“Remote” tells you an employee doesn’t come to the office. It says nothing about where they’re allowed to be — and that difference is a legal one. Kevin Pratt, senior managing counsel at Oyster, explains how physical presence, not the contract or the org chart, decides which tax and labor obligations a company takes on.
Let’s say one of your engineers in Texas is moving to California on the first of the month. She mentioned it to her manager the way you’d mention a new apartment, because that’s what it is to her. Nothing about her role changes, but what does change is which state’s employment law her employer now operates under.
Most people assume “remote” and “work from anywhere” mean the same thing. They don’t. Remote means an employee doesn’t have to go into an office; it says nothing about where they’re allowed to be instead. For a company employing people directly, or through an employer-of-record (EOR) arrangement, location is a legal variable and one that is so often considered only after it’s already the subject of a claim, an audit or a tax notice.
A UK employment tribunal made that point recently, ruling against an employee whose contract described their place of work as a home office. She asked to relocate to France and keep the role, or move onto a French contract; her employer said no, more than once. She moved anyway, was dismissed and lost her unfair dismissal claim. The tribunal decided her contract implicitly required UK-based work, based on her UK home address, the phrase “home office” and the UK law references running through the document. It went the employer’s way, but it didn’t have to. Most remote contracts say “home office” or “fully remote” and stop there: Both characterizations describe the setup but don’t establish the legal jurisdiction of employment. The open question is left for someone else, a tribunal or a regulator, to answer later. When you leave someone else to answer a question, you may not like their answer.
A separate pattern is worth watching for anyone using an EOR, staffing or triangular employment structure to place workers across borders. French courts have continued to scrutinize whether the day-to-day reality of an assignment, such as who directs the work, who sets the schedule, who the worker reports to, must align with the legal structure on paper. French courts are increasingly willing to recharacterize the relationship where it doesn’t, attaching employer obligations to whoever is directing the work. Under the EU’s Rome I framework, the law of the place of habitual work generally follows the employee, not the paperwork.
The limits on ‘anywhere’ are legal more than managerial
It’s easy to read a case like the UK tribunal’s as an employer being controlling, but that’s not what happened. Once someone works from a new country, their employer can become subject to that country’s labor law and owe local social security contributions. Tax residency can shift; depending on the role, the business may have created a taxable presence without making the clear choice to do that. The trigger is physical presence, not the contract, the org chart or anyone’s intent.
The same exposure shows up inside single countries far more often than the cross-border version makes headlines. Take the engineer moving from Texas to California: her employer may now owe California daily overtime, meal-and-rest-break compliance, paid sick leave and payroll tax registration. One employee’s home office can be enough to make a company a taxpayer somewhere leadership did not choose to operate. Most companies find out when a departing employee’s counsel asks which state’s law applies, or when someone finally checks the withholding and discovers it’s been wrong for a year.
None of this argues for locking employees to a single address, as that’s a trade-off carrying its own cost in recruiting, retention and morale. What’s more, policies that are too rigid simply push the risk underground. Mobility shouldn’t be restricted by default, but it should be visible by default, so the business chooses where it operates rather than discovering the choice after the fact.
The same principle runs in the other direction, which compliance teams tend to miss: Location also determines when an obligation stops, not just when one starts. Move out of a state or country and the employment rules that applied there generally stop governing the employee going forward, even if the company’s registrations or benefit plans still point back to headquarters.
Part of why this keeps getting missed is structural. An employee updates their address HR portal, which syncs to payroll, but nowhere else — meaning no compliance check, no notice to legal, no comparison against the jurisdictions the company is registered or licensed to employ in. The most legally consequential field in the employee record gets treated as contact information. The same gap can open before someone is even hired: Roles often get advertised as “remote” to widen the applicant pool without confirming which jurisdictions the company can support, whether directly or through an EOR partner’s own licensing footprint, and a candidate in an unsupported location can accept the job before anyone notices there’s a problem.
Human-led, AI-enabled
The answer isn’t another remote-work policy in a handbook. At scale, across the dozens of jurisdictions a growing global workforce touches, the answer is a control that makes location visible the moment it changes, not the moment it’s disputed. That increasingly means pairing rules-based automation with human legal judgment: technology to detect and flag the signal, people to make the call, because the downstream consequences, such as tax presence, benefit continuity, contract enforceability, require human judgment, not automated agentic decision.
In practice, that means:
- Know where you can employ people. Reconcile current employee and contractor locations against the jurisdictions where the company, or its EOR partner, is actually registered and licensed to employ on an ongoing basis, not just at hiring.
- Decide where you will operate. Set a maintained list of supported jurisdictions with an owner. A company doesn’t have to support everywhere, but it has to know in real time where it stands.
- Make location part of the employment relationship. Contracts should specify where work is to be performed and what happens if that changes, rather than relying on a generic “remote” designation a tribunal can interpret in potentially unpredictable ways.
- Make the change trigger something. A location change should reach legal or compliance before payroll simply updates the address. AI-enabled monitoring can flag that signal but shouldn’t make the call. The goal is making sure a person who understands the stakes knows something legally significant just happened, while it’s still cheap to fix.
Remote work isn’t inherently a compliance problem, but this is: not knowing where your workforce is, and not having a control designed to flag risk.
Kevin Pratt is a director and senior managing counsel of commercial legal at Oyster, an employer of record platform. 
