Image: Mike McCune
There are few employment law topics that have generated more heated debate recently than the concept of work-life balance, and how employees and companies should go about achieving it. Yahoo Inc.'s recent announcement that it intended to end all work-from-home arrangements drew widespread scorn, with some critics labeling the move regressive and anti-woman. At the same time, new studies are emerging that claim employees who take advantage of flexible work arrangements, including telecommuting, experience a "flexibility stigma" which results in lower wages, fewer promotions and harsher performance evaluations.
Despite these recent developments, telecommuting or, more accurately, cybercommuting is on the rise in corporate America. Employers are increasingly turning to cybercommuting programs as a means of attracting and retaining talent while cutting costs. In creating a cybercommuting program, employers need to be mindful of a whole host of laws that affect the remote worker.
Compliance with wage-and-hour laws is probably the biggest challenge for employers with remote workers. For nonexempt employees, employers must still comply with laws that require them to maintain accurate time records and fully compensate employees for all hours worked. Employers also must still provide those employees with meal and rest periods pursuant to state law.
Because it is difficult to monitor the hours worked by employees who are not physically present, employers may find themselves on the hook for more overtime than expected, or may find they are paying for hours not actually being worked. To avoid these time-tracking problems, some employers require nonexempt employees to log in and log out using timekeeping software when they are working remotely. Unfortunately, such software is only as accurate as the user controlling it. At a minimum, employers should clearly explain their expectations regarding the hours and schedule to be worked by the nonexempt remote worker, and should require employees to certify the accuracy of their weekly time cards. Employers also should apprise supervisors that emails they receive from nonexempt employees outside of their set schedule may indicate that the remote employee is working, and should be compensated for, hours beyond those that are recorded.
While cybercommuting poses fewer wage-and-hour problems for the exempt employee, employers need to be aware that, in some cases, remote work may undermine an employee's exempt status. Each of the "white collar" exemptions in California (aside from the outside sales exemption) requires employees to exercise independent judgment and discretion on a regular basis. At the heart of this requirement is the notion that exempt employees must make creative decisions about important matters. Some studies claim that while remote workers are more productive, they tend to be less innovative. Employers need to be careful that the duties for remote exempt employees do not shift to task-oriented work that requires little creative, decision-making authority. In addition, for exempt executive employees, employers need to be mindful that such employees must still "customarily and regularly" direct the work of two or more full-time employees. It may be more difficult to establish those supervisory duties when employees work remotely.
Expense reimbursement laws present additional problems for both exempt and nonexempt remote workers. Labor Code §2802(a) requires employers to reimburse employees for expenses necessarily incurred in connection with their work. Does that mean an employer must pay for the cybercommuter's home computer and home office utilities? Not necessarily, according to one recent federal district court case. In Novak v. Boeing, 2011 WL 9160940 (C.D. Cal. July 20, 2011), the court found employees participating in an entirely voluntary work-from-home program were not entitled to reimbursement for certain home office expenses because the expenses were not "necessarily incurred" in connection with work. Instead, the court characterized the expenses as "optional expenses accepted by employees" who chose to work from home. The limits of Novak remain to be tested.
Compensation and expense reimbursement associated with travel time also pose problems for both the exempt and nonexempt cybercommuter. Generally, travel to and from the employee's primary work site (i.e., "ordinary commute time") is not compensable, and the mileage associated with it need not be reimbursed. When an employee works entirely from home but is required to attend occasional meetings at the office, the question arises as to whether travel to the office becomes compensable because the employee's "ordinary commute time" is now the minute it takes to walk from the bedroom to the study. There is no definitive answer to this question in California. However, if occasional office meetings are part of a remote worker's job, it makes sense that occasional travel to and from the office should be considered part of the employee's noncompensable "ordinary commute" if the employee is advised of this occasional commuting requirement ahead of time.
Discrimination statutes also affect the remote worker. Employers should assume that the ability to work remotely is an employment benefit that cannot be awarded or denied in a discriminatory fashion. To avoid claims that protected classes of employees are being treated unfavorably, employers should ensure that the criteria used to select employees for a cybercommuting program are business related. Employers also should regularly review selection decisions for consistency with the policy and fairness.
One thorny question that frequently arises under the Fair Employment and Housing Act and Americans with Disabilities Act is whether an employer must allow disabled employees to cybercommute as a reasonable accommodation. Equal Employment Opportunity Commission regulations specifically identify working from home as an example of a potential reasonable accommodation. In California, whether cybercommuting should be offered as a reasonable accommodation will depend on the facts. Central to the inquiry is whether on-site/in-office attendance is an "essential function" of the job. As noted by the court in Samper v. Providence St. Vincent Med. Ctr., 675 F.3d 1233 (9th Cir. 2011), if a job requires on-site teamwork, face-to-face interaction or working with equipment that can only be found in the office, working from home generally is not a reasonable accommodation.
Employers need to be careful in assessing whether a particular job actually "requires" on-site attendance, recognizing that their subjective decision may be second-guessed by a jury if litigation ensues. Also, blind adherence to a companywide prohibition against cybercommuting (like Yahoo's) may be of questionable value in the face of a request for reasonable accommodation.