Let’s Get Physical: Five Legal Issues With Telecommuting

In a little over a month, two large companies have made headlines for either eliminating or greatly reducing the availability of their telecommuting programs. Both companies claim to be motivated by a desire to “reinvigorate” their companies by fostering “collaboration” among workers.

Why were these companies’ decisions—though seemingly innocent—the cause of so much controversy? According to one source, at least one of the companies issued its blanket policy against telecommuting after monitoring employees’ Virtual Private Network (VPN) use and discovering that employees who worked remotely weren’t logging in enough. This reason sparked a debate about the productivity of workers both in and out of the office—with some claiming that telecommuters are more productive than their commuting counterparts and others accusing telecommuters of abusing the work-from-home policy. Add to this an already burgeoning movement among millennials in favor of a work/life balance and you have a full-blown national controversy.

The pros and cons of telecommuting policies have been widely studied and researched. In the absence of a hard and fast rule about what to do, how should employers decide if permitting telecommuting is right for them? The efficacy of any telecommuting policy will vary from company to company and depend on your office culture. Several factors to consider are whether remote work is compatible with your industry, whether collaborative efforts can be achieved using technology, and whether your employees can work without supervision. In addition to these concerns, below are five legal issues to consider before your company institutes a telecommuting policy.

1. Company property. Are your telecommuting employees using company computers or their own computers to work from home? Do they have a company-issued smartphone or tablet? What happens if these devices and equipment are lost or stolen? What about damaged equipment? Who is responsible for replacing a company computer that the family dog destroyed?

One way to handle this issue is to get it in writing. If you are issuing electronic or technical equipment to your employees, have them sign documents acknowledging their receipt of the equipment, requesting that they take appropriate action to prevent damage or theft of the equipment, and indicating who will maintain and replace damaged equipment. It is also advisable to get the employee to authorize deductions from wages for any replacement costs or damages in accordance with applicable state law. Such an acknowledgment could also be used to limit employees’ use of company equipment for non-business purposes.

2. Security. This issue of lost or stolen devices brings us to the issue of security. Is your telecommuting employee taking home sensitive documents or electronic data? How secure is their home office? Are they working from a wireless Internet connection that can be accessed by others? Depending on your business and the amount of confidential and proprietary information accessible to certain employees, this may be a particularly sensitive issue making telecommuting a less attractive alternative for your business.

One option is to have an employee from your information technology (IT) department go to the telecommuter’s home to ensure that they are accessing company data appropriately and securely, either from a secure connection or through a VPN. Employers can also communicate to their telecommuting employees that they will be expected to ensure the protection of proprietary and confidential company information. Employers could require that their telecommuters use locked filing cabinets and desks and regularly change passwords for electronic security.

3. Workers’ compensation. What happens if your telecommuter slips and injures himself on work-related papers? How about if she develops a fatal blood clot while working at home? What if she trips over her family dog and injures herself? Worse yet, what if your employee is assaulted by a third-party while working at home?

All of these scenarios formed the bases of workers’ compensation claims brought by telecommuting employees. Employers are responsible for a safe working environment for their employees regardless of whether their employees work from home or the office. To limit safety issues, employers should make an effort to delineate telecommuting employees’ work time and work environment by, for example, requiring employees to designate a specific area at home to serve as an office and to take lunch and rest breaks at designated times. Employers might also want to perform a site check of the employee’s home office to ensure both that there are no potential hazards (such as overloaded extension cords or tripping hazards to name a few) and to ensure that the employee’s desk and seating arrangement is appropriately designed.

4. Payroll records. Telecommuting arrangements present challenges for employers in complying with hourly recordkeeping regulations. The Fair Labor Standards Act (FLSA) requires employers to pay employees for all hours worked and to keep accurate information regarding hours worked. The FLSA explicitly applies this rule “to work performed away from the premises or the job site, or even at home” and requires employers to count the time as hours worked “[i]f the employer knows or has reason to believe that the work is being performed.” (29 C.F.R §785.12)

Employers with telecommuters should thus establish some mechanism to track those hours and to ensure their accuracy in the absence of a supervisor to monitor the employee’s working hours. Employers should also encourage an open line of communication between supervisors and telecommuting employees—even if using an electronic system to track hours worked. Employers are further encouraged to summarize the telecommuting process in writing and have the employee sign off on the process. The document (whether a policy or acknowledgment) can set out the framework for the telecommuting assignment, the number of hours expected to be worked each day or week, how hours are to be recorded, and emphasize that non-exempt employees are prohibited from working off-the-clock.

5. Compensation. The FLSA requires employers to compensate employees at or above the federal minimum wage for all hours worked and to pay employees overtime for all hours worked over 40 in a given workweek. The federal rules on overtime, waiting time, on-call time, and rest and meal breaks apply to telecommuters as much as they do to employees in the workplace. This makes an employer’s obligation to track non-exempt employee hours especially important. Employers with non-exempt telecommuting employees must be especially careful to track employees’ working hours—to avoid the risk of costly collective actions.

According to Cynthia Bremer, a shareholder in the Minneapolis of Ogletree Deakins, “despite the many challenges associated with telecommuting arrangements, they remain a popular work option for many employers. If considering such an arrangement, it is helpful to require a  written agreement or written terms of employment that outline the telecommuting arrangement and address such important items as preapproval for overtime, timekeeping requirements, and the other important topics addressed in this post.”