🇺🇸 KENTUCKY STATE LAW – 2026 UPDATE

Kentucky Remote Work Laws 2026

⚠️Informational only — not legal or tax advice.

Last Updated: December 2025
Applicable Period: 2026 tax year and current employment regulations
Key Characteristic: Employers with remote workers physically located in Kentucky

Kentucky remote work laws and employment regulations guide

Table of Contents

Click any item below to jump to the relevant section

Overview

Kentucky generally follows federal employment standards with some additional state-level requirements. According to available sources, Kentucky operates under an employment-at-will framework and tends to align closely with the Fair Labor Standards Act (FLSA) for many wage and hour provisions.

General Characteristics (2025-2026)

  • State minimum wage: $7.25/hour (follows federal minimum wage)
  • Paid sick leave: Not mandated by state law
  • State income tax: 4% flat rate (as of 2025)
  • Meal/rest breaks: Generally required (see detailed sections)
  • Overtime rules: Follows federal FLSA plus 7th day overtime requirement
  • Workers’ compensation: Required for employers with 1 or more employees

Kentucky has reciprocity agreements with Indiana, Illinois, Ohio, Virginia, West Virginia, Michigan, and Wisconsin for income tax purposes.

Source: Kentucky Labor Cabinet, Kentucky Department of Revenue

Official State Agency Information

Kentucky Labor Cabinet

The Kentucky Labor Cabinet oversees workplace standards, workers’ compensation, and employment-related matters. For specific guidance on how laws apply to your situation, consult the agency directly or legal counsel.

Kentucky Department of Workers’ Claims

Administers workers’ compensation claims and compliance matters.

Kentucky Department of Revenue

Handles employer withholding requirements and tax nexus questions.

Major State Employment Statutes

Kentucky Revised Statutes – Chapter 337: Wages and Hours

Citation: KRS Chapter 337
Official Source: https://apps.legislature.ky.gov/law/statutes/chapter.aspx?id=38885

General provisions as stated in statute:

  • Minimum wage standards (KRS 337.275)
  • Overtime compensation requirements (KRS 337.285)
  • Meal and rest break provisions (KRS 337.355, 337.365)
  • Payment of wages regulations (KRS 337.010-337.070)

Application to Remote Work: These provisions generally apply based on where work is physically performed. Workers performing duties from Kentucky locations would typically be subject to Kentucky wage and hour standards.

Kentucky Revised Statutes – Chapter 342: Workers’ Compensation

Citation: KRS Chapter 342
Official Source: https://apps.legislature.ky.gov/law/statutes/chapter.aspx?id=38886

According to the statute, Kentucky’s workers’ compensation system provides medical and wage replacement benefits for work-related injuries and occupational diseases. The system creates a mutual compromise where employees receive automatic benefits without proving fault, while employers gain immunity from most tort liability.

Coverage generally extends to employers with one or more employees. Specific applicability to remote work situations may require analysis by the Department of Workers’ Claims.

Source: Kentucky Department of Workers’ Claims – “An Overview of Kentucky’s Workers’ Compensation Law”

Kentucky Revised Statutes – Chapter 344: Civil Rights

Citation: KRS Chapter 344
Official Source: https://apps.legislature.ky.gov/law/statutes/chapter.aspx?id=38888

The Kentucky Civil Rights Act prohibits employment discrimination based on protected characteristics. General coverage applies to employers with eight or more employees, with expanded coverage (15+ employees) for disability-related matters.

Employee Classification Standards

Understanding Worker Classification in Kentucky

Worker classification determines eligibility for various protections and benefits. The distinction between employees and independent contractors affects workers’ compensation coverage, unemployment insurance, wage and hour protections, and tax withholding obligations.

Important Note: Classification is a legal and factual determination that should be made with guidance from legal counsel and relevant state agencies. The information below provides general background only.

Kentucky’s Classification Framework

According to the Kentucky Supreme Court and state agencies, Kentucky uses different tests depending on the context:

For Workers’ Compensation Purposes:

The Kentucky Supreme Court developed a six-factor test to determine worker status for workers’ compensation coverage:

  1. Permanency of relationship between the parties
  2. Degree of skill required for the service
  3. Worker’s investment in equipment or materials
  4. Opportunity for profit or loss based on skill
  5. Degree of control the employer has over work performance
  6. Whether the service is integral to the employer’s business

Source: Kentucky Education and Labor Cabinet – “Employee or Independent Contractor Guide”
https://elc.ky.gov/Workers-Compensation/Pages/Employee-Independent-Contractor-Guide.aspx

Economic Dependence Standard:

According to Kentucky guidance, if analysis of these factors reveals the worker is economically dependent on the alleged employer’s business, the worker is generally considered an employee rather than an independent contractor.

The framework focuses on whether the worker has an independent opportunity to pass business costs to consumers. If the worker lacks this independent opportunity, this may indicate employee status.

For Unemployment Insurance:

Kentucky generally applies an economic reality test similar to federal standards, examining whether the worker is economically dependent on a single business or operates independently.

Application to Remote Workers

Remote work arrangements may add complexity to classification analysis:

  • Physical location of work performance vs. business location
  • Nature of control in virtual work environments
  • Degree of integration with company operations despite distance
  • Investment in home office equipment and materials

These factors don’t change the legal tests but may affect how they are applied. Classification of remote workers should be reviewed with Kentucky labor counsel and the Department of Workers’ Claims for workers’ compensation purposes.

General Considerations by Factor

Factor 1 – Permanency of Relationship:

Considerations may include:

  • Whether relationship is ongoing or project-based
  • Expectation of continued work vs. discrete engagement
  • Presence or absence of written contract terms

Factor 2 – Degree of Skill Required:

Considerations may include:

  • Level of specialized knowledge or training needed
  • Whether work requires professional licensure or certification
  • Complexity of tasks performed

Factor 3 – Worker’s Investment:

Considerations may include:

  • Who provides equipment, tools, or software
  • Who bears costs of workspace and utilities
  • Investment in business infrastructure vs. personal items

Factor 4 – Opportunity for Profit or Loss:

Considerations may include:

  • Whether worker can increase earnings through efficiency
  • Whether worker bears risk of business expenses
  • Ability to work for multiple clients simultaneously

Factor 5 – Degree of Control:

Considerations may include:

  • Who determines work schedule and methods
  • Level of supervision and oversight
  • Freedom to refuse assignments or set own processes

Factor 6 – Integral to Business:

Considerations may include:

  • Whether service is central to business operations
  • Role in company’s value proposition to customers
  • Regularity and continuity of the service provided

Illustrative Scenarios

These scenarios are for general educational purposes only and do not constitute classification determinations.

Scenario 1: A software developer works remotely for a Kentucky-based company, using company-provided equipment, following company-set hours, receiving training from the company, and working exclusively for this company for an ongoing period.

This scenario may share characteristics with situations that have been analyzed as employee relationships, including economic dependence on a single company, integration into business operations, and company control over methods and schedule. However, actual classification would depend on complete factual analysis.

Scenario 2: A graphic designer operates their own design business, maintains multiple clients, uses their own equipment and software, sets their own rates and schedules, invoices for completed projects, and markets design services independently.

This scenario may share characteristics with situations analyzed as independent contractor relationships, including independent business operation, multiple clients, and entrepreneurial opportunity for profit or loss. Classification would still require comprehensive review of all circumstances.

Potential Consequences of Misclassification

According to Kentucky agencies and statutes, misclassification may result in:

For Employers:

  • Potential workers’ compensation premium adjustments
  • Possible unemployment insurance tax obligations
  • Potential wage and hour claim exposure
  • Tax withholding and reporting issues
  • Penalties and interest

For Workers:

  • May affect workers’ compensation coverage eligibility
  • May affect unemployment benefit eligibility
  • May affect wage and hour law protections
  • Tax reporting and payment implications

Actual consequences depend on specific circumstances and determinations by relevant agencies.

How to Seek Classification Guidance

Classification questions should be addressed with:

  • Kentucky Department of Workers’ Claims: (502) 564-5550 – for workers’ comp coverage questions
  • Kentucky Office of Unemployment Insurance: (502) 564-2900 – for UI purposes
  • Employment attorney licensed in Kentucky
  • Tax professional familiar with Kentucky and federal requirements
  • IRS for federal tax classification: https://www.irs.gov/

Critical Note: Classification is not determined by job title, written agreement labels, or parties’ preferences. It is a legal conclusion based on the totality of the working relationship. Professional guidance is recommended for classification decisions.

Minimum Wage Information

Current Kentucky Minimum Wage

2025 Rate: $7.25 per hour
2026 Rate: $7.25 per hour (no increase announced)

According to Kentucky Revised Statutes 337.275, Kentucky’s minimum wage is tied to the federal minimum wage set by the Fair Labor Standards Act. If the federal minimum wage increases, Kentucky’s minimum wage automatically adjusts to match.

Source: Kentucky Labor Cabinet
https://labor.ky.gov/

Last Federal Increase: July 24, 2009

Application to Remote Workers

Minimum wage generally applies based on where the work is physically performed. According to general employment law principles:

  • A worker performing duties from a Kentucky location would typically be subject to Kentucky’s minimum wage
  • Employer’s physical location is generally not the determining factor
  • Multi-state remote work may create complex questions requiring legal guidance

For specific situations involving workers in multiple states, consult Kentucky Labor Cabinet and legal counsel.

Tipped Minimum Wage

Tipped Employee Minimum: $2.13 per hour (cash wage)

According to Kentucky law, employers may pay tipped employees a reduced cash wage if:

  • Employees regularly receive more than $30 per month in tips
  • Total compensation (cash wage + tips) equals at least $7.25 per hour

Tip Credit: Maximum $5.12 per hour

Employer Obligation: If an employee’s tips combined with cash wages do not reach $7.25 per hour, the employer must make up the difference.

Source: KRS 337.275; Kentucky Labor Cabinet

Local Minimum Wages

Louisville: As of available information, Louisville does not have a separate local minimum wage higher than the state/federal rate.

Kentucky cities generally follow the state minimum wage. However, employers should verify current requirements with local jurisdictions where employees work, as local ordinances can change.

Exemptions and Special Provisions

Certain categories of workers may be subject to different wage standards:

Youth Minimum Wage: Federal law permits employers to pay workers under 20 years of age a training wage of $4.25 per hour during their first 90 consecutive calendar days of employment.

Applicability: Verify with Kentucky Labor Cabinet whether this federal provision applies to your situation.

Executive, Administrative, and Professional Employees:

Employees meeting specific salary and duties tests under federal and state law may be exempt from minimum wage requirements (as well as overtime). See Employee Classification and Overtime sections for details.

Students and Learners:

Under certain federal provisions, full-time students and learners may be paid subminimum wages with proper certification. Employers must obtain certificates from the Department of Labor.

Workers with Disabilities:

Under Section 14(c) of the FLSA, employers with special certificates may pay subminimum wages to workers with disabilities that affect productivity. Federal certification is required.

Note: The use of 14(c) certificates has faced increasing scrutiny and some states have moved to phase them out. Check current federal and Kentucky guidance.

Comparison with Surrounding States (2025):

State Minimum Wage Notes
Kentucky $7.25 Follows federal rate
Indiana $7.25 Follows federal rate
Illinois $14.00 Significantly higher than federal
Ohio $10.45 Indexed for inflation
Tennessee $7.25 Follows federal rate
West Virginia $8.75 Higher than federal
Virginia $12.00 Higher than federal
Missouri $12.30 Higher than federal

This comparison is for reference only. Each state’s laws apply based on work location.

Enforcement and Complaints

Filing a Wage Complaint:

Workers who believe they have not been paid the required minimum wage may file complaints with:

Kentucky Labor Cabinet – Division of Employment Standards

U.S. Department of Labor – Wage and Hour Division

Resources for Current Information

Note: Minimum wage compliance involves multiple factors including employee classification, tip credit calculations, and proper record-keeping. This information provides general background only. Employers should consult official guidance and legal counsel for compliance questions.

Overtime and Break Requirements

A. Overtime Standards

General Framework:

Kentucky law requires overtime compensation for non-exempt employees. According to Kentucky Revised Statutes 337.285 and regulations from the Kentucky Labor Cabinet, overtime provisions include both federal FLSA standards and additional state requirements.

Standard Overtime Threshold:

  • Trigger: Work exceeding 40 hours in a workweek
  • Rate: 1.5 times the employee’s regular rate of pay
  • Source: KRS 337.285; follows federal FLSA

Kentucky’s Seventh-Day Overtime Rule:

According to Kentucky labor law, employers must also pay overtime at 1.5 times the regular rate for all hours worked on the seventh consecutive day when an employee works seven days in a workweek.

Example for illustration: If an employee works Monday through Sunday (7 consecutive days) in a single workweek, even if they only work 35 total hours, the hours worked on Sunday (the 7th consecutive day) would be paid at the overtime rate.

This provision is in addition to the standard 40-hour weekly overtime requirement.

Source: Kentucky Labor Cabinet – Workplace Standards Regulations

Application to Remote Workers:

Overtime requirements generally apply to remote workers in the same manner as on-site workers, based on the nature of their work and exemption status. Location of work does not typically affect overtime obligations.

Key considerations for remote workers:

  • Hours worked must be accurately tracked and recorded
  • All compensable time counts toward overtime threshold
  • After-hours work communications may constitute compensable time
  • Employer policies should address remote work hour tracking

Overtime Exemptions

Certain employees may be exempt from overtime requirements under federal and Kentucky law.

Common Exemptions:

Executive, Administrative, and Professional (EAP) Exemptions:

To qualify for exemption, employees generally must meet all of the following:

  1. Salary Basis: Paid a predetermined salary not subject to reduction based on quality or quantity of work
  2. Salary Level: Meets minimum salary threshold
  3. Duties Test: Performs exempt-level duties

2026 Federal Salary Threshold: $684 per week ($35,568 annually)
Note: Salary thresholds are subject to change through federal rulemaking.

Source: U.S. Department of Labor – FLSA regulations; Kentucky follows federal standards

Duties Tests (General Framework):

Executive: Primary duty of managing enterprise or department, regularly directs work of two or more employees, has authority to hire/fire or significant input on employment decisions.

Administrative: Primary duty of performing office or non-manual work related to management or business operations, exercises discretion and independent judgment on significant matters.

Professional: Primary duty of work requiring advanced knowledge in a field of science or learning, primarily intellectual in character, requiring exercise of discretion and judgment.

Computer Professional: Specific duties related to systems analysis, programming, software engineering. May be paid on salary or hourly basis ($27.63/hour minimum in 2024).

Important: Job titles do not determine exemption status. All three tests (salary basis, salary level, and duties) must be met. Classification errors can result in significant back pay liability.

Other Common Exemptions:

  • Outside sales employees
  • Certain commissioned employees
  • Some transportation workers
  • Agricultural workers (under certain conditions)

For exemption determinations, consult Kentucky Labor Cabinet, DOL Wage and Hour Division, or legal counsel.

Calculating Compensable Time for Remote Workers

What Generally Constitutes “Hours Worked”:

According to federal and Kentucky guidance, compensable time may include:

  • Time actually performing work duties
  • Required meetings and training (including virtual)
  • Waiting time when required to be available for work
  • Travel time during working hours
  • Certain on-call time depending on restrictions

Remote Work Complications:

Determining compensable time for remote employees can involve unique considerations:

  • After-hours email/messaging: May be compensable if employee is required or expected to respond
  • On-call time at home: Depends on restrictions placed on employee’s activities
  • Brief interruptions: Short periods (5-20 minutes) are generally compensable
  • Logging in outside hours: Even brief work periods must be counted

Employers should establish clear policies about:

  • Expected work hours and availability
  • After-hours communication expectations
  • Time tracking requirements for remote workers
  • Process for reporting all time worked

Consult wage-hour counsel for policy development and compliance.

B. Meal and Rest Break Requirements

Kentucky State Requirements:

Unlike many states, Kentucky law mandates both meal and rest breaks for employees.

Rest Break Requirements:

According to KRS 337.355, Kentucky requires:

  • Duration: At least 10 minutes
  • Frequency: For every 4 hours worked
  • Paid Status: Must be paid time
  • Activities: Employee should not be required to perform work duties during rest breaks

Example: An employee working an 8-hour shift would be entitled to at least two 10-minute paid rest breaks (one for each 4-hour period).

Breaks lasting between 5-20 minutes are generally considered part of the workday and must be paid.

Source: KRS 337.355; Kentucky Labor Cabinet

Meal Break Requirements:

According to KRS 337.365, Kentucky requires:

  • Duration: Reasonable period (commonly 30 minutes)
  • Trigger: Work period of 7.5 hours or more (some sources indicate meal shifts vary by length)
  • Timing: Generally between the third and fifth hour of the shift
    • Cannot be required before 3 hours into shift
    • Cannot be provided after 5 hours of continuous work
  • Paid Status: May be unpaid if employee is completely relieved of all duties

Key Requirement: For a meal break to be unpaid, the employee must be:

  • Completely free from duties
  • Free to leave the workstation
  • Not required to remain on premises (unless safety or other valid reasons apply)

If an employee performs any work during a meal break, the entire break must be paid.

Application to Remote Workers:

Break requirements generally apply to remote workers performing work from Kentucky locations. However, compliance verification can be challenging in remote settings.

Considerations:

  • Clear communication of break entitlements
  • Systems to ensure breaks are actually taken
  • Documentation that employees are not working during unpaid meal breaks
  • Handling interruptions during breaks (work calls/emails)

Employers may want to implement:

  • Time tracking systems that prompt for breaks
  • Written policies on break procedures
  • Training on recording breaks properly
  • Clear guidance on handling work communications during breaks

Minors (Under 18):

Minors are required to receive a 30-minute lunch break for every 5 hours of continuous work.

Source: Kentucky child labor regulations

Restroom Breaks:

While Kentucky law does not explicitly regulate restroom breaks beyond OSHA’s general workplace safety requirements, employers must provide reasonable access to restrooms. This applies to both on-site and remote workers.

Denying reasonable restroom access may violate federal OSHA standards and could constitute unsafe working conditions.

Enforcement and Violations

Filing Complaints:

Employees who believe their employer has violated break or overtime requirements may file complaints with:

Kentucky Division of Wages and Hours

U.S. Department of Labor – Wage and Hour Division

Kentucky law prohibits retaliation against employees for filing wage and hour complaints or inquiring about their rights.

Workers' Compensation Overview

Legal Framework

Statutory Authority: Kentucky Revised Statutes Chapter 342
Administering Agency: Kentucky Department of Workers’ Claims
Website: https://elc.ky.gov/Workers-Compensation/
Phone: (502) 564-5550
Address: 657 Chamberlin Avenue, Frankfort, KY 40601

General Coverage Requirements

According to KRS Chapter 342, Kentucky’s workers’ compensation system generally requires:

Coverage Threshold: Employers with one (1) or more employees must maintain workers’ compensation insurance.

This is a notably low threshold compared to many states. Unlike states that exempt very small employers, Kentucky requires coverage from the first employee.

Source: KRS 342.340; Kentucky Department of Workers’ Claims

Exemptions:

Certain categories may be exempt from mandatory coverage, potentially including:

  • Some agricultural workers
  • Certain domestic workers in private homes
  • Some railroad and maritime workers covered by federal programs
  • Certain religious organization workers
  • Independent contractors (if properly classified)
  • Employees who file valid Form 4 waivers (see below)

Coverage requirements are fact-specific. Employers uncertain about obligations should consult the Department of Workers’ Claims.

Form 4 Waiver

Employee Waiver Option:

According to Kentucky law (KRS 342.395), employees may voluntarily reject workers’ compensation coverage by filing a Form 4 Waiver with the Department of Workers’ Claims.

Key Points:

  • Waiver must be completely voluntary
  • Cannot be required as condition of employment
  • If employer requires waiver, penalties may apply
  • Employee retains right to sue employer for negligence if waived
  • Waiver remains effective until voluntarily withdrawn

Important: Employers cannot legally require employees to sign Form 4 waivers. Doing so may result in civil penalties.

Source: KRS 342.395; Kentucky Department of Workers’ Claims Guidebook

Kentucky’s Workers’ Compensation System

System Type: Kentucky operates a competitive insurance system, meaning:

  • Employers may purchase coverage from private insurance carriers
  • Employers may self-insure if they meet financial requirements
  • No exclusive state fund requirement

Self-Insurance Option:

Larger employers may apply to self-insure by demonstrating financial capacity. Application Form SI-02 must be submitted to the Department of Workers’ Claims.

Requirements are stringent and typically limited to financially substantial companies.

Benefits Generally Available

According to KRS Chapter 342, workers’ compensation benefits may include:

Medical Benefits:

  • Medical treatment for work-related injury or illness
  • Surgical and hospital care
  • Nursing services
  • Medical supplies and equipment
  • Medications prescribed for injury
  • Rehabilitation services

Medical benefits are generally provided without caps or time limits as long as treatment is reasonable and necessary.

Income Benefits:

Temporary Total Disability (TTD):

  • Provided when employee cannot work due to injury
  • Generally equals two-thirds (66.67%) of average weekly wage
  • Waiting period: Benefits begin after 7 days of disability
  • If disability exceeds 14 days, first 7 days are compensated retroactively
  • Maximum and minimum benefit amounts adjusted annually

Permanent Partial Disability (PPD):

  • Provided when employee has permanent impairment
  • Amount based on impairment rating and wage
  • Paid according to statutory schedule

Permanent Total Disability (PTD):

  • For employees unable to return to any substantial gainful employment
  • Continues as long as disability persists
  • Subject to periodic review

Death Benefits:

If work-related injury results in death:

  • Lump sum payment to estate for burial expenses
  • Income benefits to surviving spouse and dependents
  • Amounts adjusted annually based on statutory formula

Source: KRS Chapter 342; Department of Workers’ Claims Guidebook

Remote Worker Coverage – Complex Area

General Legal Standard:

Workers’ compensation in Kentucky covers injuries that “arise out of and in the course of employment.” Application to remote workers involves fact-specific analysis.

Factors That May Be Relevant:

According to case law and agency guidance, considerations may include:

  • Whether employee was performing work duties at time of injury
  • Whether injury occurred in designated work area
  • Whether injury occurred during work hours
  • Whether activity was authorized or required by employer
  • Whether activity served employer’s business interests
  • Relationship between work and injury

No single factor is determinative. Each case requires individual analysis.

Illustrative Scenarios:

These examples are for general educational purposes only and do not constitute coverage determinations. Actual coverage depends on complete circumstances and official determination by the Department of Workers’ Claims.

Scenario 1 – Work-Related Activity in Home Office:

Employee trips over computer cables while retrieving work documents from their dedicated home office during scheduled work hours.

General observations: This scenario shares some characteristics with situations that have been found compensable in various contexts, such as:

  • Activity was work-related (retrieving documents)
  • Occurred in designated work area
  • During work hours
  • Direct connection to job duties

However, compensability would depend on:

  • Whether home office was officially designated
  • Employer’s knowledge of and participation in setup
  • Nature of employer’s control over workspace
  • Other specific facts

This is not a coverage determination. Actual determination would be made by the Department of Workers’ Claims based on all circumstances.

Scenario 2 – Equipment-Related Injury:

Employee develops carpal tunnel syndrome after months of computer work performed remotely for employer.

General observations: Occupational diseases and repetitive stress injuries may potentially be compensable when they arise from employment. Considerations include:

  • Medical evidence of work-relatedness
  • Nature and extent of work activities
  • Whether condition arose from employment
  • Comparison to non-occupational risk factors

Classification as occupational disease requires medical documentation and factual analysis. Consult medical professionals and Department of Workers’ Claims.

Scenario 3 – Personal Comfort Activity:

Employee injured while preparing lunch in home kitchen during unpaid meal break.

General observations: Personal comfort activities unrelated to work duties are less likely to be considered work-related based on general principles. However, analysis includes:

  • Whether employee was completely relieved of duties
  • Whether activity location matters (home vs. workplace)
  • Whether any work element was involved
  • Specific circumstances

Not a determination of coverage or non-coverage.

Critical Reminders:

  • Every claim is unique and fact-dependent
  • Coverage determinations are made by Department of Workers’ Claims
  • Administrative law judges make decisions based on evidence
  • Medical evidence and witness testimony are critical
  • Legal representation may be beneficial for disputed claims

Reporting and Claim Process

For Employees:

According to Kentucky regulations:

  1. Report injury to employer: Immediately or as soon as practical
  2. Seek medical attention: Obtain treatment and medical documentation
  3. File claim: May be done online or by mail
    • Online: Through Department of Workers’ Claims website
    • Form: Form 101 (Application for Resolution of Injury Claim)
    • Deadline: Generally within 2 years of injury date or discovery

Statute of Limitations: 2 years from date of injury or discovery of occupational disease to file claim.

Missing deadlines may bar recovery. When in doubt, file promptly and seek legal counsel.

For Employers:

  1. Provide first aid if needed
  2. Report to insurance carrier immediately
  3. File First Report of Injury: Form 3 must be filed with Department of Workers’ Claims
    • Deadline: Within 7 days of notice of injury
    • Late reporting may result in penalties
  4. Cooperate with claim investigation
  5. Maintain records of injury and treatment

Contact for Filing:

Kentucky Department of Workers’ Claims

Penalties for Non-Compliance

Failure to Maintain Coverage:

Employers who fail to maintain required workers’ compensation insurance face:

  • Fines: $100 to $1,000 per employee per day without coverage
  • Uninsured Employers’ Fund (UEF) liability: If employee receives benefits from UEF, employer must reimburse fund
  • Civil lawsuit exposure: Uninsured employers lose immunity from employee lawsuits
    • Employees may sue for pain and suffering
    • Punitive damages may be available
    • No caps on damages

Source: KRS 342.990; Department of Workers’ Claims

Best Practices for Remote Work

These are general recommendations from various sources, not legal requirements. Suitability depends on individual circumstances.

For Employers:

  • Consider documenting designated remote work locations
  • Consider providing ergonomic guidance or equipment
  • Develop clear injury reporting procedures for remote workers
  • Consider safety training for remote work environments
  • Maintain detailed job descriptions and work requirements
  • Document remote work policies and expectations

For Remote Employees:

  • Report all work-related injuries promptly, regardless of severity
  • Document work areas and setup
  • Maintain clear boundaries between work and personal activities
  • Follow employer safety guidelines
  • Seek medical attention for work-related injuries
  • Keep records of work hours and activities

Leave Requirements

Overview

Kentucky does not mandate most types of paid leave. However, specific unpaid leave protections exist under federal law, and employers may voluntarily provide leave benefits.

State-Mandated Leave

Paid Sick Leave: Not required by Kentucky law

Vacation Leave: Not required by Kentucky law

Paid Holidays: Not required by Kentucky law

Personal Days: Not required by Kentucky law

Kentucky law does not require employers to provide paid time off for illness, vacation, holidays, or personal reasons. Provision of these benefits is at employer discretion.

However: If an employer chooses to provide paid leave benefits, they must comply with their own policies and any promises made in handbooks or employment agreements.

Military Leave

Kentucky National Guard Members:

According to Kentucky law (KRS 61.394), employees who are members of the Kentucky National Guard are entitled to:

  • Unlimited unpaid leave for active duty or training
  • Job restoration: Right to return to former position upon completion of duty
  • Benefits continuation: Benefits generally continue during leave
  • Protection from retaliation: Employers cannot discriminate or retaliate for military service

Federal Protections – USERRA:

The federal Uniformed Services Employment and Reemployment Rights Act (USERRA) provides broader protections for all military service members, including:

  • Job restoration rights after military service (up to 5 years)
  • Protection from discrimination based on military status
  • Continuation of health benefits during leave
  • Pension benefit protections

Source: 38 U.S.C. § 4301 et seq.; KRS 61.394

Jury Duty Leave

Kentucky Law (KRS 29A.160):

Employers generally cannot discharge, threaten, or coerce employees because of jury duty service. Employees summoned for jury duty are entitled to time off to serve.

Paid vs. Unpaid: Kentucky law does not require employers to pay employees during jury duty leave. Payment is at employer discretion unless otherwise agreed.

Voting Leave

Kentucky does not have a specific statute requiring employers to provide time off for voting. However, best practices suggest accommodating employees’ voting needs, particularly if work schedules prevent voting during polling hours.

Witness Leave

Employees summoned as witnesses in legal proceedings may be entitled to time off. Kentucky law protects employees from retaliation for complying with valid subpoenas.

Federal Leave Protections

While Kentucky doesn’t mandate most leave, federal laws provide important protections:

Family and Medical Leave Act (FMLA):

Coverage: Employers with 50+ employees

Employee Eligibility: Employees who have:

  • Worked for employer at least 12 months
  • Worked at least 1,250 hours in past 12 months
  • Work at location with 50+ employees within 75 miles

Leave Entitlement: Up to 12 weeks unpaid leave per year for:

  • Birth/adoption of child
  • Care for spouse, child, or parent with serious health condition
  • Employee’s own serious health condition
  • Qualifying exigency related to military deployment

Military Caregiver Leave: Up to 26 weeks for care of covered military member

Job Protection: Right to return to same or equivalent position

Benefits: Health insurance continues during leave

Remote Worker Application: FMLA eligibility for remote workers is calculated based on their assigned work location. The 50-employee threshold considers employees within 75 miles of that location.

Source: 29 U.S.C. § 2601 et seq.; U.S. Department of Labor

Americans with Disabilities Act (ADA):

While not technically a “leave law,” the ADA requires employers to provide reasonable accommodations for qualified individuals with disabilities, which may include:

  • Modified work schedules
  • Intermittent leave
  • Extended medical leave as accommodation
  • Flexible start times

Applies to employers with 15+ employees.

Breastfeeding Accommodation

Federal Requirement (FLSA):

Employers must provide:

  • Reasonable break time for nursing mothers to express milk
  • Private location (not a bathroom) for expressing milk
  • For up to one year after child’s birth

Kentucky Provisions (KRS 337.351):

Kentucky law supports breastfeeding accommodation by requiring employers to provide:

  • A room or location (not a restroom) with a door
  • Privacy during breastfeeding or milk expression
  • Location in reasonable proximity to work area

Adequate conditions means a space with privacy that is not a bathroom stall.

Support Resources: Each Kentucky District/Health Department has a Breastfeeding Promotion Coordinator who can provide guidance to employers.

Source: KRS 337.351; 29 U.S.C. § 207(r)

Child Labor Restrictions on Hours

While not traditional “leave,” child labor laws limit when minors can work:

Ages 14-15:

  • School in session: Maximum 18 hours/week, 3 hours/day
  • School not in session: Maximum 40 hours/week, 8 hours/day
  • Hours: 7 AM – 7 PM (9 PM June 1 – Labor Day)

Ages 16-17:

  • School in session: Maximum 30 hours/week (may work more with proper certification and parent consent)
  • School not in session: No maximum
  • Hours: 6 AM – 10:30 PM (school nights), 6 AM – 1 AM (non-school nights)

All minors under 18 require 30-minute lunch break for every 5 hours worked.

Final Pay Upon Termination

While not “leave,” Kentucky law regulates timing of final paychecks:

Requirement: Final wages must be paid by the later of:

  • Next regular pay period, OR
  • 14 days following termination

This applies to both voluntary resignations and involuntary terminations.

Unused PTO: Kentucky law does not require payout of unused vacation or PTO upon termination unless employer policy or contract provides for it.

Source: KRS 337.055

Anti-Discrimination Laws

Kentucky Civil Rights Act

Statutory Authority: Kentucky Revised Statutes Chapter 344
Enforcing Agency: Kentucky Commission on Human Rights
Website: https://kchr.ky.gov/
Phone: (502) 595-4024 / 1-800-292-5566

Coverage and Applicability

The Kentucky Civil Rights Act (KCRA) prohibits employment discrimination based on protected characteristics.

General Coverage:

  • Employers with 8 or more employees for most protected classes
  • Employers with 15 or more employees for disability discrimination

Protected Characteristics under KCRA:

  • Race
  • Color
  • Religion
  • National origin
  • Sex (including pregnancy, childbirth, and related medical conditions)
  • Age (40 and older)
  • Disability

Note: Kentucky law does not currently include sexual orientation or gender identity as protected classes at the state level, though some local ordinances (like Louisville) may provide additional protections.

Source: KRS 344.040; Kentucky Commission on Human Rights

Prohibited Discriminatory Practices

According to the KCRA, employers generally cannot:

In Hiring:

  • Refuse to hire based on protected characteristics
  • Use discriminatory job postings or advertisements
  • Ask prohibited questions during interviews
  • Apply different hiring standards based on protected class

In Employment Terms:

  • Pay different wages based on protected characteristics
  • Provide different benefits or working conditions
  • Use different standards for promotion or advancement
  • Apply different disciplinary standards

In Termination:

  • Discharge employees based on protected characteristics
  • Construct reductions-in-force to target protected groups
  • Apply different termination standards

Sex Discrimination and Pregnancy

Sex discrimination includes discrimination based on:

  • Gender/sex
  • Pregnancy
  • Childbirth
  • Related medical conditions

Pregnancy Protections: According to Kentucky law, employers cannot:

  • Refuse to hire because of pregnancy
  • Terminate employment due to pregnancy
  • Force pregnant employees to take leave
  • Treat pregnancy differently than other temporary disabilities

Reasonable accommodations for pregnancy-related conditions may be required similar to disability accommodations.

Age Discrimination

Protection Threshold: Age 40 and older

The KCRA prohibits age-based discrimination against individuals 40 and older. This includes:

  • Refusing to hire older workers
  • Mandatory retirement ages (with limited exceptions)
  • Age-based harassment or hostile work environment
  • Reducing older workers’ benefits without justification

Federal Law: The federal Age Discrimination in Employment Act (ADEA) also protects workers 40+, applying to employers with 20+ employees.

Disability Discrimination

Coverage: Employers with 15+ employees

Protected Individuals:

  • Persons with physical or mental impairments that substantially limit major life activities
  • Persons with a record of such impairment
  • Persons regarded as having such impairment

Key Protections:

Reasonable Accommodation: Employers must provide reasonable accommodations for qualified individuals with disabilities unless doing so would create undue hardship.

Accommodations may include:

  • Modified work schedules or duties
  • Accessible workspaces (relevant for remote work)
  • Assistive technology or equipment
  • Remote work arrangements (when feasible)
  • Leave as accommodation

Interactive Process: Employers should engage in an interactive dialogue with employees requesting accommodations to identify effective solutions.

Direct Threat: Employers may consider whether an individual poses a direct threat to health or safety that cannot be eliminated through reasonable accommodation.

Source: KRS 344.040; federal ADA (42 U.S.C. § 12101 et seq.)

Harassment and Hostile Work Environment

Harassment based on protected characteristics is prohibited. This includes:

Quid Pro Quo Harassment: Making employment decisions contingent on submission to unwelcome conduct

Hostile Work Environment: Severe or pervasive unwelcome conduct that creates an intimidating, hostile, or offensive work environment

Remote Work Context: Harassment protections apply to remote workers. Harassment can occur through:

  • Virtual meetings and video calls
  • Email and messaging platforms
  • Phone conversations
  • Any work-related communication

Employers should have clear anti-harassment policies covering virtual work environments.

Retaliation Protection

Kentucky law prohibits retaliation against employees who:

  • File discrimination complaints
  • Participate in investigations
  • Oppose discriminatory practices
  • Request reasonable accommodations
  • Exercise rights under civil rights laws

Retaliation can include:

  • Termination or demotion
  • Reduction in pay or hours
  • Unfavorable job assignments
  • Negative performance reviews
  • Creating hostile work environment

Application to Remote Workers

Anti-discrimination laws apply equally to remote workers. Protected status does not change based on work location.

Key Considerations for Remote Work:

Hiring: Cannot discriminate in hiring remote positions based on protected characteristics

Accommodations: Remote work itself may be a reasonable accommodation for some disabilities. Employers should consider remote work requests as potential accommodations.

Equal Treatment: Remote workers must receive equal treatment regarding pay, benefits, promotions, and opportunities

Harassment Prevention: Anti-harassment policies must extend to virtual work environments

Filing Discrimination Complaints

Kentucky Commission on Human Rights:

  • Phone: (502) 595-4024 / 1-800-292-5566
  • Website: https://kchr.ky.gov/
  • File online or by mail
  • Deadline: Generally 180 days from discriminatory act

Equal Employment Opportunity Commission (EEOC):

  • Phone: 1-800-669-4000
  • Website: https://www.eeoc.gov/
  • Deadline: Generally 300 days in states with FEPAs (like Kentucky)

Dual Filing: Kentucky and EEOC have work-sharing agreement. Filing with one often satisfies requirements for both.

Federal Anti-Discrimination Laws

In addition to Kentucky law, federal protections include:

Title VII of the Civil Rights Act (employers with 15+ employees):

  • Prohibits discrimination based on race, color, religion, sex, national origin
  • Supreme Court Bostock decision includes sexual orientation and gender identity under “sex”

Americans with Disabilities Act (employers with 15+ employees):

  • Prohibits disability discrimination
  • Requires reasonable accommodations

Age Discrimination in Employment Act (employers with 20+ employees):

  • Prohibits age discrimination for workers 40+

Equal Pay Act (all employers covered by FLSA):

  • Prohibits wage discrimination based on sex

Genetic Information Nondiscrimination Act:

  • Prohibits discrimination based on genetic information

Tax Information for Remote Work

Kentucky Income Tax

Individual Income Tax Rate: 4.0% flat rate (as of 2025)

Kentucky transitioned to a flat income tax rate in recent years, simplifying tax calculation compared to previous graduated rate structure.

Source: Kentucky Department of Revenue
https://revenue.ky.gov/

Employer Withholding Requirements

Registration Requirement:

Employers with employees working in Kentucky must register for withholding tax through:

Kentucky Online Gateway (KOG):

Source: Kentucky Department of Revenue
Phone: (502) 564-1900 (Compliance Section)

Withholding for Remote Workers

General Rule: Withholding is generally based on where the work is physically performed, not where the employer is located.

Key Principle: An employee performing work from a Kentucky location generally requires Kentucky income tax withholding, regardless of employer location.

Tax Reciprocity Agreements:

Kentucky has income tax reciprocity agreements with the following states:

  • Illinois
  • Indiana
  • Michigan
  • Ohio
  • Virginia
  • West Virginia
  • Wisconsin

What This Means:

If an employer is based in a reciprocal state and has Kentucky-resident employees working remotely from Kentucky, the employer generally:

  • Does NOT need to withhold Kentucky income tax
  • Continues withholding for the employer’s home state
  • Employee files in their resident state only

Example: An Ohio-based employer with a Kentucky-resident employee working remotely from Kentucky would continue Ohio withholding only, due to reciprocity.

Important: Reciprocity applies to employees who are residents of one state working for employers in reciprocal states. Verify specific circumstances with Kentucky Department of Revenue.

Source: Kentucky Department of Revenue; reciprocity agreements

Non-Reciprocal States:

For states without reciprocity agreements (Tennessee, Missouri, and all other states), employers may need to:

  1. Register in Kentucky for withholding
  2. Withhold Kentucky income tax for work performed in Kentucky
  3. Employee may need to file returns in multiple states
  4. Employee may claim credit for taxes paid to other states

Nexus Considerations

Tax Nexus: Having employees working in Kentucky may create tax obligations for out-of-state employers.

What Creates Nexus:

According to general principles and Kentucky guidance:

  • Physical presence of employees in Kentucky
  • Employees performing services from Kentucky locations
  • Even a single remote employee may create nexus

Potential Obligations:

  • Income tax nexus and filing requirements
  • Sales tax nexus (if applicable to business)
  • Business registration requirements

Note: Kentucky indicated it would consider nexus impacts of remote work arrangements on a case-by-case basis. Employers should consult Kentucky Department of Revenue for specific guidance.

Public Law 86-272 Protection:

This federal law provides limited protection from income tax for:

  • Out-of-state businesses whose only activity is solicitation of orders
  • For tangible personal property
  • Orders sent out-of-state for approval
  • Filled from out-of-state locations

Limitations:

  • Does not apply to services
  • Does not apply to intangibles
  • Only protects from income tax (not other taxes)
  • Does not apply if other business activities occur in state

Remote employees performing services beyond mere solicitation may not be protected by P.L. 86-272.

Local Occupational Taxes

Important: Many Kentucky cities and counties impose local occupational license taxes on both employers and employees.

Common Local Taxes:

Louisville Metro: Occupational license tax on wages and net profits

Lexington: Occupational license fee

Other Jurisdictions: Many Kentucky cities have local taxes

Rates: Typically range from 1% to 2.5% of wages/profits

Remote Work Complication: Determination of which jurisdiction’s tax applies when employee works remotely can be complex. Some jurisdictions tax based on:

  • Work location
  • Employer location
  • Resident location
  • Hybrid approaches

Guidance: Local tax issues related to remote work remain evolving. Employers should:

  • Identify all jurisdictions where employees work
  • Contact local revenue departments for guidance
  • Consult tax professionals for multistate remote work
  • Maintain detailed location records for employees

Unemployment Insurance

Registration Requirement:

Employers with Kentucky employees must register for unemployment insurance if they have:

  • At least $1,500 in gross wages in any quarter, OR
  • One or more employees for at least 20 weeks during the year (full or part weeks)

Remote Workers: Employers with remote workers in Kentucky who meet these thresholds must register and pay Kentucky unemployment insurance taxes.

Source: Kentucky Office of Unemployment Insurance
https://uiclaims.ky.gov/

Filing Requirements

Employer Withholding Tax Returns:

Kentucky requires employers to file withholding returns:

  • Monthly: For larger employers
  • Quarterly: For mid-size employers
  • Annually: For smaller employers

Filing frequency is assigned based on withholding amount.

Annual Wage and Tax Statements:

  • W-2 filing deadline: January 31
  • Must file with Kentucky Department of Revenue
  • Electronic filing required for 50+ employees

Source: Kentucky Department of Revenue
Phone: (502) 564-1900

Employee Considerations

Kentucky Residents Working Remotely:

For Reciprocal State Employers: Generally file only in Kentucky (resident state)

For Non-Reciprocal State Employers: May need to file in multiple states

  • File in work state (where income was taxed)
  • File in Kentucky (resident state)
  • Claim credit for taxes paid to other state

Non-Residents Working in Kentucky:

Must generally pay Kentucky income tax on income earned from Kentucky-based work, unless protected by reciprocity.

Remote Work Considerations

Legal Framework for Remote Employment

Kentucky law does not have remote-work-specific statutes. General employment laws apply to remote workers based on where work is performed.

Key Principle: Physical location of work performance typically determines which state’s laws apply for most employment law purposes.

Wage and Hour Compliance for Remote Workers

Challenges:

Time Tracking: Employers must accurately track all hours worked by non-exempt remote employees, including:

  • Regular work hours
  • Overtime hours
  • Break periods
  • After-hours work communications

Compensable Time Issues:

  • Brief email responses outside hours
  • Attending virtual meetings
  • On-call availability
  • Training and required readings

Best Practices:

  • Implement clear time reporting systems
  • Require employees to report all time worked
  • Establish policies on after-hours communications
  • Train managers on compensable time rules
  • Use technology to track work time accurately

Equipment and Expenses

Kentucky Law: Does not require employers to reimburse remote workers for business expenses such as internet, phone, or home office equipment.

Federal Law: No general federal requirement for expense reimbursement.

However:

  • Employers cannot shift business costs to employees in a way that reduces pay below minimum wage
  • Some positions may have specific requirements
  • Employer policies may provide for reimbursement
  • Union contracts may require reimbursement

Recommendation: Establish clear policies about what equipment/expenses employer provides vs. employee responsibility.

Workplace Safety for Remote Workers

OSHA Applicability:

Federal OSHA standards generally apply to remote work locations, but with practical limitations:

  • OSHA does not conduct home office inspections for remote workers
  • Employers are not liable for home office hazards beyond their control
  • Employers should provide ergonomic guidance
  • Employers should respond to employee safety concerns

Workers’ Compensation: As discussed in Part 2, work-related injuries may be covered regardless of location. Proper injury reporting procedures are essential.

Data Security and Privacy

Considerations for Remote Work:

Data Protection: Employers should implement:

  • Secure VPN connections
  • Password policies and multi-factor authentication
  • Encryption for sensitive data
  • Secure file sharing protocols
  • Regular security training

Privacy: Balance between:

  • Employer’s need to monitor work and protect data
  • Employee privacy expectations in home
  • Clear policies on monitoring practices

Bring Your Own Device (BYOD): Policies should address:

  • Security requirements for personal devices
  • Company access to personal devices
  • Data separation and wiping protocols
  • Liability for lost or stolen devices

Employer Registration Requirements

Foreign Entity Registration:

Out-of-state employers hiring Kentucky employees may need to register as a foreign entity with:

Kentucky Secretary of State
Website: https://sos.ky.gov/
Phone: (502) 564-3490

Certificate of Authority may be required before conducting business and hiring in Kentucky.

Multi-State Remote Workforce Complexity

Employers with remote workers in multiple states face:

Compliance Challenges:

  • Different wage and hour laws per state
  • Various leave requirements
  • Multiple tax jurisdictions
  • Different discrimination protections
  • Varied workers’ compensation systems

Strategic Considerations:

  • Centralized HR compliance systems
  • State-by-state policy documentation
  • Regular training on multistate requirements
  • Technology solutions for tax and payroll
  • Legal counsel familiar with multistate employment

Non-Compete and Restrictive Covenants

Kentucky Law: Generally enforces reasonable non-compete agreements

Requirements for Enforceability:

  • Supported by adequate consideration
  • Reasonable in scope (time, geography, activities)
  • Necessary to protect legitimate business interests
  • Not unduly burdensome on employee
  • Not contrary to public interest

Remote Work Consideration: Geographic restrictions may be difficult to apply to remote workers. Courts evaluate reasonableness based on circumstances.

Recent Developments: Monitor federal developments regarding non-compete restrictions, as FTC proposed rule (currently stayed) could affect enforceability.

Medical Cannabis

Kentucky Medical Cannabis Program: Effective January 1, 2025

Key Points for Employers:

According to Senate Bill 47 (2023):

  • Medical cannabis is legal for qualified patients
  • Employers are NOT required to accommodate use, consumption, or possession in the workplace
  • Employers may maintain drug-free workplace policies
  • Employers may prohibit medical cannabis use by employees
  • Drug testing policies may remain in effect
  • Employers can discipline for workplace impairment

Workers’ Compensation Impact: If employee fails drug test after workplace injury, employer may not be liable for compensation.

Source: SB 47 (2023); Kentucky medical cannabis regulations

Resources

State Agencies

Kentucky Labor Cabinet

Division of Employment Standards

  • Wage and Hour: (502) 564-3534

Kentucky Department of Workers’ Claims

Kentucky Department of Revenue

Kentucky Office of Unemployment Insurance

Kentucky Commission on Human Rights

Kentucky Secretary of State

Federal Agencies

U.S. Department of Labor

Equal Employment Opportunity Commission

Internal Revenue Service

Occupational Safety and Health Administration

Legal Assistance

Kentucky Bar Association

Legal Aid Organizations (for employees who qualify):

Frequently Asked Questions

General Employment Questions

Q: Is Kentucky an at-will employment state?

A: Yes, Kentucky follows employment-at-will doctrine. This generally means either employer or employee may terminate the employment relationship at any time, for any lawful reason or no reason, with or without notice. Exceptions include:

  • Discrimination based on protected characteristics
  • Retaliation for protected activities
  • Violation of public policy
  • Employment contracts that modify at-will status
  • Union collective bargaining agreements

Q: Do I need to provide a reason for terminating an employee in Kentucky?

A: Kentucky law generally does not require employers to provide a reason for termination, due to at-will employment. However:

  • Document legitimate business reasons when possible
  • Avoid discriminatory or retaliatory reasons
  • Follow your own policies if they require documented reasons
  • Consider that employee may file for unemployment or other claims

Consult HR counsel for termination decisions, especially for potential legal risk situations.

Wage and Hour Questions

Q: Can I pay remote workers in Kentucky less than the minimum wage if I’m based in another state?

A: No. Workers performing work from Kentucky locations must generally be paid at least Kentucky’s minimum wage ($7.25/hour), regardless of employer location. The location where work is physically performed typically determines wage requirements.

Q: Do I have to pay overtime to salaried employees?

A: It depends on whether the employee meets exemption requirements. Being paid a salary alone does not exempt an employee from overtime. To be exempt, employees must:

  • Be paid on a salary basis (not subject to reduction based on work quantity/quality)
  • Meet minimum salary threshold ($684/week federal standard)
  • Perform exempt duties (executive, administrative, professional, etc.)

All three tests must be met. Consult wage-hour guidance or counsel for classification decisions.

Q: Can remote employees work flexible hours or must they follow a set schedule?

A: Kentucky law does not mandate specific work schedules. However:

  • Non-exempt employees must accurately track all hours worked for overtime compliance
  • Employers may set schedule requirements as business needs dictate
  • Break requirements must be provided per Kentucky law
  • Clear policies should address schedule expectations and flexibility

Remote Work Specific Questions

Q: If I’m a Kentucky-based employer, do I need to pay different wages for employees working remotely from other states?

A: Potentially yes. When employees work from other states:

  • Other state’s minimum wage may apply if higher than Kentucky’s
  • Other state’s overtime rules may apply
  • Other state’s paid leave requirements may apply (if any)

Employers with multi-state remote workers should review each state’s requirements and consult legal counsel.

Q: Are remote workers entitled to the same benefits as on-site workers?

A: Generally, anti-discrimination laws require equal treatment of similarly situated employees. You cannot treat remote workers less favorably solely because they work remotely. However:

  • Legitimate business reasons for different treatment may exist
  • Some benefits may not be applicable to remote work
  • Clear policies should address benefit eligibility
  • Consult HR counsel to ensure non-discriminatory practices

Q: Can I require employees to return to the office after allowing remote work?

A: Generally yes, unless:

  • Employment contract guarantees remote work
  • Collective bargaining agreement requires it
  • Change constitutes discrimination or retaliation
  • Remote work was provided as disability accommodation (requires interactive process to modify)

Best practices:

  • Provide reasonable notice of policy changes
  • Consider employee concerns and business needs
  • Document legitimate business reasons
  • Apply changes consistently and non-discriminatorily

Tax Questions

Q: Do I need to withhold Kentucky income tax for employees working remotely in Kentucky?

A: Generally yes, if employee works from Kentucky and you don’t have a reciprocity agreement. Kentucky has reciprocity with Illinois, Indiana, Michigan, Ohio, Virginia, West Virginia, and Wisconsin. For these states:

  • Continue withholding for employer’s state only
  • No Kentucky withholding required

For all other states, Kentucky withholding is generally required for work performed in Kentucky.

Verify specific situations with Kentucky Department of Revenue.

Q: Does having one remote employee in Kentucky create tax obligations for my out-of-state company?

A: Potentially yes. Having an employee in Kentucky may create:

  • Income tax nexus
  • Withholding tax obligations
  • Unemployment insurance requirements
  • Workers’ compensation requirements
  • Possible business registration requirements

Consult Kentucky Department of Revenue and tax professionals for your specific circumstances.

Workers’ Compensation Questions

Q: Are injuries in a home office covered by workers’ compensation?

A: It depends on specific circumstances. Generally, injuries that “arise out of and in the course of employment” may be covered. Factors include:

  • Whether employee was performing work duties at time of injury
  • Whether injury occurred in designated work area during work hours
  • Connection between work and injury

Each claim is evaluated individually by Kentucky Department of Workers’ Claims. Report all work-related injuries promptly and seek guidance from the department.

Q: Do I need workers’ compensation insurance if I only have remote workers?

A: Yes, if you have employees in Kentucky. Kentucky requires workers’ compensation coverage for employers with one or more employees, regardless of whether they work remotely or on-site. Work location doesn’t change the coverage requirement.

Leave and Benefits Questions

Q: Does Kentucky require paid sick leave?

A: No, Kentucky does not mandate paid sick leave. However:

  • Employers may voluntarily provide paid leave
  • Federal FMLA may provide unpaid leave rights (employers with 50+ employees)
  • Other leave requirements may apply (military, jury duty)

Q: Can I require a doctor’s note for sick leave?

A: Generally yes, employers may require medical documentation for absences. However:

  • FMLA has specific certification requirements
  • ADA reasonable accommodation requests may require interactive process
  • Policies should be applied consistently
  • Consider privacy laws when handling medical information

Q: Do I have to provide health insurance to remote workers?

A: Kentucky law does not mandate health insurance for most private employers. Federal ACA requires:

  • Applicable large employers (50+ full-time equivalent employees) must offer affordable coverage to full-time employees (30+ hours/week)
  • Coverage must meet minimum value and affordability standards

Remote vs. on-site status doesn’t change ACA requirements.

Discrimination and Harassment Questions

Q: Do anti-discrimination laws apply to virtual work environments?

A: Yes, absolutely. Kentucky Civil Rights Act and federal anti-discrimination laws apply equally to remote workers. Harassment, discrimination, and retaliation are prohibited regardless of work location. This includes conduct via:

  • Video conferences
  • Email and messaging
  • Phone calls
  • Any work-related communication

Employers should have clear anti-harassment policies covering virtual environments.

Q: Can I require employees to turn on cameras during virtual meetings?

A: Generally yes, as a business requirement. However, consider:

  • Disability accommodations if camera use creates barriers
  • Religious accommodations if appearance restrictions exist
  • Privacy concerns regarding home environment visibility
  • Cultural or personal concerns (address respectfully)

Best practices include clear policies, legitimate business justifications, and flexibility for valid concerns.

Classification Questions

Q: How do I know if my remote worker is an employee or independent contractor?

A: Kentucky uses different tests depending on context:

  • Workers’ compensation: Six-factor test examining control, permanency, skill, investment, opportunity for profit/loss, and integration
  • Unemployment insurance: Economic reality test

Key question: Is worker economically dependent on your business or independently established?

Classification is complex and fact-specific. Misclassification carries serious consequences. Consult Kentucky Department of Workers’ Claims, Kentucky Office of Unemployment Insurance, or legal counsel.

Q: Can I call someone an independent contractor to avoid providing benefits?

A: No. Classification is determined by the actual working relationship, not labels or agreements. Improperly classifying employees as independent contractors can result in:

  • Back taxes and penalties
  • Workers’ compensation violations
  • Unemployment insurance obligations
  • Wage and hour violations
  • Legal liability

Classification must be based on legal tests, not desired tax treatment.

Others

Tennessee
Ohio
Indiana
West Virginia
Virginia

Legal Disclaimer: This guide provides general background information only and does not constitute legal, tax, or professional advice. Employment laws are complex and subject to interpretation. Consult licensed legal counsel and official state agencies for guidance specific to your situation.