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In many instances, the traditional workplace is being redefined as employers and employees opt for flexible work arrangements, including telecommuting. Telecommuting involves employees performing their duties from home or other remote locations by using technology such as computers, telephones and faxes. The spectrum of telecommuting ranges from “full-time” telecommuters who spend all or most of their time working from a remote location to “casual” telecommuters who work additional hours at home or who only work at home occasionally to attend to personal matters. An estimated 20 to 25 million Americans will be telecommuting in some form or another by the end of next year. Although telecommuting has its advantages, including improved morale, decreased overhead costs, decreased turnover costs, reduced absenteeism, retention of valuable employees and reduced traffic congestion, employers should be aware of potential employment law issues that arise as they manage telecommuting employees. One of these issues recently moved into the spotlight when the Department of Labor (DOL) issued a letter stating that the Occupational Safety and Health Act (OSHA) holds employers liable for the safety and health of workers who work at home. Following an outpouring of criticism from business groups, the DOL then withdrew its letter and issued a modified directive, explained further below. Telecommuting raises unique employment issues related not only to workplace safety but to workers’ compensation, the Americans with Disabilities Act, wage and hour laws and privacy laws. Employers that decide to permit telecommuting should consider establishing clearly defined telecommuting policies with these legal issues in mind. OSHA AND WORKPLACE SAFETY After withdrawing an earlier directive that home offices may not be exempted from job safety inspections, OSHA issued its most recent directive on coverage of home-based offices, which provides that OSHA does not expect employers to inspect the home offices of their employees. If OSHA receives a complaint about a home office, the agency may informally notify the employer of the complaint, but will in most circumstances not inspect the home office. OSHA has reserved its right, however, to inspect home workplaces after the agency receives a complaint or referral that an alleged safety or health violation threatens physical harm or poses an imminent danger. Thus, OSHA may still hold employers responsible for home office injuries involving hazardous work or materials, a distinction that may be hard to define in some cases given the presence of hazardous materials in such items as printer cartridges. The bottom line is that, although OSHA seemingly does not require the inspection of home-based offices in most cases, employers are well advised to ensure that their home-based employees are complying with workplace safety policies, particularly where hazardous substances are potentially involved. Employers could provide their telecommuting employees with a list of such policies and then require them to acknowledge receipt of the policies in writing. Unless they are exempted, workplace injuries, including those that occur at a home office, must be recorded. To facilitate OSHA’s record-keeping requirements, employers should provide telecommuters with written notice of the requirements to report an occupational injury or illness immediately. Employers should then investigate to determine if the injury was work related. Such a practice is also advisable to protect the employer against workers’ compensation fraud. WORKERS’ COMPENSATION AND OTHER LIABILITY ISSUES Before approving a telecommuting arrangement, employers should determine whether their workers’ compensation carriers cover work-related injuries at locations other than the main office. Given the inherent difficulty of monitoring when and how injuries happen in the home, employers should establish written guidelines to avoid such injuries. In addition, employers may wish to require that one room of the home be used as the home office. Employers should also establish a procedure for defining when an employee is performing work such as logging into the computer network or calling a supervisor at work. The employer should also examine its other insurance policies to ensure that company-supplied equipment that is being used in the home office is covered in the event of loss, as the employee’s homeowners’ policy may or may not cover the employer’s office equipment. On another note, the employer should also check with software companies before allowing telecommuters to install the company’s software on their home computers to determine whether separate licenses are required. Employers may also want to ensure that telecommuting arrangements do not violate local zoning ordinances, homeowners’ association rules or lease restrictions, as violation of such rules could expose both the company and the telecommuter to liability. ADA As employers rely more on telecommuting, working at home may increasingly become a reasonable accommodation for employees with disabilities under the ADA. Several courts have held that the ADA does not require an employer to allow an employee to telecommute when no comparable employee does so, and when the essential functions of that employee’s position require his or her presence in the office. Such an accommodation is also not required if it causes the employer undue hardship. However, because courts have also determined that such an issue can be evaluated only on a case-by-case basis, employers should carefully consider whether the position at issue truly is incompatible with telecommuting before denying such a request. Further, to avoid any perception that the employer is segregating disabled employees from the workplace, employers should never require disabled individuals to accept a telecommuting arrangement unless the same requirement is placed on other similarly situated, able-bodied employees. WAGE AND HOUR ISSUES The Fair Labor Standards Act (FLSA) and related state laws require the employer to pay nonexempt employees for actual time worked, whether such work is performed at a main office or at home. The risk the employer undertakes in allowing a nonexempt employee to telecommute is that the employee may either understate or overstate the hours worked, leading, respectively, to concerns that the company is being defrauded of compensation or that the company is being exposed to potential overtime liability. To diminish these risks, a telecommuting policy should clearly define time-keeping and work-hour policies for nonexempt employees and should also provide that such employees obtain prior approval before working any overtime hours. In addition, telecommuting policies should reiterate that nonexempt employees comply with meal break, rest period and other FLSA and state law requirements. Overtime and time record-keeping is less of a concern when the telecommuter employee is exempt. Employers should be mindful, however, of maintaining the exempt status of the telecommuter. Employers risk losing exempt status for telecommuter employees if they diminish the exempt duties or strip the employee of his or her discretion and independent judgment. Employers might be tempted, given the lessened personal contact with the telecommuter, to assign telecommuters task-oriented assignments instead of focusing on work product and the achievement of goals. Again, treating exempt employees like nonexempt employees once a telecommuting arrangement begins could result in the employees losing their exempt status, resulting in overtime and other obligations by the employer. PRIVACY & CONFIDENTIALITY ISSUES When an employee works at home, either full-time or even just on an occasional basis on the weekend, various issues arise related to the employee’s privacy rights and the employer’s interest in enforcing its electronic media policies and in maintaining the confidentiality of its proprietary information and trade secrets. Although e-mail systems in the workplace are common, the laws addressing employee privacy rights and employee monitoring rights are ambiguous. These issues are amplified in telecommuting arrangements, as employees who work from their home offices have a greater expectation of privacy than they do in the main office, particularly if they are working on equipment they own. Employers who wish to have a right to access the home office and/or to monitor the employee’s work product electronically should therefore inform telecommuters of such possibilities and obtain their written consent for such access. On a related note, employers should also obtain written acknowledgment from telecommuters that they are subject to the company’s electronic communication, Internet and voice mail policies when they work at home using company-owned equipment or while they are tapped into the employer’s network or communications systems. Likewise, employers should clearly define that telecommuters have the same, if not a heightened, obligation to protect the employer’s proprietary and confidential information. Employers might even consider asking employees who telecommute to implement heightened security measures relating to access to the computer system and to execute confidentiality agreements. Karen M. Clemes is a member of the labor and employment law practice group at San Diego-based Luce, Forward, Hamilton & Scripps LLP.

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