Yahoo CEO Marissa Mayer’s recent announcement that the company would discontinue its telecommuting program set off a firestorm of debate as to the benefits and disadvantages of allowing employees to work at home. New York’s Mayor Bloomberg, a self-made billionaire, quickly chimed in his agreement with Mayer’s decision, calling telecommuting “one of the dumber ideas I’ve ever heard.” On the other side, Virgin Atlantic founder Richard Branson weighed in, declaring that “... in 30 years time, as technology moves forward even further, people are going to look back and wonder why offices ever existed.”
Regardless of whether such programs represent sound business strategy, employers need to be aware of the potential legal consequences of work-at-home programs. Put another way, when your employees telecommute, your company’s employment law obligations do not stay back at the office, but in fact follow your workforce into their homes, the local coffee shop, or wherever else they may be performing work.
One major area of concern for a telecommuting workforce is compliance with the U.S. Fair Labor Standards Act. This law requires employers to record the working hours of, and pay overtime wages to, each employee who is not “exempt” from its coverage. While keeping track of employees’ work hours was easy in a traditional brick and mortar workplace, today it can be a challenging task. Employers remain legally responsible to make sure that hours are properly recorded for workers who do not show up to a company location, which can cause a set of unique headaches.
For example, employers are not typically required to pay for time spent at lunch breaks. However, the lines between “lunch” and “work” may become blurred when an employee opens up their laptop and sets up shop at the local Starbucks. On the flip side, a telecommuting hourly employee may be tempted to take advantage of the “honor system” and pad their work start or end times. In order to ensure that time is accurately tracked, employers should have clear policies regarding when work is expected to be performed, and should implement systems, such as Web-based log-in and log-out protocols which make it easier to determine when work is being performed. At the end of the day, however, employers need to place a good deal of trust in their telecommuting employees, and should consider the potential for abuse when deciding who to assign to such positions.
Another major area of concern involves employee safety. The Occupational Safety and Health Administration (OSHA) requires employers to provide their employees with safe workplaces and to report workplace injuries. Employers are also obligated to have workers’ compensation insurance to cover work-related injuries. When an employee works from home, the lines between work and non-work related injuries can become blurred. For example, OSHA has determined that dropping a box of files on one’s foot while working at home is work-related. On the other hand, if an employee trips over her dog while running to answer a work call while at home, is that an injury entitling them to workers’ compensation benefits?
A third major area of concern in maintaining a telecommuting workforce revolves around data privacy. In today’s environment of smart phones and cloud-based data storage, keeping trade secrets or proprietary information confidential can be a tall order under the best of circumstances. Telecommuting amplifies these challenges, increasing the risk that confidential information will be inadvertently (or, in the worst of cases, intentionally) disclosed. Employers should therefore take steps to track employees’ accessing of company information, and to protect this information just as if it were being accessed at the company’s physical premises. Specific measures can include requiring employees to operate from secure servers or private company networks, limiting sizes of company file remote downloads, and requiring telecommuters to sign a nondisclosure or confidentiality agreement.
Employers who choose to allow employees to telecommute need to think through all of the implications and ensure that they remain compliant with all the laws that govern the workplace, wherever that may be.
Larry S. Perlman is an associate in the Miami office of Foley & Lardner LLP, where he is a member of the Labor & Employment Practice and the Automotive, Senior Living and Health Care Industry Teams.