting regular employee training to prevent data breaches.

By adhering to these California-specific laws, employers can maintain legal compliance while creating a supportive and fair remote work environment.

Step 3. Leverage Technology

Digital tools can streamline compliance. Consider using:

HR Software to track time, process reimbursements, and onboard remote employees.
Legal Tech Solutions will stay current on regulatory changes and provide alerts for specific compliance concerns.
Cybersecurity Tools, such as endpoint management platforms, to monitor and secure remote device usage.

Step 4. Invest in Employee Training

Often overlooked, training is critical to ensuring compliance. Conduct workshops or webinars on topics like:

Time management to align with California’s labor laws
Data handling under CCPA guidelines
Reporting workplace safety concerns

Step 5. Audit Your Practices Regularly

Compliance is not a one-and-done effort. Perform routine audits to:

Verify correct wage and reimbursement processes
Assess cybersecurity protocols
Address any gaps in your remote work policy

Why Proactive Compliance Matters

Failing to address legal requirements proactively can lead to lawsuits, fines, and reputational damage. For example, California employers that neglect to pay all mandated wages or fail to provide expense reimbursements risk class-action lawsuits that can cost millions of dollars. Conversely, businesses prioritizing compliance can reduce liability while fostering employee trust and satisfaction.

Looking Ahead— Adapting to the Future of Work

As remote work evolves, California companies must be prepared for changes in ongoing regulations and workplace norms. Here are a few trends to watch:

Hybrid Work Compliance: Navigating legal differences for employees who split time between the office and remote settings.
Cross-State Employment: Addressing conflicts between California laws and those of other states for out-of-state employees.
AI and Remote Monitoring: As AI becomes a widespread tool for managing remote teams, a balance must be struck between ensuring productivity and respecting privacy.

By staying informed, adhering to state regulations, and implementing strategic policies, California companies can thrive in remote work while mitigating legal risks.

Stay Ahead of Compliance with Human Resources Consulting Companies

Remote work offers incredible opportunities and unique challenges, especially in California’s stringent legal landscape. Employers must tackle issues such as wage compliance, expense reimbursement, data security, and workplace safety head-on. With a proactive approach to policy development, training, and compliance, businesses can protect themselves while empowering employees to excel in remote environments. By staying ahead of legal requirements today, companies can build a resilient workforce for the future.

Contact EQHR Solutions for guidance. 855-461-8808