Telecommuting

1. The Virtual Office: Practical
Considerations in Establishing and
Implementing a Telecommuting Program
Presented By: Toni Anne Nichels, Esq.
Senior Managing Counsel
Xerox Corporation

2. Part One
The Pros and Cons of Telecommuting

3. What is Telecommuting?
• Telecommuting is a flexible work arrangement that
allows an employee to work at home or at another
satellite location during all or some portion of the
workweek.
• Telecommuting is best suited for jobs that require
independent work, little face to face interaction,
concentration, a measurable work product, and output-
based (as opposed to time-based) monitoring.
• Telecommuting may not be suitable if the job requires
extensive face to face contact with clients or customers,
frequent access to materials that cannot leave the
central office or special facilities, equipment or
clearance that cannot be duplicated at an alternative
work site.
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4. How Prevalent is
Telecommuting?
• A recent Gardner Group study indicated that by the year 2016, 500
million workers worldwide will be involved in some form of
telecommuting.
• The U.S. Department of Labor’s Bureau of Labor Statistics Report
recently noted that 48.2 million salaried employees are paid an
average of 15 hours per week for work performed at home.
• Reliable estimates of the number of telecommuters in the United
States are difficult to obtain because of the wide variety of work-
at-home arrangements and statistical methods used in surveys but
most experts agree that the number of telecommuters continues to
increase by double digits each year.
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The Advantages of Telecommuting for Employees
• Employees benefit from telecommuting because it affords:
– Improved quality of life
– More flexibility in scheduling work time
– More flexibility in deciding where to live
– Decreased transportation and commuting costs
– Increased job satisfaction
– More comfortable work environment

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The Advantages of Telecommuting for Employers
• Employers benefit from telecommuting in the following
areas:
– Recruitment- makes the company more attractive by offering new
and flexible work arrangements and expands the applicant pool
beyond geographic boundaries
– Retention- provides a desirable work/life balance and offers a
flexible alternative to relocation
– Office Costs- reduces total office space requirements, promotes
office elimination or office sharing and reduces associated rental
costs
– Productivity- decreases stress level, improves morale, decreases
travel time

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The Disadvantages of Telecommuting for
Employees
• Perceived (or real) hindrance of career
advancement
• Lack of support services
• Isolation and lack of interaction with co-workers
• Household distractions
• Reduced living space
• Less boundaries between work and home

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The Disadvantages of Telecommuting for
Employers
• Management resistance and skepticism
• Control/Supervision Issues
• Culture change (shift from managing attendance to
managing performance)
• Start-up and operating costs (screening candidates, putting
a policy in place, technology compatibility)
• Security of data/information stored and accessed remotely

9. Part Two
Employment Law Compliance Issues

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Fair Labor Standards Act
Non-Exempt Employees
• FLSA applies to all employees regardless of where they work.
• Generally you are required to pay 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.
• Non-exempt employees. Employees are entitled to be paid for all
hours they work regardless of whether they work in an office or at
home and regardless of any policy that requires employer approval
before working overtime.
• 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.
• Non-exempt telecommuters are entitled to the same meal and rest
period as office employees, again on a honor system.

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Fair Labor Standards Act
Exempt Employees
• 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.
• That being said, employers should be careful when crafting
a telecommuting arrangement that the agreement does not
contain any terms that could destroy the employee’s
exempt status.
• Examples include terms requiring specific working hours
or limiting an exempt employee’s discretion in certain
decisions.

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Fair Labor Standards Act
Identifying Compensable Work Time
• The FLSA does not define the term “work.”
• The DOL regulations address whether an employee is “on duty” or
“off duty.” Because they work off site, employers may struggle to
determine when a telecommuting employee is on duty.
• 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 he can leave the job site; and 2) the employee receives
advance notice that he will not have to start work until a definite
specified time.
• Otherwise, the de minimis rule applies.

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Fair Labor Standards Act
Controlling “Off the Clock” Work
• General rule: it is the employer’s obligation to manage its
employees to ensure that they are not working
uncompensated hours.
• 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
• Measures that help control off the clock work: time sheet
certification by the employee; verification of time record
accuracy by supervisor; communication of a policy with a
prohibition and consequences; consistent enforcement and
discipline for violators.

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Telecommuting as a Reasonable
Accommodation under the ADA
• The ADA (and concurrent state laws) require 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.

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Home Office Safety under OSHA
• OSHA requires employers to provide a safe work place, free from
hazards that could cause serious harm or injury.
• However, the USDOL issued a policy statement declaring that it would
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 NYSDOL has taken a slightly different position and
declared that the USDOL policy statement did not affect the
position of the NYSDOL that employers in New York are
responsible for employee safety, even in a home office.

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Workers Compensation Issues
• General Rule: 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’ comp 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.
• Strategies to limit liability: asking telecommuters to designate one
room of their house as a home office and/or restricting the hours the
telecommuter is allowed to work together with a signed
acknowledgement from the employee that injuries which occur outside
that designated location, or outside those designated hours, will not be
covered through workers comp.

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Employee Posting Requirements
• 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.
UWWP - Toni Anne Nichels, Esq.

18. Part Three
Proprietary Information

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Employees’ Rights to Intellectual Property
Developed in the Scope of Their Employment
• Companies should require employees to execute agreements that
provide for the assignment of any rights to intellectual property that is
developed during employment and related to the business of the
company.
• General presumption is that copyrighted works prepared by an
employee within the scope of their employment are deemed to have
vested in the employer unless the parties have entered into an
agreement to the contrary, prudent employers require a specific
assignment of rights.
• By requiring such an agreement, employers avoid ownership claims by
employees who develop inventions, products or works on their own
time and without the use of their employer’s resources.

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Protection of Trade Secrets
• From unauthorized access of company-provided computers to the
safeguarding of confidential information, the home office presents
unique challenges to an employer.
• Problems are compounded when an employee uses his or her own
personal equipment to telecommute, because the company incurs risk
whenever sensitive company proprietary data resides on a computer to
which the company may be denied access.
• To mitigate these risks, the telecommuting policy/agreement should
outline the employer’s information security procedures. Specific
provisions, and training as necessary, should be provided on retention,
handling, disclosure and destruction of proprietary information and
intellectual property.

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Privacy Issues & Employee Monitoring
• General rule: It is legally permissible for an employer to
monitor company email, voicemail and internet traffic IF
the employee is on notice.
• Employee can subject the employer to liability for
defamation, retaliation, sexual harassment and
discrimination claims if they use email, voicemail and the
internet inappropriately while out of the office.
• Employer should have a policy that applies to both in-
office employees as well as telecommuters that stipulates
content restrictions as well as the employer’s right to
monitor and access all communications.

22. Part Four
Miscellaneous Employment Issues

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Interstate Labor Laws
• 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 New York but the
employee works in Connecticut. The employer will have
to familiarize itself with both CT and NY law.

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Employee Posting Requirements
• 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 are the minimum wage posters, notices
regarding unemployment and disability insurance and
workers’ compensation notices.
• The posting laws contain no exception for telecommuters.
• Fortunately federal and state agencies have been lax about
enforcing posting laws for telecommuters. Nonetheless, it
is a good idea to ensure that telecommuters have at least
seen the notices, even if they don’t have a set of posters in
their home offices.

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Tax Issues
• 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 before assuming that the home office
deduction will be allowed, 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.
• 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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Insurance
• Prior to implementing a telecommuting program, the
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 arider if they are not.
UWWP - Toni Anne Nichels, Esq.

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Terminating a Telecommuter
• It is one thing to change a password so the former
employee can no longer access the employer’s computer
system and database, 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.
• Nor can the employer hold an employee’s final paycheck
“hostage” pending return of all company-issued
equipment.

28. Part Five
Selection Criteria- How to choose the
best candidate for a telecommuting
arrangement & successful supervision
of telecommuters

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Criteria for the Optimal Candidate
• Self-starter who can perform in an unstructured
environment with minimal supervision;
• Self-disciplined individual who can separate
job demands from home and family needs;
• Better than average performer with a history of
solid performance appraisals;
• Person who enjoys working independently with
minimal social interaction

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Characteristics of a Less Desirable
Telecommuter
• Needs face to face interaction with co-workers
• Needs to be in an office environment to be
motivated to work;
• Has duties that require constant supervision;
• Does not have adequate space or infrastructure to
support the necessary technology to easily transfer
their work load from office to home;
• Has customer or client-facing role.

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Effective Supervision of
Telecommuters
The best managers of telecommuters are effective at:
• Empowering and trusting subordinates to balance priorities
and apply the right procedures consistent with given
guidelines and sound judgment
• Encouraging feedback and communication
• Aligning work with appropriate workers
• Supporting telecommuting as a concept and working hard
to create and maintain successful telecommuting
arrangements.

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Great Expectations
• Effective management of a telecommuter continues
with performance evaluations that stress work output
and results (as opposed to time spent working.)
• Telemanagers should clearly define at the outset how
the work will be assigned and reviewed in terms of
quality, quantity, timeliness and other factors.
• Guidelines should allow for performance to be
measured based on deliverable output at regular
intervals to ensure that the telecommuting arrangement
is successful for both parties.

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Part Six
Development of a Telecommuting
Program and Policy
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Four Key Elements to Success
• Top management “buy in” and approval (based on need,
perceived value add, costs and benefits)
• A formal program including a coordinator, policy,
established selection criteria, a standard agreement signed
by the employee, and an orientation process
• Education and preparation of the entire workforce at the
launch of a telecommuting program to explain rationale
and perceived benefits
• Training for telecommuting employees and their managers

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Essential Elements in a
Telecommuting Policy
• A definition of telecommuting
• An indication that telecommuting is voluntary for
employees (and must be agreed upon by management.)
• An indication of whether (and to what extent) the
employee’s terms and conditions of employment will
change due to participation in a telecommuting program,
including such terms as compensation and work
responsibilities.
• The specific schedule the employee will be required to
work as a telecommuter.
• A provision that the employee should work overtime only
with the advanced written approval of his/her supervisor.
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Checklist (con’t)
• A provision that the employer retains ownership and
control of all hardware, software, data, furnishings and
supplies provided and/or paid for by the employer.
• A provision stating that all 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.
• An indication that the 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.
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Checklist (con’t)
• An indication that the employer is not liable for injuries to
third-parties who may be present at the employee work
space.
• An agreement by the employee to adhere to company
guidelines for reporting injuries or accidents involving the
employee (or others) while working at home.
• A provision that the employer has the right to monitor
equipment such as the computer, voicemail, etc. at any
time.
• A provision that absent an emergency, the employee will
not be using the telecommuting arrangement as a substitute
for regular child care.
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Checklist (con’t)
• A statement that both 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.
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Checklist (con’t)
• 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.
• An affirmation by the employee that he/she has read the
agreement, understands the document and agrees to abide
by its terms.
• 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.
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Sample policy provided
Questions?
UWWP - Toni Anne Nichels, Esq.