Even in California, SF has different payroll taxes and regulation than other cities in the area. Massachusetts requires employers to open a unemployment account in state. If the employee moves to a state the employer doesn’t have a employees previously, you need to register in the state and it might mean you have to now pay sales taxes on revenue in the state.
So unless you become an independent contractor and deal with this things yourself, the employer needs to know where you live most of the tax year.
My point was that main reason companies need to know where the employee is compliance, employment law, taxes and potentially IP protection. While the employer wouldn't care about the location because of pay scale, they still need to know for other reasons.
Until we can all live in some United Kingdom of the Internet, the unfortunate fact is that local laws apply to companies and employees when the employee resides in the jurisdiction.