the virtual office: practical considerations in establishing and implementing a telecommuting...

The Virtual Office: Practical Considerations in Establishing and

Implementing a Telecommuting Program

Presented By: Toni Anne Nichels, Esq.Senior Managing Counsel

Xerox Corporation

Part One

The Pros and Cons of Telecommuting

What is Telecommuting?

• Telecommuting is a flexible work arrangement that allows an employee to work at home or at another satellite location during all or some portion of the workweek.

• Telecommuting is best suited for jobs that require independent work, little face to face interaction, concentration, a measurable work product, and output-based (as opposed to time-based) monitoring.

• Telecommuting may not be suitable if the job requires extensive face to face contact with clients or customers, frequent access to materials that cannot leave the central office or special facilities, equipment or clearance that cannot be duplicated at an alternative work site.

May 4, 2015 UWWP - Toni Anne Nichels, Esq. 3

How Prevalent is Telecommuting?

• A recent Gardner Group study indicated that by the year 2016, 500 million workers worldwide will be involved in some form of telecommuting.

• The U.S. Department of Labor’s Bureau of Labor Statistics Report recently noted that 48.2 million salaried employees are paid an average of 15 hours per week for work performed at home.

• Reliable estimates of the number of telecommuters in the United States are difficult to obtain because of the wide variety of work-at-home arrangements and statistical methods used in surveys but most experts agree that the number of telecommuters continues to increase by double digits each year.

May 4, 2015 UWWP - Toni Anne Nichels, Esq. 4

May 4, 2015 5UWWP - Toni Anne Nichels, Esq. 5

The Advantages of Telecommuting for Employees

• Employees benefit from telecommuting because it affords:– Improved quality of life– More flexibility in scheduling work time– More flexibility in deciding where to live– Decreased transportation and commuting costs– Increased job satisfaction– More comfortable work environment


The Advantages of Telecommuting for Employers

• Employers benefit from telecommuting in the following areas:– Recruitment- makes the company more attractive by offering new

and flexible work arrangements and expands the applicant pool beyond geographic boundaries

– Retention- provides a desirable work/life balance and offers a flexible alternative to relocation

– Office Costs- reduces total office space requirements, promotes office elimination or office sharing and reduces associated rental costs

– Productivity- decreases stress level, improves morale, decreases travel time


The Disadvantages of Telecommuting for

Employees

• Perceived (or real) hindrance of career advancement

• Lack of support services• Isolation and lack of interaction with co-workers• Household distractions• Reduced living space• Less boundaries between work and home


The Disadvantages of Telecommuting for

Employers

• Management resistance and skepticism

• Control/Supervision Issues

• Culture change (shift from managing attendance to managing performance)

• Start-up and operating costs (screening candidates, putting a policy in place, technology compatibility)

• Security of data/information stored and accessed remotely

Part Two

Employment Law Compliance Issues


Fair Labor Standards ActNon-Exempt Employees

• FLSA applies to all employees regardless of where they work.• Generally you are required to pay overtime at a rate of one and a half

times the regular rate of pay for hours worked in excess of 40 in a given week.

• Non-exempt employees. Employees are entitled to be paid for all hours they work regardless of whether they work in an office or at home and regardless of any policy that requires employer approval before working overtime.

• Telecommuters work on an honor system since they don’t punch a clock. Employers must emphasize the importance of timely and accurate recordkeeping of hours worked.

• Non-exempt telecommuters are entitled to the same meal and rest period as office employees, again on a honor system.


Fair Labor Standards ActExempt Employees

• Telecommuting arrangements generally do not create compliance issues for exempt employees because, assuming they are properly classified, their compensation is not linked to hours worked.

• That being said, employers should be careful when crafting a telecommuting arrangement that the agreement does not contain any terms that could destroy the employee’s exempt status.

• Examples include terms requiring specific working hours or limiting an exempt employee’s discretion in certain decisions.


Fair Labor Standards ActIdentifying Compensable Work Time

• The FLSA does not define the term “work.” • The DOL regulations address whether an employee is “on duty” or

“off duty.” Because they work off site, employers may struggle to determine when a telecommuting employee is on duty.

• What about periods of inactivity? The time is usually compensable when it is 1) unpredictable; 2) is of short duration; and 3) the employee cannot effectively use the time for his or her own purpose.

• An employee is off duty when 1) the employee receives advance notice that he can leave the job site; and 2) the employee receives advance notice that he will not have to start work until a definite specified time.

• Otherwise, the de minimis rule applies.


Fair Labor Standards ActControlling “Off the Clock” Work

• General rule: it is the employer’s obligation to manage its employees to ensure that they are not working uncompensated hours.

• DOL has ruled that the mere existence of a policy or rule that prohibits an employee from working off the clock is insufficient to absolve the employer of liability.

• Must treat the violation as a disciplinary/performance issue• Measures that help control off the clock work: time sheet

certification by the employee; verification of time record accuracy by supervisor; communication of a policy with a prohibition and consequences; consistent enforcement and discipline for violators.


Telecommuting as a Reasonable Accommodation under the ADA

• The ADA (and concurrent state laws) require reasonable accommodation of disabled employees. Working from home may be such a reasonable accommodation.

• For some jobs, the nature of the work may easily allow an employee to telecommute. In other jobs the nature of the work necessitates customer, client or face to face contact.

• Critical for employer to develop a job description that sets forth the essential functions of the job which then steers the dialogue regarding whether telecommuting is a feasible alternative.

• If attendance at work is not an essential function of the job and telecommuting is a reasonable alternative, employers may be required to accommodate at-home work with such items as ergonomic chairs, keyboards, etc.

• Burden on employer to show accommodation was reasonable.


Home Office Safety under OSHA

• OSHA requires employers to provide a safe work place, free from hazards that could cause serious harm or injury.

• However, the USDOL issued a policy statement declaring that it would not hold companies responsible for the safety of telecommuting employees’ home offices.– The DOL stated that it would not inspect employees’ homes but

that if it received a complaint it would refer the matter to the employer for investigation and appropriate remedial action.

– Note that NYSDOL has taken a slightly different position and declared that the USDOL policy statement did not affect the position of the NYSDOL that employers in New York are responsible for employee safety, even in a home office.


Workers Compensation Issues

• General Rule: Employers remain liable for workers’ injuries even when the injury occurs in a home office, as long as the injury arose in the “course and scope” of employment.

• Employers should check with their workers’ comp carriers and ensure that the carrier provides the same coverage for work-related injuries at remote locations as it does for injuries sustained in the main office.

• Strategies to limit liability: asking telecommuters to designate one room of their house as a home office and/or restricting the hours the telecommuter is allowed to work together with a signed acknowledgement from the employee that injuries which occur outside that designated location, or outside those designated hours, will not be covered through workers comp.

May 4, 2015 17

Employee Posting Requirements

• State and federal laws require employers to post certain notices for employees in a place employees tend to frequent such as break rooms or common areas. Examples: minimum wage posters, notices regarding unemployment and disability insurance, and workers’ compensation notices.

• The posting laws contain no exception for telecommuters. Telecommuters who come into the office on a regular basis are presumed to have had access to the posters but for those employees who work remote on an extended basis should be made aware of the postings as they go up. This can be done by an email announcing the new posting (and its location in the office) and encouraging the employee to view it at his or her earliest opportunity.

UWWP - Toni Anne Nichels, Esq.

Part Three

Proprietary Information


Employees’ Rights to Intellectual Property Developed in the Scope of Their Employment

• Companies should require employees to execute agreements that provide for the assignment of any rights to intellectual property that is developed during employment and related to the business of the company.

• General presumption is that copyrighted works prepared by an employee within the scope of their employment are deemed to have vested in the employer unless the parties have entered into an agreement to the contrary, prudent employers require a specific assignment of rights.

• By requiring such an agreement, employers avoid ownership claims by employees who develop inventions, products or works on their own time and without the use of their employer’s resources.


Protection of Trade Secrets

• From unauthorized access of company-provided computers to the safeguarding of confidential information, the home office presents unique challenges to an employer.

• Problems are compounded when an employee uses his or her own personal equipment to telecommute, because the company incurs risk whenever sensitive company proprietary data resides on a computer to which the company may be denied access.

• To mitigate these risks, the telecommuting policy/agreement should outline the employer’s information security procedures. Specific provisions, and training as necessary, should be provided on retention, handling, disclosure and destruction of proprietary information and intellectual property.


Privacy Issues & Employee Monitoring

• General rule: It is legally permissible for an employer to monitor company email, voicemail and internet traffic IF the employee is on notice.

• Employee can subject the employer to liability for defamation, retaliation, sexual harassment and discrimination claims if they use email, voicemail and the internet inappropriately while out of the office.

• Employer should have a policy that applies to both in-office employees as well as telecommuters that stipulates content restrictions as well as the employer’s right to monitor and access all communications.

Part Four

Miscellaneous Employment Issues


Interstate Labor Laws

• In general, employees are covered by the labor laws of the state in which they perform work, regardless of where the company’s offices are located.

• This means that an employer may have to learn a whole new set of laws if it allows an employee living in a different state to telecommute.

• For instance, an employer is located in New York but the employee works in Connecticut. The employer will have to familiarize itself with both CT and NY law.


Employee Posting Requirements

• State and federal laws require employers to post certain notices for employees in a place employees tend to frequent, such as break rooms or common areas. Examples are the minimum wage posters, notices regarding unemployment and disability insurance and workers’ compensation notices.

• The posting laws contain no exception for telecommuters. • Fortunately federal and state agencies have been lax about

enforcing posting laws for telecommuters. Nonetheless, it is a good idea to ensure that telecommuters have at least seen the notices, even if they don’t have a set of posters in their home offices.


Tax Issues

• Tax laws regarding home office deductions for the employee are complex and somewhat unclear.

• Employees should be encouraged to check with their own tax consultant before assuming that the home office deduction will be allowed, especially for those employees who have an office available to them full-time at their employer’s location but are working in a remote location for their own convenience.

• Employers should clearly establish that they are not responsible for the tax consequences associated with a telecommuting arrangement and that the arrangement is being requested by, and is for the benefit of, the employee.

May 4, 2015 26

Insurance• Prior to implementing a telecommuting program, the

employer should review its existing insurance policies to be certain it is adequately protected from any additional liability that could result from telecommuting.

• The telecommuting agreement and policy should establish that the employer is not liable for any injuries or damage to persons or property sustained by family members or third parties, and that all business meetings must be held at the employer’s work site.

• Employee should be encouraged to review their homeowner's or renter’s insurance to determine if home office liabilities are covered under the policy and should consider purchasing arider if they are not.



Terminating a Telecommuter

• It is one thing to change a password so the former employee can no longer access the employer’s computer system and database, it is quite another to gain access to an employee’s own computer hard drive to retrieve work-related files saved there.

• It may also be difficult to retrieve computers and other equipment which has been provided to the telecommuting employee. An employer has no legal right to enter an employee’s private residence even if it is to retrieve company property.

• Nor can the employer hold an employee’s final paycheck “hostage” pending return of all company-issued equipment.

Part Five

Selection Criteria- How to choose the best candidate for a telecommuting

arrangement & successful supervision of telecommuters


Criteria for the Optimal Candidate

• Self-starter who can perform in an unstructured environment with minimal supervision;

• Self-disciplined individual who can separate job demands from home and family needs;

• Better than average performer with a history of solid performance appraisals;

• Person who enjoys working independently with minimal social interaction


Characteristics of a Less Desirable Telecommuter

• Needs face to face interaction with co-workers• Needs to be in an office environment to be

motivated to work;• Has duties that require constant supervision;• Does not have adequate space or infrastructure to

support the necessary technology to easily transfer their work load from office to home;

• Has customer or client-facing role.


Effective Supervision of Telecommuters

The best managers of telecommuters are effective at:• Empowering and trusting subordinates to balance priorities

and apply the right procedures consistent with given guidelines and sound judgment

• Encouraging feedback and communication• Aligning work with appropriate workers• Supporting telecommuting as a concept and working hard

to create and maintain successful telecommuting arrangements.


Great Expectations

• Effective management of a telecommuter continues with performance evaluations that stress work output and results (as opposed to time spent working.)

• Telemanagers should clearly define at the outset how the work will be assigned and reviewed in terms of quality, quantity, timeliness and other factors.

• Guidelines should allow for performance to be measured based on deliverable output at regular intervals to ensure that the telecommuting arrangement is successful for both parties.

May 4, 2015 33

Part Six

Development of a Telecommuting Program and Policy



Four Key Elements to Success

• Top management “buy in” and approval (based on need, perceived value add, costs and benefits)

• A formal program including a coordinator, policy, established selection criteria, a standard agreement signed by the employee, and an orientation process

• Education and preparation of the entire workforce at the launch of a telecommuting program to explain rationale and perceived benefits

• Training for telecommuting employees and their managers

May 4, 2015 35

Essential Elements in a Telecommuting Policy

• A definition of telecommuting• An indication that telecommuting is voluntary for

employees (and must be agreed upon by management.)• An indication of whether (and to what extent) the

employee’s terms and conditions of employment will change due to participation in a telecommuting program, including such terms as compensation and work responsibilities.

• The specific schedule the employee will be required to work as a telecommuter.

• A provision that the employee should work overtime only with the advanced written approval of his/her supervisor.


May 4, 2015 36

Checklist (con’t)

• A provision that the employer retains ownership and control of all hardware, software, data, furnishings and supplies provided and/or paid for by the employer.

• A provision stating that all hardware, software, data, furnishings, supplies and related equipment may not be removed from the designated at-home workplace without the prior written consent of the employer.

• An indication that the employer is not liable for injuries to the telecommuter while working outside of the designated workspace at home and/or outside the agreed-upon work hours.


May 4, 2015 37

Checklist (con’t)

• An indication that the employer is not liable for injuries to third-parties who may be present at the employee work space.

• An agreement by the employee to adhere to company guidelines for reporting injuries or accidents involving the employee (or others) while working at home.

• A provision that the employer has the right to monitor equipment such as the computer, voicemail, etc. at any time.

• A provision that absent an emergency, the employee will not be using the telecommuting arrangement as a substitute for regular child care.


May 4, 2015 38

Checklist (con’t)

• A statement that both the telecommuting arrangement (as well as the underlying employment relationship) can be terminated at any time, by either party, with or without notice.

• The term of the agreement (be cautious that you do not inadvertently create an employment agreement for a set duration.)

• A provision that the employer will not be responsible for loss, costs or damages resulting from cessation as a telecommuter.


May 4, 2015 39

Checklist (con’t)

• A specific agreement by the employee to be subject to and comply with all employer policies, practices and instructions (with particular emphasis on all of the telecommuting policies and procedures) and that a violation of any policies may result in discontinuance of the telecommuting arrangement.

• An affirmation by the employee that he/she has read the agreement, understands the document and agrees to abide by its terms.

• A specific understanding by the employee that the employer will not be responsible for any operating costs associated with the employee using his/her home as an alternative work site.


May 4, 2015 40

Sample policy provided

Questions?


the virtual office: practical considerations in establishing and implementing a telecommuting...

Documents

disadvantages of telecommuting

cons of telecommuting

telecommuting program

form of telecommuting

uwwp toni anne nichels

independent work

home slide

flexible work arrangements