Does your work-at-home job comply with local regulations? Telecommuters, especially W-2 employees, usually don’t think about zoning permits. However, you may need permission from your local government to work a remote job at home.
Do I Need Special Permits to Work from Home?
Most businesses need permits to operate for two major reasons: to protect the public and track taxes. The consequences of not having a business permit can include tax penalties, legal punishment, or even shutting down your home based work. Typically, business owners who intend to operate in commercial or industrial areas incorporate permitting, licensing, and other legal filings in their startup process.
However, work-at-home professionals and home-based business owners often overlook permitting, even when their homes are located in mixed-use districts. Though many governments allow the use of residential space for telecommuting occupations, you should check with your city and county government to ensure compliance and prevent getting shut down. Here are some tips and insights to help you understand the purpose and the process of home occupation permitting.
What Is a Home Occupation Permit?
A home occupation permit is a type of zoning permit that helps distinguish residential neighborhoods from commercial and industrial areas. Local governments prohibit certain kinds of businesses from operating in residential communities. Individuals who use their homes as their primary business location may need to file a home occupation permit to comply with local regulations.
Which States Require Home Occupation Permits?
Though federal and state governments may enforce specific land use legislation, they do not necessarily require or issue home occupation permits. City and county governments are responsible for zoning and creating specific regulations to govern commercial and residential activities.
Why Do Local Governments Issue Home Occupation Permits?
Local governments want to keep residential, commercial, and industrial activities separate for a variety of reasons. For example, they want to prevent heavy machinery transport on residential roads to avoid safety hazards, frequent road repairs, and disruption. They also want to keep high-traffic businesses, such as retail stores, gas stations, and restaurants, away from otherwise quiet communities.
How does this relate to work-at-home professions? If you operate a home-based business, or if your job creates certain impacts on your neighborhood, your local government may need justification before allowing you to use your home as your primary workspace.
Examples of factors that determine whether you need a permit include:
- Vehicle traffic and parking – how many people drive in and out of the neighborhood and park on the street or in your driveway
- Foot traffic – how many people walk along neighborhood sidewalks to your door
- Noise – whether your business creates excessive noise relative to the average level of noise in the neighborhood
- Equipment – whether you need to operate large machinery regularly
- Pollution – whether your work activities produce any type of pollution, such as air contaminants or excessive solid waste
- Employment – whether you regularly invite or require employees to work in your home
Though many telecommute jobs are computer-based and do not require substantial equipment, loud noise, or visitors, some local governments still need official documentation and permitting as validation.
Taxes are the other main reason governments issue home occupation permits. State and local agencies want assurance that you pay the correct amount of taxes based on your employment status, business structure, and income, revenue, or sales.
How Do Home Occupation Permits Affect Remote Workers?
Many remote jobs, such as those listed in the Virtual Vocations database, are considered “minor” or “acceptable” and do not require permits as long as work activities meet specified criteria. Therefore, home occupation permits are a formality for most telecommuters.
Permits require upfront paperwork and information gathering, but they typically do not interfere with daily tasks. However, some local governments enforce tighter restrictions for certain types of occupations.
Permits usually come with a fee, and some require regular renewal. Some cities, such as Pasadena, California, also require you to apply for a business license in addition to a home occupation permit.
What Types of Telecommuters Need a Home Occupation Permit?
Home occupation permits typically apply to any worker regardless of employment or business classification. Therefore, W-2 employees, freelancers, independent contractors, and home-based business owners may all require permits in individual cities and counties.
For example, if a sales manager is a W-2 employee, works primarily from home, and welcomes team members, clients, and upper management to the home office regularly, the sales manager may need a home occupation permit to conduct regular business.
Governments understand that many professionals conduct some of their business at home regardless if they have a separate office. Thus, telecommuters who perform a majority of job tasks at a co-working space, commercial office, or another external location probably do not need a permit unless at-home work tasks negatively impact the neighborhood.
Do Part-Time Remote Workers Need Permits?
The amount of time you work at home may not determine whether you need a home occupation permit. Residential impacts and taxes are the key determiners.
For example, if you run a part-time furniture repair business, where customers drop off and pick up furniture at your home, and where you store cutting tools, large quantities of adhesives, and scrap wood, you will need to prove that your business does not violate any residential zoning laws.
However, if you are a part-time virtual assistant, you will probably fall under the same requirements as a full-time virtual assistant, where the nature of your job is not likely to cause significant impacts to the neighborhood.
How Do Home Occupation Permits Affect Virtual Business Owners?
Business owners who operate virtual companies from their home may need to file a home occupation permit along with other business documentation. In addition, some cities, counties, and states may enforce specific limitations, such as:
- You may not have any employees working in your home at any time.
- You may only have one employee working in your home between the hours of 8 a.m. and 5 p.m.
- You may not advertise your business anywhere in the exterior of your home.
- You may not use your property to host large-scale events for the sole purpose of conducting business.
- You may not build external structures or additions to your current property for the sole purpose of conducting business.
- You may not use common areas of condominiums or apartment complexes as your sole place of business.
For example, Washington, D.C. states that no more than 25% percent or 250 square feet of a home can be used to qualify for a home occupation permit. The city also limits the number of visiting customers per hour, vehicles that can be used, and business-related trips into and out of a home.
As far as taxes go, if you are an independent contractor or small business owner and employ W-2 staff, you are responsible for deducting your employees’ local taxes. However, your virtual staff may still need to declare their home occupations to their specific cities or counties. If you only hire independent contractors, then your team members are responsible for all zoning, business, and tax filings.
Are Virtual Businesses and Telecommute Jobs Considered “No-Impact”?
Typically, virtual businesses are considered “no-impact” businesses if they do not disrupt the community, drive more traffic to the neighborhood, or increase resource consumption or waste streams. Telecommute jobs, especially those for freelancers and independent contractors, are also generally “no-impact” if they comply with residential ordinances.
How Do I Know if I Need a Permit to Work at Home?
Local governments have different regulations and requirements for home occupation permits. Some cities allow certain professionals to perform their jobs at home, while others forbid home-use for the same occupation. For example, Sacramento County, California explicitly prohibits palm reading and fortune telling in residential districts, but cities like Evanston, Illinois may allow such work as long as it meets specific criteria.
Visit your local government’s website and search their business or commercial resources page. If they do not have information specific to zoning, contact a city or county worker. Ask the worker where to find ordinances that pertain to home occupations and whether your specific profession requires a permit.
How Do I Apply for a Home Occupation Permit?
Home occupation permit requirements vary. In general, you may need to provide the following information to determine whether you need a permit or to apply:
- Employment verification or business filings
- Floor plan of your home and property
- The nature of your occupation or businesses
- Zoning forms and other legal applications
If your profession requires employees or customers to use your home, you may also need to provide data related to:
- The number of visitors you expect each day
- How visitors will access your home
- Where visitors will park
- Where you will primarily conduct business on your property (e.g., dedicated office, basement, or backyard)
- Any incoming or outgoing shipment schedules
- Other details that affect traffic, noise, air pollution, energy usage, and waste streams
If you belong to a homeowner association (HOA), you may need written consent from the board of directors to perform your occupation at home. If you do not own your property and rent under a lease agreement, you may need written consent from the property owner or manager.
Should I Apply for a Home Occupation Permit Before I Get a Job?
First, check with your local government if your occupation requires a permit. If you do not work from home yet but are applying for remote jobs, it might make sense to wait until you get an offer to start the application process. However, if you currently work primarily at home, you should probably take action as soon as you become aware of your city or county’s requirements to avoid legal complications.
How Do I Help My Remote Workers Obtain Work-at-Home Permits?
If your own or operate a virtual business and hire employees or independent contractors, consider adding information about home occupation permits to your standard onboarding training and employee handbook. Clearly communicate that permitting is an employee responsibility. However, you can assist by providing employment verification, a comprehensive list of job tasks, and statements related to residential impacts. Avoid scaring remote workers and offer guidance to facilitate the process and ensure that your team complies with all local regulations.
Do Virtual Vocations Jobs Require Work-at-Home Permits?
Most telecommuting jobs in the Virtual Vocations database are internet-based and do not require you to invite clients, vendors, colleagues, or other parties into your home. In addition, most Virtual Vocations jobs do not require major equipment aside from computer workstations, small printers, scanners, telephones, and related gear. Therefore, if your city or county requires that you file a home occupation permit, you may simply need to provide written notification about your job as assurance that you will not disturb the neighborhood.
Is Working from Home Worth Getting a Permit?
Absolutely! The long-term benefits of telecommuting from home far outweigh any short-term hassle. Home occupation permits are not barriers to remote employment. Just make sure you are aware of your legal responsibilities by contacting your local government. Once you know what your city or county requires, visit the Virtual Vocations job database and start applying for work-at-home jobs.
Were you required to apply and be approved for a work permit before you started working from home? Connect with Virtual Vocations on Facebook, Twitter, and LinkedIn to share your story. We’d love to hear from you!
Photo Credit: 1. iStock.cm/BernardaSv
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