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Article | The Realities and Legalities of Telecommuting

The notion of what the traditional work place should be has changed in light of new technology that continues to make a global market possible. Telecommuting is no longer viewed as the solution for the working mother who is raising children. The demand from workers for flexibility in work schedules, the increase in efficiency due to high-speed internet connections and the cost-savings to companies by allowing an off-site workforce, among other reasons, has made working from home a viable option for many workers.

The Realities:
Is telecommuting right for your business?

The Pros

An employer might decide to permit workers to telecommute for a variety of reasons, one of which may be the desire to retain quality employees who seek to strike a better balance between home and work. For many employees, dealing with traffic, parking and rising gas prices are fueling the need to work from home. Eliminating the commute also enables the employee to spend more non-working hours meeting family commitments and, at the same time, save money. In some circumstances, savings may equal one to two hours per day in childcare expenses. This in turn may have a financial impact on your business.

An employee who has the desire to work at home and who is permitted to do so will likely have a renewed or even stronger sense of loyalty to the business. Likewise, morale will be lifted, and higher employee retention rates will be achieved. A satisfied employee is usually a more productive employee with a lower absentee record.

Similarly, when a valued employee must relocate, a company may save time and money by allowing that employee to telecommute from the employee's new home. The employer might also save time and money by not having to recruit and train a replacement for this individual. The economic savings to the employer in having an off-site location may also be realized by not having as large an office space to accommodate the workforce.

Technology now exists that enables employers to realize remote-access security. The employer's information technology professionals can monitor whether or not a telecommuter's computer and other communication devices are protected with proper anti-virus software. Patching that employee into the employer's network to allow the employee to function as if she were sitting in an office at the employer's main site is now easier than ever. While the data stored on laptop computers or the employee's own home computer needs to be monitored and backed-up just as if that employee were in the office working on the server, software is available to automate the process. Once a telecommuter is logged into the system, the computer should function as part of the employer's network.

The Cons

Monitoring telecommuter employees is not as easy as monitoring employees who work in the employer's physical office. Likewise, some employees lack the independence and commitment required to be a successful telecommuter. Consideration must be given as to how to judge a telecommuter's work performance when a supervisor is not physically present to oversee the work.

Further, a rogue employee can more easily hide improper behavior. Out of sight may be out of mind. Yet, causes of action still exist for negligent supervision, negligent hiring and harassment, even when the perpetrator works from an alternate location.

The Fair Labor Standards Act's ("FLSA") record-keeping requirements for non-exempt employees may prove to be another challenge. A mechanism must be put in place and closely monitored to ensure that the employee is recording all hours worked. There is also the potential for the at-home employee to falsify time records in an effort to increase his or her compensation. Even though software can record when an employee logs on and off of the computer system, this function is not always indicative of the hours actually worked.

Additionally, consideration must be given to how an employee can fulfill its document retention requirements with a telecommuter. If the threat of or actual litigation arises, the employee's computer may be subject to a forensic search to satisfy document production requirements. This search might be more difficult and more costly in a telecommuting setting.

Maintaining privacy and exclusivity of ownership over intellectual property are also issues that may arise. An employee working outside of the workplace may maintain a duplicate set of client files and may also have access to trade secrets and other proprietary information required to fulfill the employee's job duties. Thus, the employer may have more difficulty retrieving these items from a departing telecommuter than from an employee working in a traditional office.

If a person's job is only feasible in an office environment, telecommuting will not work for this position. If an employee is in constant collaboration with other workers, despite the ease of today's electronic communications, telecommuting may not be a reasonable alternative. Likewise, the decrease in the number of employees at the work site may impact the employer's ability to handle a crisis or to staff an emergency project.

Finally, the employee's home may not be an environment conducive to performing work. The Occupational Safety and Health Administration has opined that the Occupational Safety and Health Act applies to employees who have work at home arrangements. Also, if an employee is injured at home while working, worker's compensation insurance may be implicated.

The Legalities:
How can you develop a telecommuting program?

First, have a policy

Once a decision has been made to allow workers to telecommute or work remotely, a clear telecommuting policy should be established and made part of the employer's handbook or personnel policies. The policy should clearly delineate what categories of workers are eligible to telecommute.

Employees who are eligible for telecommuting are those who have been recognized as strong performers with excellent job skills, self-discipline, high motivation and the desire to telecommute successfully. Additionally, planning, organizational and time management skills, as well as the ability to meet objectives, are attributes of a good telecommuter. Jobs which are suitable for telecommuting will depend on the tasks involved, the technology required to complete those tasks and the specific employee's own personal attributes.

To decide which jobs and employees are eligible for the telecommuting program, the criteria used in the evaluation process should be neutral and evenly-applied to avoid the appearance of impropriety, favoritism or discriminatory motive. For example, if the telecommuting option is available to all employees in certain job classifications, the employer may determine eligibility based on the employee's seniority, past performance ratings and other recognized skills required for a telecommuter.

Another good practice is to assign a company representative to head the telecommuting program and identify that person in the policy. This person will be charged with overseeing the telecommuting program and the administration of the telecommuting policy, though not necessarily responsible for supervising telecommuter employees.

Second, prepare a contract

A telecommuting agreement that clearly sets forth the obligations and objectives of the employer and the telecommuting employee. In addition to incorporating the employer's handbook and policies into the telecommuting agreement, the contract should address the following matters of significance:

1. Specifics


The agreement should define the employee to whom it is applicable, identify the employee's job title, describe the employee's job duties and responsibilities and outline the types of assignments for which the employee is responsible. The agreement should also state the amount of the employee's compensation and the frequency of payment.

The agreement should also state whether the employee's position is exempt or non-exempt from the requirements of the FLSA. Assuming the employee under contract is non-exempt, then the telecommuting agreement must clearly define the hours that the employee is expected to perform work and describe the means by which the employee's work hours will be tracked. This can be as simple as logging in and out of the computer.

Another issue is use of Blackberries and cell phones by non-exempt employees during non-work or off-the-clock hours. These types of activities must be strictly prohibited, as they will open up possible claims for overtime compensation. If the nature of the employer's business is such that use of these devices cannot be prohibited, the policy must provide guidance as to the requirement to record such time and make sure that the employer does not violate FLSA requirements.

The telecommuting agreement should also describe the employer's expectations and set forth the employee's performance objectives. All employers should be conducting periodic performance reviews and evaluations, and the telecommuting employee must be included in such periodic reviews.

The contract should also describe the length of the telecommuting assignment or the term of the agreementMoreover, the employer should include provisions for termination of the telecommuting arrangement with or without notice by the employer for any reason at all. If the employee refuses to resume normal employment at the employer's headquarters following termination of the telecommuting agreement (if a position is available), then the contract should state that the employee will be deemed to have resigned and not terminated. This fact may be helpful in a subsequent proceeding for unemployment compensation.


2. Equipment


The telecommuting contract should describe the equipment that may be required by the employee in the performance of his or her duties, such as fax machines, telephone lines, PDA's, cellular telephones, copiers, scanners, shredders and the like, whether such equipment will be supplied by the employer or employee and who will be responsible for the maintenance of such equipment.

In addition, the agreement should address other IT issues such as access to information. Computers and other equipment used by telecommuters should be routinely monitored and backed up to prevent against viruses, hackers and the like. If the employer monitors e-mail, voice mail, internet access and PDA use, it is highly recommended that the agreement include the employee's acknowledgment that the exceptions to the Electronic Communications Privacy Act are applicable so that the employer has the ability to monitor all incoming and outgoing electronic communications.

A prudent employer that provides telecommuters with network access should also focus on internal and external network security to prevent the disclosure of confidential information, whether inadvertent or intentional. One way this can be achieved is by including a series of confidentiality provisions in the telecommuting contract. These provisions should specify the employee's obligations to maintain the confidentiality of the employer's intellectual property, including confidential and proprietary information and trade secrets.


3. Work Space


The telecommuting agreement should define the specific area in the home where the employee will be working and require that the employee's work be limited to that space only. The telecommuting agreement should contain an acknowledgment by the employee that the employer is entitled to access to this work area upon reasonable notice.

Issues relating to worker's compensation should also be addressed in the telecommuting contract. Employers should consult with their worker's compensation carriers to ensure that an employee who performs work at home will be covered in the event of an injury. The employer should also examine other insurance policies and verify that employees working at home or from remote locations are covered.

The employer should ensure that the home or remote office is set up to comply with OSHA standards, since the employer's duty to provide a safe workplace extends to off-site workers, as well. Still, the employer is not responsible for the entire home's compliance with OSHA, only the home office. The employer should also require that the employee immediately report any hazards or accidents.


4. Jurisdiction and Arbitration


The telecommuting contract should include a choice of law provision, a waiver of personal jurisdiction and a mandatory forum selection clause.

Additionally, the telecommuting contract may provide for arbitration of any disputes. An arbitration clause should describe the arbitrating entity (such as the American Arbitration Association), the place of the arbitration, who will bear the costs for arbitration, the format for the arbitration and the scope of the arbitration provision. Employer-friendly agreements typically require each party to bear their own attorneys' fees and costs, including filing fees, and include all matters relating to the employee's employment.


5. Acknowledgments


In addition to a general acknowledgement by the employee that the employee has read the entire agreement and entered into the telecommuting contract freely and voluntarily, the employee should reaffirm his or her understanding that the contract incorporates all policies from the employer's handbook, unless specifically modified by the telecommuting agreement, including, but not limited to, all policies of the employer related to harassment, discrimination, equal opportunity and the like.

Telecommuting can be a very profitable option in today's emerging global economy. When the time comes to decide whether or not a Telecommuting Program is right for your business, the foregoing analysis should help guide you in your decision.