No, you do not need to incorporate there: regardless of how many jurisdications it has offices, employees, etc. in, a company only has one state of incorporporation or formation. You also do not need to register to do business there, if she is not selling to, servicing, etc. the public or customers. You will have to make sure that a portion of her salary is withheld in the state she is working in, but if she's doing payroll for you, she should be able to take care of that.