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