Navigating Five Key Legal Challenges of Remote Work and Return to Office
Remote and hybrid work models have become prevalent in the U.S. More than half of remote-capable jobs are now performed in a hybrid blend of in-office and remote work, according to Gallup. Another 26% are fully remote.
Just 21% of remote-capable jobs are fully onsite, although some employers are pushing for more in-office presence. Around 30% of companies report that they plan to require full-time office attendance in 2026. Just 10% say they will offer fully remote options.
However, return-to-office (RTO) mandates come with a complex web of legal challenges. Employers face increased risk of discrimination and harassment claims and must navigate laws regulating wages and hours, pay transparency, and more. Remote work comes with its own set of laws and regulations, often spanning multiple jurisdictions.
The laws and regulations related to remote work and RTO vary based on the location of the employer and employees. This article will address five potential issues for employers, including:
- Discrimination
- Harassment
- Compensation equity
- Pay transparency
- Jurisdictional issues
Five Remote Work or RTO Considerations for Employers
1. Discrimination
RTO mandates can result in discrimination claims if they disproportionately disadvantage protected groups. Claims often arise under the Americans with Disabilities Act (ADA) when employers refuse to allow remote work as a reasonable accommodation for employees with disabilities or penalize them for noncompliance.
Rigid RTO policies may indirectly create a disparate impact against women and marginalized groups. Even policies that seem neutral but unfairly affect specific groups can trigger Title VII claims. Inconsistent application of RTO policies is especially problematic. Allowing some employees to remain remote while enforcing strict in-office rules on others can be seen as discriminatory.
Discrimination claims can also arise in the remote work context. Often, these claims stem from proximity bias — the tendency to offer more opportunities to employees who are physically closer to leaders. Given that remote workers are disproportionately women and caregivers, they could have a valid discrimination claim if they are passed over for promotions or subjected to harsher evaluations.
Legal considerations: Employers are advised to consult legal counsel to ensure RTO mandates comply with state and federal anti-discrimination laws and that policies are applied consistently across all workers. Managers should be trained to be mindful of proximity bias and to engage in good-faith dialogue with employees who request accommodations.
2. Harassment
RTO mandates are linked to significant increases in workplace harassment. A 2023 full-time RTO mandate at a major firm saw sexual harassment claims more than double within a year. When employees return to the office, they lose the safety barrier that physical separation provides. In-person power balances are re-established, with the greatest impact on women, younger workers, and those in male-dominated environments.
Microaggressions and inappropriate comments that are reduced in a virtual setting tend to resurface when employees return to a shared space. In-person harassment often occurs without witnesses or documentation, whereas remote work can create a digital trail.
However, harassment can occur virtually via chat, email, or video calls. Nearly 38% of employees have reported experiencing harassment while working remotely. Almost one-fourth say that online harassment tends to persist or worsen, likely because perpetrators are emboldened by a lack of social cues.
Legal considerations: Employers should anticipate the potential for increased harassment when enforcing RTO mandates. They should also update harassment policies to address remote work and provide virtual-specific training. Secure reporting channels should be established for all employees. HR staff and managers should be trained in how to handle complaints and conduct thorough, well-documented investigations.
3. Compensation Equity
Compensation equity is another area fraught with risk. Federal law requires employers to provide equal pay for substantially similar work, regardless of race, gender, or other protected characteristics. Nearly all states also have their own compensation equity laws that often exceed federal standards.
Return-to-office (RTO) mandates often function as an “invisible pay cut” costing employees an average of $561 a month for commuting, childcare, and other expenses. While some employers offer in-office stipends, RTO policies create significant compensation equity challenges by widening wage gaps for caregivers and remote workers.
A growing pay gap exists between fully remote, hybrid, and in-office staff, often due to a lack of visibility and perceptions of lower value for fully remote workers. Additionally, some companies adjust salaries based on the cost of living in a worker’s location rather than the value of the work, potentially reducing pay for those living in lower-cost areas.
Legal considerations: Employers should replace one-size-fits-all rules with models that balance business needs with human realities. Direct subsidies and specialized benefits can mitigate the disproportionate financial burden of RTO on specific groups. Shifting from “hours worked” to measurable, goal-oriented performance metrics can ensure remote workers are rewarded for their actual contributions.
4. Pay Transparency
Several states and cities have enacted or are in the process of implementing pay transparency laws. These rules require employers to disclose salary ranges—and sometimes benefits—in job postings, during the hiring process, or to current employees. Aimed at closing gender and racial wage gaps, these laws empower workers to negotiate better pay and ensure fair compensation.
RTO mandates can expose unequal pay for the same work based on location. Employees forced back to high-cost-of-living areas may demand higher pay to offset commuting and housing costs, making it harder for companies to maintain transparent, uniform pay structures across the organization.
Similarly, paying remote workers based on their location (cost of labor) rather than a flat rate creates equity issues. Failing to properly disclose salary information in job postings for remote roles can lead to compliance risks.
Legal considerations: Employers should create defensible salary ranges for every position based on reliable market data and internal equity. They should also explicitly document the logic behind pay levels, including geographic differentials. It is essential to choose a consistent strategy for remote workers, such as aligning with headquarters, using localized market rates, or setting broad “geographic zones.”
5. Jurisdictional Issues
Organizations with remote workers must comply with employment laws and regulations across multiple jurisdictions. These rules often conflict, creating significant compliance challenges. Discrepancies frequently arise in minimum wage rates, overtime calculations, and paid/unpaid leave entitlements. While federal law sets a baseline of $7.25 an hour, states such as California and New York have much higher minimum wages and stricter overtime rules.
Sick leave and family leave laws vary wildly, and states have different rules on when an employer must pay an employee upon separation. Laws regarding restrictive covenants (non-competes) are increasingly complex, with states such as California strictly prohibiting them while others consider them enforceable.
Some states and cities have specific laws protecting caregivers, which may be violated by rigid, inflexible, in-person requirements. Bringing employees back to a physical office can also change their tax “nexus,” potentially triggering different state income tax requirements or benefits eligibility compared to their remote work location.
Legal considerations: Generally, the law of the state where the employee physically performs the work applies. However, many employers adopt the most restrictive state’s policy across the entire company to ensure compliance. Employers should review practices in every state where they operate and consult with counsel to ensure compliance.
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