The COVID-19 pandemic has forever changed the workplace as businesses were forced to abruptly transition from the conventional “in office” model to one in which employees worked remotely from home offices. Although offices are beginning to reopen, it appears that some semblance of employee remote work arrangements is here to stay.
Given this new and unprecedented reality, employers must contemplate a myriad of legal considerations and obligations that specifically arise from permitting employees to work from home. Unfortunately, many employers are uninformed about these legal issues and, as such, are ill-prepared for mitigating a maze of potential liabilities.
Here are five facts that employers should be aware of regarding remote work arrangements:
- An employer may be subject to the state and local laws of the locations in which its employees are working remotely.
When an employee works in a different state than where the employee’s main office is located, the employer may have to comply with the state and local laws of the state in which the employee is physically working. (For example, if an employee of a North Carolina company works remotely from his/her Virginia home, the company may be subject to the laws of Virginia.) This may require the employer to register as a foreign business in the state where the employee is working remotely, follow different tax and withholding requirements, pay additional premiums for workers’ compensation insurance, or comply with more expansive employee protections such as state and local employment laws pertaining to discrimination, wage and hour regulations, and leave entitlement.
An employer can be held liable for an employee who is injured while working from home.
An employer’s obligation to provide employees with a work environment free of recognized hazards likely to cause harm extends to employees working from home. Similarly, as many courts have held that an employee’s home office is an extension of the employer’s workplace, employees who are injured in their home office while performing work-related functions may be covered by the employer’s worker’s compensation insurance.
The Fair Labor Standards Act applies to non-exempt remote working employees.
The Fair Labor Standards Act (FLSA) requires employers to pay non-exempt employees overtime pay for hours worked in excess of 40 hours in a work week at a rate not less than one and one-half times the employee’s regular rate of pay. In a normal office environment, employers use a variety of means to ensure that their employees’ work time is accurately recorded. However, this task becomes infinitely more difficult when employees are working remotely, and the employer may not be aware of whether an employee is working without authorization or “off the clock.” Without the proper processes and policies in place, an employer may find itself in violation of the FLSA’s wage and hour protections.
An employer may have to reimburse employees for expenditures associated with working from home.
Multiple states have enacted business expense reimbursement laws that require employers to reimburse employees for all “necessary expenditures or losses” incurred by the employee in connection with the employee’s performance of work duties. In states with robust and expansive business expense reimbursement laws (such as California and Illinois), an employer may have to reimburse an employee for home offices expenses such as a computer, a printer, office supplies, and even a share of an employee’s monthly internet or mobile telephone expenses.
Anti-discrimination and anti-harassment laws apply to remote work employees.
Employers have a continuing obligation to ensure that they comply with anti-discrimination and anti-harassment laws (e.g., Title VII of the Civil Rights Act of 1964, the Americans with Disabilities Act, etc.) regardless of whether an employee is working in an office or remotely from home. As such, an employer may be susceptible to harassment, discrimination, and retaliation claims that arise out of virtual forms of communication such as instant messaging and video conferencing.
These are just a handful of the many legal issues that employers may face with employees who work remotely. To learn the best practices for implementing and maintaining remote work arrangements, FTLF is hosting a two-part webinar on Navigating the Legal Pitfalls of Working From Home Arrangements. To register for this webinar, please visit https://learning.ftlf.com/content/navigating-legal-pitfalls-work-home-arrangements.