Legal Issues to Consider When Transitioning to a Remote Workforce

What employers need to know about the legal implications of employing remote workers.

With huge numbers of employees working from home due to the coronavirus pandemic, and many companies planning to allow remote work on a long-term basis, employers are increasingly facing legal issues unique to remote work.

While shifting to a remote workforce can be challenging, a little planning can go a long way towards smoothing the transition. Here are some of the employment law issues you should consider when it comes to your remote workforce.

Wage and Hour Laws

Because wage and hour laws governing things like minimum wage, overtime, and meal and rest breaks vary from state to state, challenges can arise if remote workers are located in a number of different states. In addition, keeping track of overtime and meal and rest breaks can be more difficult when employees are working offsite.

Timekeeping and Overtime Pay for Remote Workers

For employers, it can be hard to know how many hours their remote employees are working. While this is not a problem with respect to most salaried employees, if your employees aren't exempt from the Fair Labor Standards Act (FLSA), you'll need to implement measures to prevent violations of federal and state overtime laws.

Under the FLSA, you're required to pay nonexempt workers at least one-and-a-half times their regular rate of pay for all hours worked in excess of 40 in a single work week. State laws may have more stringent requirements. Even if you tell your employees not to work more than the limits set by law, you might still have to pay them overtime if they do.

You can help prevent unauthorized overtime by making sure you have an electronic timekeeping system or other process in place for accurately recording the work hours of all employees, whether they work remotely or onsite. You should also consider implementing a remote work policy that:

  • requires employees to record all hours worked
  • sets clear work hours
  • expressly prohibits off-the-clock work, and
  • requires employees to obtain permission before working overtime.

Minimum Wage for Remote Workers

If a remote worker is located in a different state than your business, the law of the state where the employee is located generally determines the minimum wage for that worker. But minimum wage requirements vary widely from state to state and within individual states. For example, in Washington, D.C. and many large cities across the nation, the minimum wage in 2020 is $15.00 an hour, while in Georgia and Wyoming, the minimum wage is $5.15 an hour (except for employers who are subject to the FLSA, who must pay the federal minimum wage of $7.25 an hour).

If more than one law covers a remote worker, the law more favorable to your employee would generally apply. For example, if your employee is working remotely from Santa Monica, California, where the city's minimum wage is higher than the state's minimum wage, then the city's higher minimum wage law would apply.

If some of your out-of-state remote workers receive a different minimum wage than your in-state workers, but they all perform the same job duties, you may need to consider paying them the same wage across the board to avoid running afoul of antidiscrimination laws.

Antidiscrimination Laws for Remote Workers

Laws governing discrimination still apply even if you and your employees don't interact in person. Employers must ensure that they continue to comply with federal and state antidiscrimination laws, including:

Examples of issues that could potentially subject you to a discrimination claim in the remote work context include:

  • A disabled employee requires special technology or equipment in order to work from home, and you fail to provide a reasonable accommodation in accordance with the ADA even though doing so wouldn't cause you undue hardship.
  • Your remote workers are primarily women, and your onsite workers are primarily men, but you don't offer the remote workers the same support and opportunities for advancement as the onsite workers in accordance with Title VII, or your female remote workers perform the same job duties as the male onsite workers but you don't pay them the same wage as required by the Equal Pay Act.
  • An employee's manager regularly sends her suggestive emails and photos, but you fail to take action under Title VII and state sexual harassment laws.

To help prevent these issues from arising, you should ensure that your company policies address sexual harassment, discrimination, and employee rights to training and advancement. You should also remind remote workers of the need to continue abiding by discrimination policies and laws regardless of where they are physically located. You may want to consider having all remote workers read and acknowledge company policies addressing these issues, whether or not they have already done so.

Workers' Compensation for Remote Workers

Just because an employee is working from home doesn't mean they can't be injured on the job. Many courts consider home offices an extension of the workplace, meaning that if an employee is injured while working remotely, your business is just as likely to be legally responsible as it would be if the accident had occurred at the worksite.

A remote employee will generally be entitled to workers' compensation if the worker was injured in the course of work-related activities. While state laws differ as to what is considered work-related activity, employers can make it easier to evaluate whether claims are truly work-related by setting clear guidelines for remote employees' job duties and working hours.

Remote Work Policies

Creating and implementing a remote work policy that addresses the issues discussed above can help prevent them from arising in the first place. In addition, you may want to consider including guidelines on the following topics, among others, in your remote work policy:

  • the effective dates of the remote work plan
  • expectations for work performance and productivity
  • expectations for response time
  • reimbursement for equipment and business expenses (required in several states, including California, the District of Columbia, Illinois, Iowa, Massachusetts, Montana, and New York)
  • rest and meal periods (for example, instructing employees to keep track of unpaid meal periods or interrupted meal breaks)
  • cybersecurity (especially if the remote employee may be working from a public place)
  • protection of confidential information, and
  • the health and safety of the home office.

An experienced employment attorney can help you prepare a comprehensive remote work policy. With such a policy in place, you and your employees will be better protected against legal contingencies arising in the remote work context.

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