An employee in a state exposes the employer to legal, regulatory, and tax jurisdiction. Many employers are not set up to handle compliance in states other than where they are located, and even many multi-state employers may not be set up to handle compliance in a particular state.

Not all states are understanding about this either; many states are notorious for penalizing employers for failing to comply with compliance requirements they didn't know they had because an employer moved to a state without telling them.

Prior to COVID, many companies considered this grounds for for-cause termination. Even post-COVID, some companies still consider this grounds for for-cause termination.