The COVID-19 pandemic may have permanently changed the future of work. From banking to insurance and the legal industry, employers have embraced remote work for employees. Before March 2020, many companies allowed only a select few people to work remotely—typically exempt employees who travel. Now, they’re permitting more employees to work from home. Some businesses like Nationwide Insurance are reducing their office footprint as they let more people stay home. Before you allow more employees to telework, however, here are some important employment law aspects to consider.

Establish Policies Based on Clear Criteria

First, you must have a plan and specific policy in place addressing the remote workforce. The plan should identify which workers may work remotely and establish guidance for the work. In establishing who may work remotely, be mindful of discrimination laws to ensure there’s no selection that could be viewed as biased.

Your remote workforce policy should address security, expectations, and workload issues. Study each job that will be allowed to happen remotely to be sure the standards and expectations are reasonable. You should base eligibility for the remote work on clear criteria and reserve the right to terminate the policy at your discretion.

In implementing a remote work policy, you should:

  • Clearly define the remote working plan’s effective dates;
  • Establish the expected hours of work;
  • Establish expectations for work performance;
  • Continue the application and enforcement of all employment practices;
  • Proceed with employment reviews with an emphasis on employees achieving expectations;
  • Have a policy or agreement that allows for a home office inspection;
  • Determine a policy for use-of-equipment, reimbursement, and insurance requirements;
  • Protect the company’s right to recall employees to an on-site location (to the extent allowable under local law); and
  • Ensure the rules and expectations apply to all employees working remotely.

Employers also should consider other, more complex issues. For instance, you may need to strengthen the payroll function so more complicated employer tax withholding requirements are appropriately satisfied. That is a common challenge for employers that have historically needed to address federal, state, and local income withholding in only a few jurisdictions.

Across the country, state withholding requirements are quite varied, so moving to a remote work set-up with employees working from multiple states introduces complications. Scenarios with multiple state requirements typically need some analysis before implementing the withholding. You should contact counsel if those types of issues arise.

Establish Where Employees May Work

As a part of remote work, you may want to limit employees to working from their primary residence, i.e., in their own home that’s in the same city or state as your company’s office. Employees, on the other hand, may want to work from a vacation home or a location farther from their “home” office.

Employee expansion into a new location may trigger legal issues because some jurisdictions may see people working there as establishing a legal presence for the employer. Before allowing remote work in new jurisdictions, you should consider the following potential legal issues:

  • Local, state, and/or municipal leave laws covering wage and hour, vacation, and sick pay among others;
  • Local, state, and/or municipal health and safety regulations;
  • Registration as a local employer for payroll tax withholding;
  • Unemployment insurance contributions; and
  • Notification to workers’ compensation and health and welfare insurance providers.

The problems with remote work become more complicated if employees are doing their jobs in locations outside of the United States, where obligations to set up collective representation, requirements for hiring employees in protected categories, and termination protections may apply.

Also, employees working from home in a particular state or jurisdiction may constitute a presence of the employing entity in that location for corporate tax purposes. You should communicate to employees that they may be responsible for changes in their individual tax consequences because of relocations made in connection with a remote work program.

In addition, consider the impact remote work may have on other employment laws (including antidiscrimination and antiharassment), information technology resources and communications systems, data privacy and other confidential and proprietary information, and workplace safety.

All of the issues should be investigated with counsel before a remote work policy is published. That way, you can ensure the company (1) will be able to meet additional legal requirements if allowing remote work from a wider geographic area or (2) should set the policy to exclude remote work from certain areas or from all areas outside the current operating locations.

Communicate with Your Employees

Finally, communicate openly with employees about the application process and eligibility for remote work along with your associated expectations. As with other employee “benefits,” you must keep in mind that once a remote work policy is implemented, it will be difficult to retract. Absent firm guidelines for applying the policy, it will be difficult or impossible to reject remote work requests falling outside of its purview, so careful thought must go into formulating it.

Big Picture

In summary, to transition to remote work more seamlessly:

  • Determine which positions can be performed productively in a remote setting;
  • Develop standard and supported requirements for each job, considering factors such as skills, required interaction, employee seniority, security, and public interaction in settling on positions eligible for remote work;
  • Consider how you will provide remote workers with the equipment necessary to perform their jobs and whether you’ll cover certain costs (e.g., computers, Internet, and security software);
  • Define eligible locations where employees may work remotely;
  • Ensure compliance with applicable local laws, including tracking hours and overtime for remote workers;
  • Consider salary/cost-of-living adjustments based on the employees’ new locations;
  • Establish clear expectations and compensation policies for remote workers; and
  • Communicate openly with your employees.

While establishing a remote work policy may seem burdensome and unnecessary, the uncertainty of the coronavirus pandemic may mandate the considerations moving forward, and some companies may decide the benefits of reduced office space leasing outweigh the upfront costs. With careful planning, the establishment of clear policies, and open communication, you can prepare more easily for a remote workforce if and when the circumstances justify.

Gene R. La Suer and Maggie A. Hanson are attorneys with Davis Brown Law Firm in Des Moines, Iowa. La Suer helps companies in the healthcare and manufacturing industries with wage-hour issues, collective bargaining negotiations, and unfair labor practice proceedings, and he is one of the few Iowa lawyers adept at handling complicated union work and National Labor Relations Board issues. Hanson is a rising leader and shareholder, with a focus on employment litigation, employment practices liability insurance defense, and providing day-to-day and strategic advice to employers. You can reach them at [email protected] and [email protected].

This communication is for informational purposes only; it is not legal, tax or accounting advice; and should not be acted upon as such.  This post may contain hyperlinks to forms, materials, and websites operated by parties other than UniqueHR.  Such hyperlinks are provided for reference only. UniqueHR does not control such websites and is not responsible for their content.