Telecommuting: What Are the Pros and Cons?

We have a few employees who want to work from home. While their work is the type of thing that can be done from home, we’re unsure if there are any legal risks we need to watch out for. Also, we’re concerned that their productivity will suffer. Do you have any advice for us? — T.F. in Ridgecrest

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Our CELA editors have some thoughts for you on the issue of telecommuting.

Many employers have recently dealt with the questions you’re facing. According to a 2005 survey by the Telework Advisory Group for WorldatWork, 45.1 million of the 135.4 million people working in America did at least some work from home during the month surveyed.

Generally, telecommuting works best when your business doesn’t need employees to be physically present to do their jobs. Jobs that adapt more easily to telecommuting include those in which employees already work independently—such as computer programming, writing and editing, data entry and word processing, graphic design and desktop publishing, and executive decision-making. Employees in positions where most of their contact is with customers or suppliers by telephone or computer—such as customer service and support— are also good candidates for telecommuting.

Pros and Cons

Telecommuting can actually offer several advantages for employers. While you can’t monitor employees as closely as you would if they were physically present in the office, many telecommuters report increased productivity due to decreased distractions. Employers of telecommuters also report decreased absenteeism and tardiness. The Telework Advisory Group estimates that employers can save more than 60% of absenteeism costs per teleworker. Also, the flexibility of a telecommute situation may make it less likely that telecommuters will need time off to deal with family crises or other emergencies. You may also be able to save on overhead on things like parking and office space.

The downsides can include not being able to provide adequate training or support for teleworkers. Security concerns may present special problems, such as maintaining the confidentiality of sensitive documents in a home office. Telecommuting can also lead to decreased teamwork and increased isolation of employees.

Legal Considerations

Although no specific California or federal statutes regulate telecommuting, you need to be aware that some laws could affect your arrangements:

1. Americans with Disabilities Act. Telecommuting may be one of the reasonable accommodation options you need to consider for a disabled employee. The Ninth Circuit Court of Appeals, which covers California, has ruled that working at home may be a reasonable accommodation when the essential job functions can be performed there, and it would cause no undue hardship to the employer. Here are some suggestions for handling telecommuting as an accommodation.
   • Assess job requirements. Whether telecommuting is a reasonable accommodation will depend on the position and the individual. Some jobs can’t be performed away from the office, such as those requiring a lot of teamwork. And telecommuting may not be workable if the employee lacks sufficient experience to work from home without direct supervision.
   • Update job descriptions. If you want a job to be performed in the office, make sure the job description reflects your reasons.You might spell out that teamwork and on-site training and supervision are necessary to perform the job properly.
   • Consider alternatives. If a disabled employee wants to telecommute and you have legitimate reasons for refusing, you can still meet your ADA obligations by offering an alternative accommodation that satisfies the individual’s needs. The employee doesn’t have the right to dictate an accommodation.
   • Evaluate effectiveness. It’s critical to periodically reevaluate whether an accommodation is working out. If it’s not, you have to explore whether other accommodations would enable the employee to perform essential job functions.
2. Family and Medical Leave. Eligible employees, including telecommuters, may take up to 12 weeks of leave in a one-year period for specified family and medical purposes. Keep in mind that any time a telecommuter spends working for you cannot be counted against the annual 12-week entitlement.
3. Wage and Hour. It’s critical to carefully monitor telecommuters’ work hours and to enforce rules limiting such hours. That’s because state and federal wage and hour rules apply to employees, regardless of whether they work in a traditional setting or a home office. And the law requires you to pay employees for all hours they work, even if you have issued rules prohibiting overtime work for nonexempt employees. For these reasons, carefully consider whether telecommuting is appropriate for nonexempt employees.

   If you permit nonexempt employees to telecommute, have them report their hours on a daily basis. You can also require telecommuters to obtain advance authorization from their supervisor before working overtime hours. If an employee works unauthorized hours, you can discipline them, but you’re still required to pay them for that time. Also, be sure to keep meticulous time and pay records for telecommuters.

4. Safety and Workers’ Compensation. The California Occupational Safety and Health Act requires employers to provide workers with a safe and healthy workplace—even if it’s in an employee’s home. It’s unlikely that Cal/OSHA will inspect a home office because telecommuting workers are unlikely to file a complaint about conditions in their home office. But a telecommuting employee who gets injured could file a workers’ comp claim. And if a third party is hurt in the employee’s home office, you could be sued for damages.

    

   Here are some suggestions on avoiding and managing these risks.

   • Enter into a written telecommuting agreement with workers. Set specific ground rules that employees must agree to in advance. For example, require that workers comply with all company policies and procedures, including those relating to safety, while working at home.
   • Require workers to complete self-certification safety inspection forms. Your questions could include whether a worker’s chair is adjustable and whether their computer monitor is positioned correctly.
   • Contact your insurance broker. Injuries to customers or clients from an employee’s grouchy dog or a fall down a dark stairway can expose your company to serious liability. And you can’t rely on your employee’s having the proper insurance to cover such claims. Ask your insurance broker to extend your company’s general liability insurance to the worker’s home location by adding an endorsement to your policy.
   • Review your workers’ compensation insurance policy. Some comp carriers require you to submit information regarding telecommuting arrangements, including your employee’s home address. Although it’s unlikely that a claim will be denied if you don’t do this, you may want to check with your insurer.
5. Tax Implications. Depending on the circumstances, telecommuters may be eligible to claim a home office deduction on their personal income taxes. The rules for this tax break are strict, so advise employees considering telecommuting to consult with a tax expert to determine whether the deduction is available to them.