The website defines “telecommuting” (also know as e-commuting, e-work, telework, or working from home) as “a work arrangement in which employees enjoy limited flexibility in working location and hours. In other words, the daily commute to a central place of work is replaced by telecommunication links.”

Many employers and employees like the arrangement because, in many instances, it:

  • Improves recruitment and retention of valued employees, 
  • Assists employees with balancing work and family responsibilities, 
  • Increases employee productivity, and 
  • Serves public policy interests like: 
    • Protecting the environment, and 
    • Encouraging energy conservation by reducing traffic congestion and vehicle emissions.

Given these positives, it is not surprising that approximately 45 million Americans worked remotely at least one day during 2006 and 12.4 million worked from home at least one day per month, according to World atWork 2006 Telework Trendlines commissioned from The Dieringer Research Group.

However, employers would be well advised to think through all of the legal issues involved with telecommuting prior to instituting such a policy. There are serious legal pitfalls for employers who allow telecommuting, particularly in the areas of worker’s compensation, wage and hour law, and protection of confidential information or trade secrets.

Worker’s Compensation Issues

Under Ohio Worker’s Compensation Law, an employee who is injured “in the course and scope of his/her employment” is eligible for worker’s compensation benefits. For most employees working out of their homes, the distinction between work and non-work becomes blurred. Thus, an employer’s ability to dispute whether an employee was, in fact, within the course and scope of his/her employment at the time of an accident at home becomes much more difficult (e.g., was the employee really “working” when they slipped and fell in their bathtub).

Wage & Hour Issues

Telecommuting can also create serious wage and hour issues under the Fair Labor Standards Act (FLSA). It is often hard enough for supervisors to track the hours of non-exempt workers who work right under their noses, much less those working from home. However, employers are required to maintain records tracking hours worked and those records are essential to proving that the employer properly paid (including overtime) its employees and gave them any requisite breaks. Without accurate records, employers are vulnerable to claims of failure to pay for hours worked or overtime, which can result in backpay, liquidated damages (2x back pay), and attorneys fees and costs.

To deal with these wage and hour issues, employers must track a telecommuter’s work hours. One option is to require the employee to “clock in/out” via their computer each period of work and to submit a signed and dated weekly timesheet of hours worked. Employers may also want to consider limiting the telecommuting option only to those individuals who fit securely within FLSA white-collar or computer exemptions.

Confidential Information Issues

Telecommuting may also make it more difficult to maintain the employer’s confidential information or trade secrets given that most employees do not maintain the type of sophisticated security precautions at their home as the employer does at the office. Thus, certain security measures should be instituted, such as requiring encryption of material, use of a company computer only, locked offices, use of security systems, frequently changed passwords or pass codes, and an agreement in advance of the arrangement that the telecommuter will return all company property and company information upon request of the company. Other concerns include using company equipment for personal use or use which violates company policy (e.g., downloading pornography from the internet on a company computer).

ADA Issues

As tempting as it may be to have a blanket prohibition regarding telecommuting, if an individual is an otherwise qualified person with a disability under the Americans With Disabilities Act, according at least to the EEOC, telecommuting may be deemed a reasonable accommodation under certain circumstances. As with many employment problems, a thoughtful and well-drafted policy should permit employers to extend the benefits associated with offering telecommuting to some of its employees while avoiding the legal pitfalls discussed above. Employers should also require employees to execute a Telecommuting Agreement which sets forth the specific details of the particular employee’s telecommuting arrangement.