Telecommuting: Legal Issues and Solutions

7th Annual Idaho Employment Law Seminar
O C TO B E R 1 0 , 2 0 1 9 | B O I S E C E N T RE E A S T | B O I S E , I D A H O
PA R S O N S B E H L E . C O MN AT I O N A L E X P E R T I S E . R E G I O N A L L AW F I R M .
Telecommuting: Legal Issues and Solutions
Christina M. Jepson
801.536.6820 | cjepson@parsonsbehle.com

2
Why Offer Telecommuting
• Green policies (reduce driving)
• Increased productivity (data supports)
• Quiet office (assuming employee’s home is quiet!)
• Improved job satisfaction and morale--choices
• Increased energy and creativity
• Reduced absenteeism

3
Why Offer Telecommuting
• Reduced stress and burn out
• Employer saves on real estate and
office expenses
• Improved balance of work and family life
• Recruitment and retention especially with more women
and younger people in the labor force
• Many workers now consider work/life balance and
flexibility to be one of the most important factors in
accepting or keeping a job (second only to compensation)

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Why Not Offer Telecommuting
• Too quiet (no one at work and no one at home)
• Company culture—spending time together
• Lack of communication and collaboration
• Employees taking advantage of arrangements
• Lack of supervision
• Lack of face time
• Lack of creativity

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Prevalence
• A study of Work-Life Balance And The Economics Of
Workplace Flexibility released by the Council of Economic
Advisers in 2014 shows more than three-fourths of U.S.
employers allow at least some workers to periodically
change their starting and quitting times
• Overall, 56 percent of full-time workers report having flexible
work hours, while only 47 percent of part-time workers do
• 22 percent of workers say they can do remote work

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Prevalence
• 2013 Pricewaterhouse Coopers Study
of Millennials would like to work
from home at least occasionally
of non-Millennials would like to
sometimes change their work hours
64% 66%

7
Telecommuting Legal Issue
• Wage and Hour
• Safety
• Posters
• Confidentiality
• Multiple state laws apply
• Taxes
• Insurance
• Termination
• Discrimination
• ADA Accommodation

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Telecommuting Legal Issues: Wage and Hour
• FLSA applies to all employees regardless of where they work
• For non-exempt employees, employers are required to pay at
least minimum wage and overtime at a rate of one and a half
times the regular rate of pay for hours worked in excess of 40 in
a given week (or 8 hours per day in jurisdictions like California)
• Employees are entitled to be paid for all hours they work
regardless of whether they work in an office or at home
• So what’s the problem?

9
• Telecommuters work on an honor system since they don’t
punch a clock
• Employers must emphasize the importance of timely and
accurate recordkeeping of hours worked

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• Telecommuting arrangements generally do not create
compliance issues for exempt employees because,
assuming they are properly classified, their compensation
is not linked to hours worked
• Employers should be careful when crafting a telecommuting
arrangement so that the agreement does not contain any
terms that could destroy the employee’s exempt status
• Examples include terms requiring rigid working hours or
limiting an exempt employee’s discretion in certain
decisions

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• The FLSA does not define the term “work”
• The DOL regulations address whether an employee is “on
duty” or “off duty”
◦ Employers may struggle to determine when a telecommuting
employee is “on duty”
• What about periods of
Inactivity?

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• What about periods of inactivity? The time is usually
compensable when it is 1) unpredictable; 2) is of short
duration; and 3) the employee cannot effectively use the
time for his or her own purpose.
• An employee is off duty when 1) the employee receives
advance notice that s/he can leave the job site; and 2) the
employee receives advance notice that s/he will not have to
start work until a definite specified time
• The “Can I go to a movie rule?”

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• General rule: it is the employer’s obligation to manage its
employees to ensure that they are not working
uncompensated hours
• You should have a policy, but the DOL has ruled that the
mere existence of a policy or rule that prohibits an
employee from working off the clock is insufficient to
absolve the employer of liability
• Must treat the violation as a disciplinary/performance
issue

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• Measures that help control off the clock work:
◦ Having a policy prohibiting overtime or requiring authorization for
overtime can help but employers are liable if they know or should
have known that employee was working overtime
◦ Consistent enforcement and discipline for violators
◦ Time sheet certification by the employee
◦ Timesheet verification for accuracy by supervisor
• How do you know if an employee is working off the clock?

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• Signs of “off the clock work”
◦ Sending email or texts after hours
◦ Volume of work
◦ Statements from employee

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• Travel time – what is travel time when you work at home?
◦ Traveling to your office?
◦ Driving to Starbucks to work?
◦ Traveling to a meeting at another location?
◦ Coming to the office one morning?

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• Travel time – what is travel time when you work at home?
• Traveling to your office (commuting) is not compensable
◦ Walking to your home office is not compensable – ordinary
commute
◦ Driving to Starbucks to work is probably not compensable
• Traveling away from the office to work is compensable
◦ What if employee works from home but has to travel to a meeting
at another location--compensable
◦ What if employee works at home but has to come to the office
one morning—not compensable
◦ Address these issues in your telecommuting agreement

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Telecommuting Legal Issues: Safety
• OSHA requires employers to provide a safe work place,
free from hazards that could cause serious harm or injury
• However, the DOL has issued a policy statement declaring
that it will not hold companies responsible for the safety
of telecommuting employees’ home offices
◦ The DOL stated that it would not inspect employees’ homes but
that if it received a complaint it would refer the matter to the
employer for investigation and appropriate remedial action
◦ Note that the New York DOL has taken a slightly different position
and declared that employers in New York are responsible for
employee safety, even in a home office
• Are you off the hook?

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• From a worker’s compensation point of view, employers
remain liable for workers’ injuries even when the injury occurs
in a home office, as long as the injury arose in the “course and
scope” of employment
• Employers should check with their workers’ compensation
carriers and ensure that the carrier provides the same coverage
for work-related injuries at remote locations as it does for injuries
sustained in the main office

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• Strategies to limit liability:
◦ Employer must take reasonable steps to ensure safe home
working environment
◦ Asking telecommuters to designate one room of their house as a
home office
◦ Restricting the hours the telecommuter is allowed to work
◦ Prohibit meeting third parties at home if that is viable
◦ A signed acknowledgement from the employee that injuries which
occur outside the designated location, or outside the designated
hours, will not be covered through workers compensation
• Accident reporting is same as if at worksite

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Telecommuting Legal Issues: Insurance
• An Employer should review its existing insurance policies to
be certain it is adequately protected from any additional liability
that could result from telecommuting
• The telecommuting agreement and policy should establish that
the employer is not liable for any injuries or damage to persons
or property sustained by family members or third parties, and that
all business meetings must be held at the employer’s work site
• Employee should be encouraged to review their homeowner's
or renter’s insurance to determine if home office liabilities are
covered under the policy and should consider purchasing a rider
if they are not

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Telecommuting Legal Issues: Posters
• State and federal laws require employers to post certain
notices for employees in a place employees tend to frequent
such as break rooms or common areas
◦ Examples: minimum wage posters, notices regarding unemployment and
disability insurance, and workers’ compensation notices
◦ The posting laws contain no exception for telecommuters
◦ Telecommuters who come into the office on a regular basis are
presumed to have had access to the posters but for those employees
who work remote on an extended basis should be made aware of the
postings as they go up
◦ This can be done by an email announcing the new posting (and its
location in the office) and encouraging the employee to view it at his or
her earliest opportunity

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Telecommuting Legal Issues: Confidentiality
• Confidentiality when employee works at home or remotely
◦ BYOD (Bring Your Own Device)—allow employees to use their
own phones, computers, and the like
◦ Tension between privacy and need for access
◦ Need a BYOD policy which addresses
 Monitoring by company
 Accessing by company
 Wiping/deleting by company in case of loss/theft/termination
 Use of drobox and the like
◦ Discovery of personal computers and devices if there is a legal
need to obtain documents

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• BYOD Policy
◦ What devices are permitted for work use
◦ What support will be provided
◦ If employee does use personal devices,
Company will have access
◦ Not using open wi-fi—who pays?
◦ Who owns what apps and what data
◦ What happens when employee exits

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• Some jobs have extra concerns
◦ HIPAA documents
◦ Financial information
◦ Trade secret information
• Are these addressed in the home
environment?

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Telecommuting Legal Issues: Multiple states
• Working in multiple states
◦ Tax issues
◦ Things can get tricky when, say, an employee who’s on the payroll
of a Utah Company works from his/her home in Idaho
◦ State laws are often very specific about such things as methods of
tax withholding, workers’ compensation coverage, unemployment
and the like
◦ Even zoning laws can come into play--some jurisdictions prohibit
home offices in certain areas
◦ You may have to withhold and pay taxes for both states

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Telecommuting Legal Issues: Multiple states
• In general, employees are covered by the labor laws of the
state in which they perform work, regardless of where the
company’s offices are located
• This means that an employer may have to learn a whole
new set of laws if it allows an employee living in a different
state to telecommute
• For instance, an employer is located in Utah but the
employee works in California, the employer will have to
familiarize itself with both Utah and California law

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Telecommuting Legal Issues: Taxes
• Tax laws regarding home office deductions for the employee
are complex and somewhat unclear
• Employees should be encouraged to check with their own tax
consultant
◦ Especially for those employees who have an office available to them full-
time at their employer’s location but are working in a remote location for
their own convenience
• If applicable, Employers should clearly establish that they are
not responsible for the tax consequences associated with a
telecommuting arrangement and that the arrangement is being
requested by, and is for the benefit of, the employee

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Telecommuting Legal Issues: Terminating a Telecommuter
• How do you terminate a telecommuter?

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Telecommuting Legal Issues: Terminating a Telecommuter
• “Security will escort you out”
◦ It is one thing to change a password so the former employee can no
longer access the employer’s computer system, it is quite another to
gain access to an employee’s own computer hard drive to retrieve
work-related files saved there
◦ It may also be difficult to retrieve computers and other equipment
which has been provided to the telecommuting employee
◦ An employer has no legal right to enter an employee’s private
residence even if it is to retrieve company property
◦ The employer cannot hold an employee’s final paycheck “hostage”
pending return of all company-issued equipment
◦ These issues must be addressed by agreement and practical issues
must be considered in advance

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Legal Issues: Discrimination
• Certain employees may claim that
they were discriminated against by
not being allowed to telecommute
◦ Cannot assign or allow
telecommuting based on protected
classification, ex. Steering only
women toward telecommuting
• Avoid discriminating against those
who take advantage of the
polices—lack of promotions

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Legal Issues: Discrimination
• Lack of consistency
◦ Leads to discrimination claims
• Solution
◦ Written policy
◦ Legitimate, objective business
standards
◦ How to request
◦ Impact on benefits

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Scenarios
• Velez v. Novartis Pharmaceuticals, S.D. N.Y. 2010)—
class action alleging gender discrimination and pregnancy
discrimination. Plaintiffs alleged that while Novartis had
progressive written flex-time policies, the policies were not
followed. Those who used the policies had a “flexibility
stigma.” The jury agreed. Jury awarded $3 million in
compensatory damages to 12 women and $250 million in
punitive damages to the larger class.

34
Legal Issues: ADA
• Reasonable accommodate under ADA
◦ A physical or mental impairment that substantially limits one or more major life
activities
◦ Qualified individuals—able to perform the essential functions of the job with or
without a reasonable accommodation
◦ You will have to consider flexible working arrangements including telecommuting as
part of the interactive process
◦ If you allow telecommuting, this may create a precedent that flex work is reasonable
• Solutions
◦ Carefully review all requests and all jobs
◦ Realize that if you allow it for one person, that job may become “fair game”
◦ Be clear what essential job functions must be done

35
Legal Issues: ADA
• The ADA requires reasonable accommodation of disabled employees
◦ Working from home may be such a reasonable accommodation
◦ For some jobs, the nature of the work may easily allow an employee to
telecommute. In other jobs the nature of the work necessitates customer, client
or face to face contact.
◦ Critical for employer to develop a job description that sets forth the essential
functions of the job which then steers the dialogue regarding whether
telecommuting is a feasible alternative.
◦ If attendance at work is not an essential function of the job and telecommuting
is a reasonable alternative, employers may be required to accommodate at-
home work with such items as ergonomic chairs, keyboards, etc.
• Burden on employer to show accommodation was reasonable

36
Legal Issues: ADA
• EEOC guidance
◦ Employers aren’t required to have a telecommuting policy but
 If they have one, they must offer it to disabled employees
◦ Telecommuting may be a reasonable accommodation even if
the employer does not allow telecommuting generally
◦ Employers must engage in the interactive process
◦ Employers must look at a job’s essential functions
◦ Employees are not entitled to telecommute if there is another
workable accommodation

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Legal Issues: ADA
• Is physical attendance at worksite an essential function of
the job?
◦ Written job description
◦ Amount of time spent performing the function
◦ Work experience of past or present employees in same or similar
position
 Have other employees worked from home
◦ Need for teamwork
 This is changing with technology

38
Legal Issues: ADA
• Considerations
◦ Some jobs cannot be performed off site—food servers, cashiers,
truck drivers
◦ Does the employee supervise others?
◦ Special knowledge or skills that others must have ready access to?
◦ Does the employee need to provide or receive on site training?
◦ Need for on site meetings?
◦ Need for equipment or material that cannot be taken off site?
 Heavy equipment, confidential information
◦ Likelihood of reduced productivity?

39
Legal Issues: ADA
• Pauling v. Gates (E.D. Va. May 6, 2011) – work at home
was not reasonable where the employer required
employees to access classified information only in the work
place
• Humphrey v. Memorial Hospitals Assoc. (9th Cir. 2001) –
work at home might be reasonable for a medical
transcriptionist

40
Legal Issues: ADA
• Woodruff v. Peters (D.C. Cir. 2007) – held that working at
home could be a possible accommodation for a supervisor
who supervised a “self-directed” team
• Valdez v. Brent McGill and Muller Supply Co., Inc. (10th
Cir. 2012) – work at home not reasonable for a warehouse
manager because he could not perform functions such as
inventory counts, interacting with customers, and
supervising staff

41
Legal Issues: ADA
• EEOC v. Ford Motor Company
◦ Employee was a retail steel buyer who suffered from severe IBS
and wanted to telecommute
◦ Her job was to ensure steel supply for production-- highly
interactive
◦ Resale buyers would meet with suppliers at their sites and with
Ford stampers at Ford’s plant
◦ Some interactions occur by email and telephone
◦ Ford required resale buyers to work in the same building as
stampers so they can meet on a moment’s notice

42
Legal Issues: ADA
• First supervisor adjusted schedule:
◦ Allowed two trial opportunities to telecommute on ad hoc basis
◦ Plaintiff worked four 10-hour days - telecommuted as needed
◦ Each trial lasted one to two months - neither succeeded
◦ “Unable to establish regular and consistent work hours” and failed “to perform
the core objectives of the job”
• Supervisor also tried reporting tool (twice) specially designed to help
employees with medically based attendance issues - no improvement
• 2nd supervisor allowed Plaintiff to telecommute both during and after
core business hours but problems persisted

43
Legal Issues: ADA
• Employee had excessive absence and tardiness
• Absenteeism harmed colleagues:
◦ Teammates & supervisors had to pick up slack
◦ Absences caused resale-buyer team “stress and frustration”
◦ Compounded by Employee’s mistakes, suppliers were frustrated
• Consistently rated low for performance

44
Legal Issues: ADA
• Employee asked to telecommute up to 4 days/week in 2009:
◦ Doctor said this would reduce stress and lead to better attendance
• Ford’s practice and policy limited telecommuting for resale buyers:
◦ In practice: at most, one set day per week
◦ Practice consistent with policy, allows telecommuting only for:
 Jobs that do not require "face-to-face contact”
 Individuals who were “strong performers’” with strong time-management skills
• Employee admitted she could not perform 4 of 10 essential tasks
working from home

45
Legal Issues: ADA
• Ford denied request because:
◦ Job required “regular interactions” with her team and contacts
◦ “The spontaneous flow and exchange of information, which is
critical to the group problem-solving component of her job, would
be compromised”
◦ “Concerns with her performance and because of the
unpredictability of the schedule she was seeking”

46
Legal Issues: ADA
• Ford identified circumstances where telecommuting could
work: (1) Predictable schedule; (2) Strong-performing EE;
and (3) Consent to come to site as needed
• Ford offered:
◦ To help Employee find a new role
◦ To move her cubicle closer to the restroom
• Employee sued

47
Legal Issues: ADA
◦ District Court (E.D. MI): granted summary judgment to Ford on
failure to accommodate and retaliation claims
◦ 6th Circuit Panel: reversed (2-1)
 “Given the state of modern technology, it is no longer the case that jobs
suitable for telecommuting are ‘extraordinary’ or ‘unusual’”
◦ 6th Circuit En Banc: vacated panel decision, affirmed summary
judgment for Ford
 Most jobs require regular and predictable on-site attendance from
virtually all employees

48
Legal Issues: ADA
• Well-established general rule that regular attendance at
site is essential to most jobs
• Essential functions generally based on employer’s
“judgment" and written job description
• OK for most jobs to require regular, predictable on-site
attendance from all employees

49
Legal Issues: ADA
• EEOC’s own regulations support general rule, despite
EEOC’s position in Ford
◦ An employer may refuse a telecommuting request when, among
other things, the job requires "face-to-face interaction and
coordination of work with other employees," "in-person interaction
with outside colleagues, clients, or customers," and "immediate
access to documents or other information located only in the
workplace”

50
Legal Issues: ADA
• Why did Ford win?
◦ Patience—actions spanned multiple years
◦ Thoughtful analysis & action at each step
◦ Documented efforts and temporary nature of trial accommodations
◦ Three attempts to make it work
◦ Burden on/disruption to Employee’s co-workers existed and was
documented
◦ Employee had a history of poor performance – not only due to
attendance
◦ Common Sense: highly interactive job requires presence

51
Legal Issues: ADA
• Doak v. Johnson, 798 F.3d 1096 (D.C. Cir. 8/18/2015) –
Employer denied Employee’s request to work at home with
a later start time and terminated Employee for excessive
absences
• Court affirmed SJ for employer. No accommodation
required because employee would not have been able to
perform an essential function of her position – participating
in interactive, on-site meetings during normal business
hours on a regular basis

52
Legal Issues: ADA
• Fischer v. Pepper Hamilton LLP, (E.D.Pa. 2016) –
Employer terminated Employee for irregular attendance
outside of agreed accommodation of late start and extended
office hours
• Court denied SJ on failure to accommodate claim. Court
generally followed Ford, but explained that the inquiry into
whether regular, on-site attendance constitutes an essential
function of a job depends in large part on the nature of the
job itself. Unlike Ford plaintiff, Employee’s job as attorney
largely conducting document reviews online was not of
nature that required regular on-site attendance

53
Legal Issues: ADA
• 5 questions to ask when considering telecommuting as an
accommodation:
1. What are essential functions of the job – must the duties be
performed in the workplace?
2. What is company policy and practice on telecommuting?
3. Is the requested accommodation reasonable?
4. Are there other accommodations that would effectively
accommodate the employee’s limitations?
5. What hardship, if any, would be imposed if telecommuting is
allowed?

54
Telecommuting Legal Issues: Agreement
• One way to address the many issues with telecommuting is to have a
telecommuting agreement
◦ Expectations—specific schedule at home, specific schedule at work, duties
◦ Whether the employee’s employment will change due to participation in a telecommuting
program, including such terms as compensation and work responsibilities
◦ Arrangement may be terminated or amended – it is not a contract
◦ Application of company policies at home, including schedule and time-keeping
 What about dress code?
◦ A provision that the employee should work overtime only with the advanced written
approval of his/her supervisor
◦ Require recording of sick days, vacation, leave
◦ Establish obligation to communicate at regular intervals
◦ Employee must agree to attend face-to-face meetings, on-demand and/or periodic office
visits

55
• Telecommuting agreement (cont.)
◦ Privacy policies, access to computers, and monitoring of computers--employer has the
right to monitor equipment such as the computer, voicemail, etc. at any time
◦ Return of equipment, files and the like upon termination
◦ Property checklist
◦ Business use of company software and hardware
◦ Home office inspections
◦ Expense reimbursement policy
◦ Employer retains ownership and control of all hardware, software, data, furnishings and
supplies provided and/or paid for by the employer
◦ Hardware, software, data, furnishings, supplies and related equipment may not be
removed from the designated at-home workplace without the prior written consent of the
employer

56
◦ Employer is not liable for injuries to the telecommuter while working
outside of the designated workspace at home and/or outside the
agreed-upon work hours
◦ Employer is not liable for injuries to third-parties who may be
present at the employee work space
◦ Employee to adhere to company guidelines for reporting injuries or
accidents involving the employee (or others) while working at home
◦ A provision that absent an emergency, the employee will not be
using the telecommuting arrangement as a substitute for regular
child care

57
◦ The telecommuting arrangement (as well as the underlying
employment relationship) can be terminated at any time, by either
party, with or without notice
◦ The term of the agreement (be cautious that you do not
inadvertently create an employment agreement for a set duration)
◦ A provision that the employer will not be responsible for loss, costs
or damages resulting from cessation as a telecommuter

58
◦ A specific agreement by the employee to be subject to and comply
with all employer policies, practices and instructions (with particular
emphasis on all of the telecommuting policies and procedures) and
that a violation of any policies may result in discontinuance of the
telecommuting arrangement
◦ A specific understanding by the employee that the employer will not
be responsible for any operating costs associated with the employee
using his/her home as an alternative work site or if employer will be
responsible, which expenses
◦ An affirmation by the employee that he/she has read the agreement,
understands the document and agrees to abide by its terms.

59
Legal Issues
• Plan a strategy
◦ Which departments can successfully allow telecommuting
◦ Which employees can successfully handle telecommuting
◦ Start a pilot program
◦ Train your managers on the policy
◦ Make sure they apply the rules equally
◦ Make sure managers maintain regular contact
◦ Infrastructure
 Time tracking software

60
• Christina M. Jepson
801.536.6820
cjepson@parsonsbehle.com
Thank You

Telecommuting: Legal Issues and Solutions

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