Marketing & PR Agencies: State Payroll Compliance Issues (2026)

Where state law touches marketing agencies specifically

State unemployment tax for a remote employee who performs all work from home in another state is owed to that state under the localization of work rules adopted in every state's UI law. In DOL's example, a New York employer's employee who moved to Florida and telecommuted full time became reportable to Florida from the date the telecommuting began.

Whether a freelancer is an employee or an independent contractor under the FLSA is decided by the economic reality of the whole relationship using six factors: opportunity for profit or loss, investments, permanence, control, whether the work is integral to the business, and skill and initiative. Signing a contractor agreement or receiving a 1099 does not make a worker a contractor.

The 2024 independent contractor rule is still codified at 29 CFR part 795 (source 89 FR 1741, January 10, 2024) and remains in effect for private litigation, but the Wage and Hour Division stopped applying it in its own investigations under Field Assistance Bulletin 2025-1. On February 26, 2026 DOL proposed rescinding it in favor of a test built on two core factors, control and opportunity for profit or loss; the comment period closed April 28, 2026 and no final rule was posted as of this research.

The state layer every employer carries

Each state where an employee of a marketing agency works can set its own minimum wage, its own overtime trigger, a pay-frequency law, a new hire reporting deadline shorter than the federal 20 days, a final paycheck deadline, and a continuation coverage rule below the federal COBRA threshold. The state pages on this site carry those facts state by state from one data file, so the numbers here and on the multi-state checker never disagree.