State:

National
Telecommuting allows employees to work part or all of their standard workweek from a remote location, seamlessly "commuting" electronically. The concept of a "mobile workforce" tasking off-site has evolved from being a convenience to a business strategy to a business necessity.
Proven advantages of telecommuting for employers are reduced costs for work space, utilities, and other overhead; lower absenteeism; increased productivity, morale, and retention; a competitive edge in hiring in larger geographic recruiting areas; possible accommodation for certain workers; and helping employees balance work/family issues.
Schedules. Telecommuting can be informal, such as during special, short-term projects; on a regular basis, such as 1 or 2 days a week; a formal arrangement for 100 percent of work time; or as part of emergency planning for storms, natural disasters, power outages, quarantines, etc.
Locations. While most telecommuters work from a home office, there are other options, including satellite offices, "hoteling" in leased space on an as-needed basis, or mobile offices.
There are no direct federal laws that regulate private-sector telecommuting. However, there are certain ancillary laws employers should consider.
Fair Labor Standards Act (FLSA). Employers covered by FLSA must monitor hours of work by nonexempt employees and maintain records recording total hours worked each day and workweek (29 CFR 516.2(a)(7)). Nonexempt employees are covered by the FLSA's restrictions on minimum wage and overtime regardless of where they perform their jobs, including home offices. Therefore, a telecommuting agreement should require the telecommuter to report hours worked on a daily and weekly basis. Employees may keep timecards, but computer or telephone tracking systems that generate logs of hours worked are more reliable.
Because of these potential problems, some companies limit telecommuting to exempt employees. Trying to circumvent FLSA's overtime liability by transforming an exempt employee's job into a nonexempt clerical position or attempting to reclassify employees as independent contractors when they are working on company-supplied equipment could be questioned in an FLSA audit.
Covered employers are required to pay employees for all hours worked, regardless of whether they have issued rules prohibiting work beyond a prescribed number of hours. Therefore, an agreement should include a provision advising the employee not to work more than a specified number of hours a week without prior approval. Because of these potential problems, some companies limit telecommuting to exempt employees. Trying to circumvent FLSA's overtime liability by transforming an exempt employee's job into a nonexempt clerical position or attempting to reclassify employees as independent contractors when they are working on company-supplied equipment could be questioned in an FLSA audit.
Americans with Disabilities Act (ADA). The ADA requires a covered employer to make reasonable accommodations to allow a disabled individual to perform the essential functions of his or her job. While the ADA does not mention telecommuting as a potential reasonable accommodation, several courts have suggested that employers must consider allowing an employee to telecommute under certain circumstances. At the very least, the ADA requires an examination of each case to determine appropriate reasonable accommodations and whether such accommodation would be a "hardship." Employers offering telecommuting as a reasonable accommodation under the ADA should evaluate the essential functions of the employee's job to determine whether telecommuting is even feasible.
The 6th Circuit Court of Appeals has ruled that telecommuting may be a reasonable accommodation under the ADA whenever an employee can effectively perform all work-related duties at home, especially with advances in technology, However, the court was careful to clarify that it was “not rejecting the long line of precedent recognizing predictable attendance as an essential function of most jobs” (EEOC v. Ford Motor Co.,No. 12-2484 (6th Cir. Mich. 4/22/14)).
The 6th Circuit’s decision makes telecommuting an option that many employers will need to consider when an employee requests reasonable accommodation for a disability. When weighing a telecommuting request, employers should consider whether an employee’s physical presence is actually required in the workplace and should review communication options that may provide alternatives to physical attendance in the workplace.
Family and Medical Leave Act (FMLA). The availability of telecommuting may assist both the employee and employer by providing an alternative to taking a full leave by allowing an employee to telecommute full- or part-time on an intermittent basis. Note: While the FMLA does not prohibit working at home during leave, the U.S. Department of Labor has said that any time spent working for the company cannot count against the employee's federal allotment of 12 weeks of leave.
Occupational Safety and Health Administration (OSHA). OSHA will not hold companies responsible for the safety of their telecommuters' home offices. However, since the employer's workers' compensation carrier is responsible for any job-related injuries to an employee whether at home or the workplace, the employer may want to publicize and exercise the right to inspect home offices for safety standards.
State laws. Employers should determine whether their state has laws regulating telecommuting, especially with regard to workers' compensation. There are state laws regarding meal and rest breaks. Employees must also accept responsibility for any state tax consequences attendant on working at home and for complying with any local ordinances that would conflict with their ability to work at home.
Most states also have laws that make employers responsible for injuries that arise out of the employment relationship and occur in the course of employment. States also require employers to provide a safe workplace. This is a very complex and state-specific area of the law, so employers are advised to consult with an attorney when implementing a telecommuting plan.
Local requirements. Employees setting up a home office should look into any restrictions under local zoning regulations or other ordinances that would conflict with their ability to work from home.
State income taxes. Some states have reciprocity agreements so that employees who telecommute from a state other than the one where the employer is located do not face double taxation on their incomes; other states and their neighbors do not. It is best to contact your state tax department or seek advice from a local attorney. At this time there is no federal legislation on this issue.
Employer tax concerns. Some employees may be able to deduct expenses (rent, utilities, depreciation, and insurance, security system costs, and certain telephone costs) for a "home office” used exclusively as a place of business from their federal income taxes (Internal Revenue Code Sec. 280A). Expenses that may be deducted include depreciation and repairs, rent, utilities, insurance, and cost of security systems. Employers, however, should refrain from giving tax advice and refer employees to their own accountants or tax consultants.
Telecommuters from other states. Telecommuters residing in other states could inadvertently establish a physical presence in a state, giving rise to registration and tax issues. For example, if sales of goods or services were made in the other state, it could establish a presence; if administrative or support work was done, it would not. Employers may contact their state attorney general's office if this issue applies to their organization.
Telecommuting agreements cannot be all-inclusive and should be tailored to the particular nuances of a business. In setting out the obligations of both employer and employee, key points to consider are policy issues, operational issues, management issues, and security issues.
To preserve a company's normal prerogatives, such as disciplinary procedures and dismissal rights, the telecommuting agreement should state that it does not change the at-will nature of the employer/employee relationship as stated in the employee handbook. Also, compensation, benefits, and standard work hours (unless employer and employee specifically agree otherwise) are not affected by the agreement. The agreement should specify whether the telecommuter is an independent contractor or employee and clearly define the duties of the position and state that the agreement will be discontinued if the arrangement no longer serves the best interests of the company.
The telecommuter is expected to comply with all applicable company policies (e.g., conflict of interest, confidentiality, moonlighting, drug and alcohol use). The agreement should list specific job objectives and measurable performance goals and set a formal evaluation date to determine whether these goals have been met. Because telecommuting is an inappropriate substitute for child care or elder care, some employers require telecommuters to provide proof of adequate dependent care during work hours.
Essential provisions. Although agreements should be company-specific, there are certain issues that are essential. The agreement should define the telecommuting schedule and location. It should list the computer hardware and software or other office equipment that each party will supply, the terms of use, procedure for return of the equipment, and responsibility for equipment maintenance and repairs.
Equipment. Equipment training and technical support are two key criteria to a successful telecommuting program. Equipment orientation and a structured training program prevent future technical headaches. The ready availability of technical support is also essential.
Procedures. The agreement should detail the minimum response time for answering voice or electronic mail from other employees, customers, suppliers, etc., and define the steps for keeping in touch with the office. Establish a policy requiring all telecommuters to attend regular staff or team-building meetings and make contingency plans for attending short-notice, emergency meetings.
Expenses. The agreement should also discuss and define employer-reimbursable expenses, such as Internet access charges, long-distance calls, courier or express mail services, utility charges, and supplies. Employers should also clearly define the terms of use for these services.
A reliable, efficient telecommuting program should:
• Require workers wishing to telecommute to write a proposal outlining how they will meet requirements of the job, maintain motivation, communicate with managers, and maintain the home office.
• List specific job objectives and measurable performance goals and set a formal evaluation date to determine whether these goals have been met.
• Create a training program that covers use of software, attendance requirements, response times, and communication expectations.
• Provide support for technical problems (within a reasonable time frame of approximately 30 minutes).
Home offices should have a lockable door, a paper shredder, and a lockable file cabinet. The telecommuting agreement should address the safeguarding of company data files, trade secrets, and other proprietary information on electronic devices, even when owned by the employee, but used for work. Security measures must be followed strictly, and telecommuters must immediately report any breeches of data security. Employers should also retain the right to monitor e-mail, Internet use, and other communication by teleworkers during business hours, especially if the telecommuter is working with personal health information data covered under the Health Insurance Portability and Accountability Act (HIPAA) Privacy Rule. Please see the national Electronic Monitoring, national Privacy, national Health Information Privacy sections.
Under the Telework Enhancement Act of 2010, the head of each executive agency must establish and implement a policy authorizing employees to telework and incorporating telecommuting options into agency emergency action plans. Permission for a federal employee to telecommute requires a written telecommuting agreement between the employee and manager outlining specific work to be performed and the employee's participation in a telework training program. Employees who have been disciplined in the calendar year are not allowed to participate.
Temporary teleworking arrangements are an essential part of emergency planning for disruptions due to natural or man-made disasters, fuel shortages, or pandemic disease when employees are unable, or refuse to, come to work. Create a list of employees who could successfully perform their jobs, or elements of their jobs, through telecommuting. Investigate which employees would need laptops or have home computers that would suffice. Determine if these employees need high-speed Internet access in order to access company files remotely and whether they would need special software installed to perform company-related tasks, as well as what types of access to servers and files they would need.
Because many industries that employed homeworkers for sewing, embroidery, jewelry assembly, and other light production work paid by the piece have moved these processes offshore, the number of homeworkers in the United States has declined sharply.
Industrial homework is defined under FLSA as production by a person in a home, apartment, or other residential establishment, regardless of the source of the materials used in the production. Homeworkers are considered employees under the FLSA and are subject to its regulations, minimum wages, deductions, overtime, and recordkeeping requirements (29 USC 201). Many states also have regulations concerning homeworkers.
Home worksites are inspected only if the government receives a complaint or a referral or, in rare instances, when the work involves dangerous materials.
Last reviewed June 2014.
Related Topics:
National
Telecommuting allows employees to work part or all of their standard workweek from a remote location, seamlessly "commuting" electronically. The concept of a "mobile workforce" tasking off-site has evolved from being a convenience to a business strategy to a business necessity.
Proven advantages of telecommuting for employers are reduced costs for work space, utilities, and other overhead; lower absenteeism; increased productivity, morale, and retention; a competitive edge in hiring in larger geographic recruiting areas; possible accommodation for certain workers; and helping employees balance work/family issues.
Schedules. Telecommuting can be informal, such as during special, short-term projects; on a regular basis, such as 1 or 2 days a week; a formal arrangement for 100 percent of work time; or as part of emergency planning for storms, natural disasters, power outages, quarantines, etc.
Locations. While most telecommuters work from a home office, there are other options, including satellite offices, "hoteling" in leased space on an as-needed basis, or mobile offices.
There are no direct federal laws that regulate private-sector telecommuting. However, there are certain ancillary laws employers should consider.
Fair Labor Standards Act (FLSA). Employers covered by FLSA must monitor hours of work by nonexempt employees and maintain records recording total hours worked each day and workweek (29 CFR 516.2(a)(7)). Nonexempt employees are covered by the FLSA's restrictions on minimum wage and overtime regardless of where they perform their jobs, including home offices. Therefore, a telecommuting agreement should require the telecommuter to report hours worked on a daily and weekly basis. Employees may keep timecards, but computer or telephone tracking systems that generate logs of hours worked are more reliable.
Because of these potential problems, some companies limit telecommuting to exempt employees. Trying to circumvent FLSA's overtime liability by transforming an exempt employee's job into a nonexempt clerical position or attempting to reclassify employees as independent contractors when they are working on company-supplied equipment could be questioned in an FLSA audit.
Covered employers are required to pay employees for all hours worked, regardless of whether they have issued rules prohibiting work beyond a prescribed number of hours. Therefore, an agreement should include a provision advising the employee not to work more than a specified number of hours a week without prior approval. Because of these potential problems, some companies limit telecommuting to exempt employees. Trying to circumvent FLSA's overtime liability by transforming an exempt employee's job into a nonexempt clerical position or attempting to reclassify employees as independent contractors when they are working on company-supplied equipment could be questioned in an FLSA audit.
Americans with Disabilities Act (ADA). The ADA requires a covered employer to make reasonable accommodations to allow a disabled individual to perform the essential functions of his or her job. While the ADA does not mention telecommuting as a potential reasonable accommodation, several courts have suggested that employers must consider allowing an employee to telecommute under certain circumstances. At the very least, the ADA requires an examination of each case to determine appropriate reasonable accommodations and whether such accommodation would be a "hardship." Employers offering telecommuting as a reasonable accommodation under the ADA should evaluate the essential functions of the employee's job to determine whether telecommuting is even feasible.
The 6th Circuit Court of Appeals has ruled that telecommuting may be a reasonable accommodation under the ADA whenever an employee can effectively perform all work-related duties at home, especially with advances in technology, However, the court was careful to clarify that it was “not rejecting the long line of precedent recognizing predictable attendance as an essential function of most jobs” (EEOC v. Ford Motor Co.,No. 12-2484 (6th Cir. Mich. 4/22/14)).
The 6th Circuit’s decision makes telecommuting an option that many employers will need to consider when an employee requests reasonable accommodation for a disability. When weighing a telecommuting request, employers should consider whether an employee’s physical presence is actually required in the workplace and should review communication options that may provide alternatives to physical attendance in the workplace.
Family and Medical Leave Act (FMLA). The availability of telecommuting may assist both the employee and employer by providing an alternative to taking a full leave by allowing an employee to telecommute full- or part-time on an intermittent basis. Note: While the FMLA does not prohibit working at home during leave, the U.S. Department of Labor has said that any time spent working for the company cannot count against the employee's federal allotment of 12 weeks of leave.
Occupational Safety and Health Administration (OSHA). OSHA will not hold companies responsible for the safety of their telecommuters' home offices. However, since the employer's workers' compensation carrier is responsible for any job-related injuries to an employee whether at home or the workplace, the employer may want to publicize and exercise the right to inspect home offices for safety standards.
State laws. Employers should determine whether their state has laws regulating telecommuting, especially with regard to workers' compensation. There are state laws regarding meal and rest breaks. Employees must also accept responsibility for any state tax consequences attendant on working at home and for complying with any local ordinances that would conflict with their ability to work at home.
Most states also have laws that make employers responsible for injuries that arise out of the employment relationship and occur in the course of employment. States also require employers to provide a safe workplace. This is a very complex and state-specific area of the law, so employers are advised to consult with an attorney when implementing a telecommuting plan.
Local requirements. Employees setting up a home office should look into any restrictions under local zoning regulations or other ordinances that would conflict with their ability to work from home.
State income taxes. Some states have reciprocity agreements so that employees who telecommute from a state other than the one where the employer is located do not face double taxation on their incomes; other states and their neighbors do not. It is best to contact your state tax department or seek advice from a local attorney. At this time there is no federal legislation on this issue.
Employer tax concerns. Some employees may be able to deduct expenses (rent, utilities, depreciation, and insurance, security system costs, and certain telephone costs) for a "home office” used exclusively as a place of business from their federal income taxes (Internal Revenue Code Sec. 280A). Expenses that may be deducted include depreciation and repairs, rent, utilities, insurance, and cost of security systems. Employers, however, should refrain from giving tax advice and refer employees to their own accountants or tax consultants.
Telecommuters from other states. Telecommuters residing in other states could inadvertently establish a physical presence in a state, giving rise to registration and tax issues. For example, if sales of goods or services were made in the other state, it could establish a presence; if administrative or support work was done, it would not. Employers may contact their state attorney general's office if this issue applies to their organization.
Telecommuting agreements cannot be all-inclusive and should be tailored to the particular nuances of a business. In setting out the obligations of both employer and employee, key points to consider are policy issues, operational issues, management issues, and security issues.
To preserve a company's normal prerogatives, such as disciplinary procedures and dismissal rights, the telecommuting agreement should state that it does not change the at-will nature of the employer/employee relationship as stated in the employee handbook. Also, compensation, benefits, and standard work hours (unless employer and employee specifically agree otherwise) are not affected by the agreement. The agreement should specify whether the telecommuter is an independent contractor or employee and clearly define the duties of the position and state that the agreement will be discontinued if the arrangement no longer serves the best interests of the company.
The telecommuter is expected to comply with all applicable company policies (e.g., conflict of interest, confidentiality, moonlighting, drug and alcohol use). The agreement should list specific job objectives and measurable performance goals and set a formal evaluation date to determine whether these goals have been met. Because telecommuting is an inappropriate substitute for child care or elder care, some employers require telecommuters to provide proof of adequate dependent care during work hours.
Essential provisions. Although agreements should be company-specific, there are certain issues that are essential. The agreement should define the telecommuting schedule and location. It should list the computer hardware and software or other office equipment that each party will supply, the terms of use, procedure for return of the equipment, and responsibility for equipment maintenance and repairs.
Equipment. Equipment training and technical support are two key criteria to a successful telecommuting program. Equipment orientation and a structured training program prevent future technical headaches. The ready availability of technical support is also essential.
Procedures. The agreement should detail the minimum response time for answering voice or electronic mail from other employees, customers, suppliers, etc., and define the steps for keeping in touch with the office. Establish a policy requiring all telecommuters to attend regular staff or team-building meetings and make contingency plans for attending short-notice, emergency meetings.
Expenses. The agreement should also discuss and define employer-reimbursable expenses, such as Internet access charges, long-distance calls, courier or express mail services, utility charges, and supplies. Employers should also clearly define the terms of use for these services.
A reliable, efficient telecommuting program should:
• Require workers wishing to telecommute to write a proposal outlining how they will meet requirements of the job, maintain motivation, communicate with managers, and maintain the home office.
• List specific job objectives and measurable performance goals and set a formal evaluation date to determine whether these goals have been met.
• Create a training program that covers use of software, attendance requirements, response times, and communication expectations.
• Provide support for technical problems (within a reasonable time frame of approximately 30 minutes).
Home offices should have a lockable door, a paper shredder, and a lockable file cabinet. The telecommuting agreement should address the safeguarding of company data files, trade secrets, and other proprietary information on electronic devices, even when owned by the employee, but used for work. Security measures must be followed strictly, and telecommuters must immediately report any breeches of data security. Employers should also retain the right to monitor e-mail, Internet use, and other communication by teleworkers during business hours, especially if the telecommuter is working with personal health information data covered under the Health Insurance Portability and Accountability Act (HIPAA) Privacy Rule. Please see the national Electronic Monitoring, national Privacy, national Health Information Privacy sections.
Under the Telework Enhancement Act of 2010, the head of each executive agency must establish and implement a policy authorizing employees to telework and incorporating telecommuting options into agency emergency action plans. Permission for a federal employee to telecommute requires a written telecommuting agreement between the employee and manager outlining specific work to be performed and the employee's participation in a telework training program. Employees who have been disciplined in the calendar year are not allowed to participate.
Temporary teleworking arrangements are an essential part of emergency planning for disruptions due to natural or man-made disasters, fuel shortages, or pandemic disease when employees are unable, or refuse to, come to work. Create a list of employees who could successfully perform their jobs, or elements of their jobs, through telecommuting. Investigate which employees would need laptops or have home computers that would suffice. Determine if these employees need high-speed Internet access in order to access company files remotely and whether they would need special software installed to perform company-related tasks, as well as what types of access to servers and files they would need.
Because many industries that employed homeworkers for sewing, embroidery, jewelry assembly, and other light production work paid by the piece have moved these processes offshore, the number of homeworkers in the United States has declined sharply.
Industrial homework is defined under FLSA as production by a person in a home, apartment, or other residential establishment, regardless of the source of the materials used in the production. Homeworkers are considered employees under the FLSA and are subject to its regulations, minimum wages, deductions, overtime, and recordkeeping requirements (29 USC 201). Many states also have regulations concerning homeworkers.
Home worksites are inspected only if the government receives a complaint or a referral or, in rare instances, when the work involves dangerous materials.
Last reviewed June 2014.
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