There are no direct federal laws that regulate private-sector
telecommuting. However, there are certain ancillary laws employers should
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
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
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.