What’s the latest in telecommuting? If you have many employees who rely on their ability to work from home, you probably were interested to hear of a change in trend in telecommuting. Yahoo! CEO Marissa Mayer caused an uproar when it was leaked to the public that the company’s “work-from-home” policy was being revoked. People seemed shocked that such a strong advocate for the balance of work and family would want to eliminate what had provided a solution for many employees seeking a non-traditional work arrangement.

In support of its decision, Yahoo! explained that working “side-by-side” would foster better communication and collaboration in the workplace, and that “speed and quality are often sacrificed” when employees work from home. Others followed suit, reviving the debate as to whether and to what extent large-scale telecommuting should be allowed. Proponents of flex-work arrangements countered by arguing that valuable work-time will be lost to the commute and talent will be more difficult to attract and retain, particularly in the technology sector, where employees have become quite accustomed to working in their pajamas at home.

How does the law weigh in? The marketplace will ultimately decide which approach is most effective business-wise. However, when it comes to California’s disability discrimination laws, one thing is certainregardless of your views on work-at-home arrangements, a “one size fits all” approach will not fly. Both the California Fair Employment and Housing Act (FEHA) and the Americans with Disabilities Act (ADA) require employers to make reasonable accommodation for known disabilities of employees to enable them to perform a position’s essential functions, unless doing so would result in undue hardship to the employer’s operations. Cal. Gov. Code § 12940(m); 42 U.S.C. § 12112(b). Under these laws, picking an appropriate accommodation requires a highly individualized, case-by-case inquiry, which depends on the employee’s disability and the essential functions of the job. McGregor v. National R.R. Passenger Corp., 187 F.3d 1113, 1116 (9th Cir.1999); Ross v. RagingWire Telecommunications, Inc., 42 Cal.4th 920, 938 (2008).

There is no question under California state and federal case law that telecommuting and other forms of flex-work arrangements can amount to a “reasonable accommodation.” For example, in Humphrey v. Memorial Hospitals Association, 239 F.3d 1128 (9th Cir. 2001), the Ninth Circuit held that a “work-at-home” arrangement was a potential “reasonable accommodation” for a medical transcriptionist who suffered from obsessive compulsive disorder (OCD), finding at-home work an appropriate accommodation because physical attendance at the office was not an essential job duty. See also Norris v. Allied Sysco Food Services, Inc., 948 F. Supp. 1418, 1431 (S.D. Cal. 1996) (where disabled employee’s duties (administrative and clerical) could be performed on the computer and over the telephone, she could be reasonably accommodated by permitting her to work from home, part-time if necessary.)

The United States Equal Opportunity Commission’s Enforcement Guidance also makes it clear that policies regarding where work is performed must be modified if needed as a reasonable accommodation (subject, again, to the undue hardship defense).

This suggests, at a minimum, that employers must be ready to show that presence in the workplace is an essential function of the job if not prepared to permit working from home as a reasonable accommodation. (See, EEOC Enforcement Guidance: Reasonable Accommodation and Undue Hardship Under the Americans with Disabilities Act, 915.002 (October 17, 2002).)

So What’s An Employer To Do? Don’t be so quick to have your employees hand in their bathrobes quite yet. Employers should be careful about implementing broad-brush policies prohibiting at-home work arrangements unless they are prepared to make exceptions when necessary or presence at the office is truly an essential function of the job. This is especially true if the policy represents a dramatic change to a previous policy.

If the employer is on notice that a request for a flex-work arrangement is disability-related, each request must be considered on a case-by-case basis. In such instances, employers must scrutinize any specific limitations caused by the disability, and compare them to the essential functions of the job to determine whether a work-at-home arrangement may amount to a “reasonable accommodation” under the law.