Since the pandemic changed the way many of us needed to work, there have been a lot of questions about the legal ramifications of working from home. In many cases, there may be legal restrictions about operating a business from your home. Even working from home may violate certain zoning restrictions in your local area.
In this article, we will try to sort out some of these answers to give you an idea of what is allowed and what isn’t.
What is the Difference between Working from Home vs Running a Business out of my house?
Generally speaking, working from home, or remotely, usually means that you are an employee of another company who is paying you to work at home. Most of this remote work requires nothing more than a computer and an internet connection. While local zoning regulations may require employees that work from home to get a zoning variance from the local authorities, most municipalities are not concerned about remote workers because there is no disruption to the neighborhood.
If you are an owner of a business that allows employees to work remotely, there are a number of work-related age and hour issues to be aware of. One of these is if your employees are classified as exempt or non-exempt.
An exempt employee is not eligible to receive overtime pay and is excluded from minimum wage requirements. One of the main differences between exempt employees and non-exempt employees is that exempt employees receive a salary for the work they perform, while non-exempt employees earn an hourly wage.
Non-exempt remote workers are entitled to pay for hours actually worked (including unscheduled hours and/or unauthorized overtime work), so their accurate recording of all hours worked is critical. Employers should clearly communicate in writing that off-the-clock work. Underreporting of hours and unauthorized overtime is strictly prohibited.
Be aware of other states’ legal requirements for conducting businesses. Some states require a higher minimum wage than others and some states require employers to reimburse employees for any home office expenses.
Running a business from home has a lot of advantages for many people. The flexibility allows them to pick their children up from school in the afternoon and work earlier or later hours that best fit their lifestyle. According to the Small Business Administration (SBA), more than half of the businesses in the U.S. are based out of an owner’s home.
There are three levels of regulations; federal, state, and local. Most business regulations come from the state and local levels. By local, we mean county and city government. Counties and cities are most interested in regulating the location of a business and what business activity is conducted at that location. If you are looking to run a business out of your home, be sure to check your local ordinances. Some forbid commercial activities in residential areas or homeowners association deed restrictions. A number of local ordinances also prohibit excess traffic, customer parking, and the display of commercial signs in residential neighborhoods. Failure to comply with these restrictions could get your business fined or even shut down by the local officials.
You will need to obtain the proper permits for your home-based business. Most businesses need permits to operate for two major reasons; to protect the public and track taxes. Failure for not having a business permit can include tax penalties, legal punishment, and sometimes the closure of your business.
In 2021, trying to keep Florida a business-friendly state, Governor Ron DeSantis signed House Bill 403 into law. According to Bill Herrle, Florida’s Executive Director of the National Federation of Independent Businesses, its main purpose is to “stop local governments from creating a patchwork quilt of confusing and conflicting rules and regulations that would affect home-based businesses beyond ordinary zoning laws and homeowner association rules.” Prior to the passage of the bill, only the resident of the home could be employed in the business. The law allows up to two employees who do not reside in the dwelling to work in the home-based business.
The bill includes criteria that home-based businesses must meet to operate in an area zoned for residential use. These criteria and a full summary of HB 403 can be found here.
I’m Rob Robinson and I have been practicing law in Florida for over 30 years. In 2020, I established a law practice where I could provide the personalized service and high-quality legal service that I would want if I was a client – something you just can’t get at a big firm. As a sole practitioner, every case is handled with the utmost care and attention. Working from home can be rewarding, but it can also be a confusing and complicated process. If you are planning to start a home-based business, or you are an employer thinking about offering remote work, contact my office first.