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Four Legal and Managerial Priorities When Implementing a Remote Workforce Strategy

Published by on October 13, 2015

As more Americans have embraced a “mobile” technology culture, many employers have embraced the cultural shift and begun utilizing a remote workforce. Opinions regarding the benefits and drawbacks of the virtual office and remote workplace abound among workers and businesses alike. Unfortunately, these perspectives rarely address the legal implications employers who implement a remote workplace […]

As more Americans have embraced a “mobile” technology culture, many employers have embraced the cultural shift and begun utilizing a remote workforce. Opinions regarding the benefits and drawbacks of the virtual office and remote workplace abound among workers and businesses alike.

Unfortunately, these perspectives rarely address the legal implications employers who implement a remote workplace should consider. For employers considering the switch to a virtual office or incorporating teleworking potential into their businesses, analyzing these four issue areas can reduce future liabilities and headaches.

1. “On The Clock” – Working Hours & Tracking Employee Time

For employees working remotely, their greatest perceived benefit is flexibility in their work schedules. For employers, this can be a serious pitfall. The Fair Labor Standards Act (FLSA) requires employers to pay non-exempt employees who work more than 40 hours per week overtime. Some state laws include additional wage provisions and requirements.

The Act makes no distinction between employees working in a traditional office or working remotely. Employers with remote workers must still (1) properly track the employee’s hours to ensure proper wage payment under the Act and (2) provide employees with rest and meal breaks as required by law. Finally, employers who require remote employees to respond to emails or digitally monitor projects during non-traditional hours run the risk of such time being considered a compensable work activity under the wage and hour laws.

Employers should mandate the use of timekeeping software linked to the payroll system, to ensure both proper hour tracking and accurate wage payment. In addition, the timekeeping software addresses another key concern – employee productivity without direct supervision. Employers can also use the timekeeping software to track tasks by requiring employees to link time worked to specific projects or clients. Having supervisors review time records and regularly communicate with remote employees regarding project status and work updates can ensure effective management and reduce the potential for wage violations.

2. Employee Health Issues – Medical Leave and Disability Accommodations

Employees working remotely, even from their homes, may still receive protections related to medical issues and disabilities. The fact that an employee works remotely does not mean that they are already receiving all benefits due under the Americans with Disabilities Act (ADA) or the Family and Medical Leave Act (FMLA).

The ADA applies to all employers with 15 or more employees, regardless of the nature of the employment or where the employee’s work is performed. Remote workers with disabilities are still entitled to reasonable accommodations for those disabilities, requiring the employer to engage in the interactive process to determine what accommodation is appropriate.

Just because an employee does not work in the employer’s office does not mean that an accommodation in their home or other remote workplace is per se unreasonable. Employers should evaluate accommodation requests for remote workers using the same reasonableness standard applied to employees performing duties at the traditional jobsite.

Similarly, remote employees may also qualify for FMLA benefits. In order to qualify for FMLA benefits, the employee must work 1,250 hours within the previous 12-month period for an employer who employs 50 or more employees within a 75-mile radius of the jobsite. Some employers may believe that remote workers would never qualify for FMLA benefits under this rubric, however the FMLA regulations directly address the remote worker qualification issue.

Under 29 C.F.R. 825.111(2), an employee’s residence is not the jobsite for FMLA-qualification purposes. The jobsite is the office or location to which the employee reports or from where work assignments are issued. Therefore, if the remote employee’s supervisor works at a location with 50 or more employees within 75 miles of that site, the remote employee is eligible for FMLA benefits. The remote employee’s location is not relevant in determining their FMLA eligibility.

Employers should treat requests for leave or accommodation from remote work locations in the same manner as they would for on-site employees. The mere fact that an employee does not work in a traditional office has no effect on their rights under the ADA or FMLA.

3. Employee Privacy & Employer Data Security

Employers utilizing a remote workforce should also take precautions to protect proprietary information and reduce the risk of damage to their networks. In our previous blog article discussing the risks of a BYOD policy, we suggested several measures employers can take to reduce the potential risks of employees using their own devices in connection with corporate networks.

Employers should require remote employees to sign confidentiality and personal device agreements outlining the scope of the employee’s appropriate use and access to corporate systems. The agreement should further require employees to provide the employer’s IT providers with access to the remote employee’s devices should a data breach or system infection occur.

Finally, communication is the key to an effective data security policy. The remote employee’s supervisors should provide training and informational materials to their remote employees in order to promote data security and reduce risk. Our BYOD article provides additional options and policies that employers should consider.

4. Interstate Operations & State-Based Employee Benefits

While a remote workforce can provide access to a broader spectrum of potential talent not available to a traditional office based in one location, that broader reach comes with a risk – multi-jurisdictional liability. Most state laws are purposefully vague when defining what constitutes an employment relationship. Simply performing work on behalf of another can create an employment relationship under state law.

As a result, employers with remote workers in several states expose themselves to liability under the laws of each state where the remote employee performs their duties. Unemployment, workers compensation, workplace safety regulations and state-specific wage requirements are some of the state requirements that should be considered before hiring a remote workforce.

In addition, some states will not enforce employment agreements based on the law of another state, if the other state’s law is contrary to public policy. California is known for not applying the choice of law provisions in employment contracts if the contract’s terms violate California’s public policy.

Companies utilizing a multi-jurisdictional remote workforce should be sure to train their human resources staff and the remote workers’ supervisors in the law of the applicable jurisdiction. One possible solution is to organize the remote workforce by jurisdiction under one supervisor. That way, the company can train the supervisor in the individual jurisdiction’s employment laws and reduce the risk of unintended violations of state law.

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