An out-of-state company hires a software developer who lives in Washington and works from home. Does that single remote employee hire mean the company is doing business in Washington? Must it register with the Secretary of State? However, as of 2026, the Legislature answered the Remote employee registration portion. It left the tax half open.
The new safe harbor
Under SHB 2248 (Chapter 80, Laws of 2026), effective June 11, 2026, the Legislature amended RCW 23.95.520 – The statute lists activities that do not constitute ‘doing business’ in Washington – —to add “employing a remote worker who resides in Washington state.” In other words, a foreign (out-of-state) entity does not become obligated to register as doing business in Washington merely because it employs a Washington-resident remote worker.
The trap: registration is not the same as tax
Here is the part that will be misread. The same statute expressly says, in subsection (4), that this list “does not apply in determining the contacts or activities that may subject a foreign entity to service of process, taxation, or regulation under law of this state other than this chapter.” So the safe harbor answers only whether you must register with the Secretary of State. It says nothing about whether your remote employee creates B&O tax nexus, payroll obligations, or other regulatory duties—which are governed by different rules entirely.
What still gets triggered by a Washington employee
Employing someone in Washington generally brings payroll-side obligations regardless of the registration safe harbor—think workers’ compensation, paid family and medical leave, unemployment insurance, and withholding-type requirements—and it can create tax nexus for B&O purposes. The registration safe harbor is a narrow convenience, not a general “Washington doesn’t apply to us” rule.
What to do
- If your only Washington connection is a remote employee, you likely do not need to register as a foreign entity—but confirm your specific facts.
- Separately evaluate B&O tax nexus, payroll accounts (L&I, Paid Leave, unemployment), and any licensing—those are not covered by the safe harbor.
- Do not treat “we don’t have to register” as “Washington law doesn’t reach us.” The statute says the opposite.
The 2026 change is genuinely helpful for remote-first employers, but only for the question it actually answers. The tax and payroll analysis is a separate—and often more consequential—inquiry.
Martin can be found at North City Law, PC. If you have questions about hiring remote employees in Washington or other services, you can reach us at martinkreshon.com or call (206) 929-0609. You can also find reviews for Martin on Google and Avvo.
This post is for general informational purposes only and is not legal advice.