HR Management & Compliance

Is a Telecommuting Program Right for Your Business? Legal and Practical Considerations

It’s Monday morning, seven inches of snow have accumulated outside and the weatherman predicts another five to come.  Do you shut down your business operations or require your employees to report to work?  For many HR professionals, the above hypothetical has become a reality as the past several months brought snowstorms in the Midwest, nor’easters in the Northeast, fatal fires and mudslides in California, and devastating hurricanes throughout the South and Puerto Rico.telecommuting

For many businesses, there is another option short of closing shop or hoping reliable public transportation is still up and running: allowing employees to work from home.  However, before making such a decision, companies would be well-advised to understand and evaluate some key considerations.

1. Technology Implications

In the wake of recent data security breaches, employers should first determine whether their employees are equipped to work from home before implementing such a policy.  For example:

  • Do the employees need access to confidential information?
  • Can they safely transmit confidential information?
  • Do they have a home office space separate from where family members and houseguests frequent and might be able to see confidential information?
  • Do they have a work-issued laptop or are they restricted to using the family computer?

As the number of data breaches increases, so does the legislation aimed at protecting private information.  To date, 48 states have enacted breach notification laws.  For instance, Illinois’s breach notification statute, the Personal Information Protection Act (PIPA), requires entities to maintain “reasonable security measures to protect [personal information] from unauthorized access, acquisition, destruction, use, modification, or disclosure.”  Should a company suffer a breach impacting over 250 Illinois residents (e.g., customers in Illinois), PIPA requires the company to inform the residents of the breach, as well as provide notice to the Illinois attorney general either within 45 days from when the company discovered the breach or within 45 days from when it informed the residents of the breach, whichever is shorter.

Employers must be cautious in limiting their exposure as the repercussions of a data breach become more destructive and as companies’ privacy obligations become more stringent.  To that end, before allowing employees to telecommute out of mere convenience or circumstance, employers would be prudent to assess the feasibility of such arrangements from a technology and data security standpoint.

2. The Americans with Disabilities Act (ADA)

Work-from-home policies may also give rise to ADA issues and employers should proactively ensure their compliance with the federal statute.  For instance, if an employee calls the office on Monday morning asking to work from home simply to avoid driving in the snow, his employer may legally require him to report to work or use paid time off.  However, if the employee calls and says he wants to telecommute because the weather is aggravating his disability (or he cannot physically clear the snow needed to drive his vehicle), the employer may be obligated to grant his request as a reasonable accommodation under the ADA.

The ADA requires employers with 15 or more employees to provide a reasonable accommodation for qualified applicants and employees with disabilities.  The statute does not, however, burden employers with providing individuals with the exact accommodation they desire, nor does it require employers to provide an accommodation that would result in undue hardship, such as significant difficulty or expense.

In determining whether an accommodation poses an undue hardship, several factors are considered, including: the nature and cost of the accommodation, the financial resources and overall size of the business, and the impact the accommodation would have on the facility and its employees’ ability to perform their job duties. Taking these elements into account, allowing employees to work remotely is simply not a feasible option for every business.

For that reason, the ADA does not require employers to offer a work-from-home program to all employees.  However, if an employer does offer such a program, it must afford individuals with disabilities an equal opportunity to participate.  Conversely, if an employer does not have a telework program, permitting an individual to work from home may still be a reasonable accommodation, depending on the circumstances.  Accordingly, employers must carefully administer such policies so as to not run afoul of the ADA.

Practical Tips

  • The employer and the employee should discuss the individual’s specific request and review all of the essential job functions so that the employer understands why the disability might require a work-from-home accommodation and whether the employee’s particular job could be performed at home.
  • Employers should allow work-from-home arrangements as an accommodation only to the extent the disability necessitates it. For example, companies can allow a disabled individual who only experiences flare-ups with frigid weather to work from home only on those cold-weather days, rather than permitting a permanent work-from-home arrangement.

State Law Considerations. Simply abiding by the ADA, however, may not be enough.  Most states have enacted their own civil rights laws that mirror federal statutes, but in some instances, offer more protection than the ADA.  For example, the Minnesota Human Rights Act defines “disability” as “materially limiting a major life activity,” as opposed to the ADA’s “substantially limiting a major life activity.”  This one-word change to the definition broadened the meaning of “disability” such that employees’ protections, and employers’ obligations, are more expansive.

Similarly, Wisconsin defines what is considered a “reasonable” accommodation more broadly than the ADA in some circumstances.  While a company’s approach to an employee’s work-from-home accommodation request may avoid ADA liability, employers should refer to their state’s equivalent to ensure local compliance, as well.

3. Wage and Hour Compliance

In implementing work-from-home policies, employers must be vigilant in wage and hour compliance.  One of the biggest concerns facing employers is that nonexempt employees may claim that they worked “off the clock” and are entitled to overtime when they did not in fact work the hours claimed.  Conversely, employers must be wary of those employees who do work “off the clock” but do not record their hours such that they are compensated properly.

Unfortunately, both scenarios leave companies vulnerable to single-plaintiff, and even class/collective action, lawsuits under federal and state wage and hour laws.  Accordingly, employers must proactively ensure compliance with their wage and hour obligations.

Practical Tips

  • Determine which wage and hour laws apply. For instance, some states have obligations beyond the Fair Labor Standards Act (FLSA) for overtime, meal and rest breaks, additional pay on the seventh day of work, etc. If a telecommuting employee lives in a state that affords protections beyond the FLSA, the employer should apply the protections of the state in which the employee actually did the work.
  • Adopt and regularly enforce clear policies regarding work hours, overtime, and timekeeping, as well as a zero-tolerance policy for off-the-clock work.
  • Implement a virtual private network (VPN) or electronic timekeeping system that tracks the time an employee is “logged on” or that requires the employee’s certification that all the time entered is accurate, and conduct periodic audits of these systems.

One Size Does Not Fit All

When determining whether work-from-home arrangements are feasible, companies must engage in an individualized analysis, not only based on the nature of the business but also based on the specific employee requesting to telecommute.

Things to Consider

  • Is the employee requesting to work from home because of a disability? If so, employers must engage in a thorough ADA, and possibly state-law equivalent, analysis, including in most instances, a robust interactive dialogue with the employee and possibly, medical experts.
  • Can the employee’s position realistically be done from home? For example, a retail cashier cannot complete his job duties from home whereas an accountant may be able to do so without disrupting company operations.
  • Does the employee’s position require in-person interaction with other employees or clients? If so, to what extent is the in-person interaction required and can it be achieved through phone or video-conferencing?
  • Will the nature of the work environment be impacted by diminished co-worker interaction?
  • Will the telecommuting employee be able to effectively supervise his employees or effectively receive supervision from his manager?

Ultimately, while telecommuting policies appear attractive (especially on those inclement weather days when business operations are compromised), companies should nevertheless conduct a tailored analysis specific to the employee and the business before making the call on adopting a work-from-home program.

Keemya Maghsoudi Keemya Maghsoudi is an associate in Littler’s Chicago office. She represents management in several areas of labor and employment law on a broad range of matters.

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