Remote Workforce – Best Practices to Address Employment Challenges and Legal Concerns

This article was originally published by CRF as: Unique Employment Law Challenges For the Expanding Remote Workforce; by: Steven Nevolis.

When employers talk about the remote workforce in today’s market, they mean more than just employees telecommuting from their home offices. They’re also referring to the many options employees and workers can utilize to complete their jobs with minimum or no time having to be spent in a traditional office. This includes workers in the oft-cited “gig economy” providing services to companies such as Uber and Doordash, among others, to other employees where their job requires them to be constantly on the road at site visits or clients meetings, rarely stepping foot inside their own office.

Of these various type of remote workers, those telecommuting or providing work from a home office are becoming increasingly common in today’s workforce. In fact, according to the U.S. Department of Labor, close to 23% of full-time employees performed on average close to 3 hours of work from home in 2018.[1] This percentage has remained steady in recent years, meaning nearly a quarter of employees in the workforce are performing some of their duties at their home, away from the office, and outside the safeguards that a traditional office provides.

This is not to say employers don’t benefit from the advantages of remote workers. In fact, the opposite is true: a remote workforce provides flexibility and a lower cost structure to an employer.  Less reliance on traditional offices allows employers to reduce square footage and reduce overhead. Without the constraint of geographical requirements, employers can search for talent wherever it may be, opening up a new pool of employees they may never have considered. Flexibility for employees can boost morale and provide employees with a sense of autonomy in their job and may reduce turnover.

However, the flip side of the remote workforce coin is the challenges in workforce management when employees are decentralized and spread across so many different locations. Employers won’t be forgiven for focusing on the most pressing of these issues, such as proper classification of an employee under the overtime laws, ensuring that employees are properly recording their time for pay purposes, and how to best guarantee that employees are meeting their job obligations and performing in a satisfactory manner while being away from the watchful eye of their supervisor.

But some other, less obvious issues that employers need to consider have the same level of ramifications. This includes health and workforce safety issues for those working outside their office, how to best secure and safeguard confidential information for employees who are constantly on the go, and what laws apply to these remote employees. While the law is largely unsettled in these areas, we attempt to provide some guidance on how to navigate these new challenges.

HEALTH AND WORKPLACE SAFETY REQUIREMENTS

Employers are well-versed with the requirements in providing employees with a safe workplace. This includes complying with the standards of the Occupational Safety and Health Act, enacting policies to educate employees on how to make the workplace safe for themselves and others, and providing workers’ compensation insurance for employees who get hurt on the job. But how do these standards work for employees who aren’t in the office, who maintain a home office, or who may not have ready access to their supervisors to report these conditions?

OSHA Requirements for the Remote Workforce 

An employer’s primary responsibilities under the Occupational Safety and Health Act are essentially two-fold: (1) provide a safe place of employment up to federal regulations and standards; and (2) track and report all work-related injuries and illnesses. But how does an employer accomplish these goals for employees who are sitting in a home office 500 miles away from headquarters?

Fortunately, the Occupational Safety and Health Administration (“OSHA”) has provided guidance regarding its stance on home-based worksites.[2] While this guidance is nearly 20 years old, and may not account for some of the nuances the remote workforce presents now, it is helpful to see how OSHA views these issues.

OSHA breaks down their guidance into two separate sections: (1) home-based worksites, which are areas of an employee’s personal residence where the employee performs work; and (2) home offices, which are office work activities in a home-based worksite. Regarding home offices, OSHA will not conduct inspections, nor will they hold employers liable for an employee’s own home office. However, if an employee’s home-based work extends beyond just office work (for example, manufacturing work), then employers are still responsible for “hazards caused by materials, equipment, or work processed which the employer provides or requires to be used” in the home.

However, if an employer is required to keep records of work-related injuries and illnesses under the law, they will still have to do so for employees in home offices and home-based worksites. Illness or injuries are considered work-related if they occur while the employee is performing work, or if they are performing an act that is directly related to work rather than the general home environment setting.[3] So even if an employee is not on the premises – employers still need to account for them in their OSHA reporting requirements.

Workers’ Compensation Requirements

While workers’ compensation requirements vary from state to state, generally employers have to provide workers’ compensation insurance to all employees to cover injuries that occur during the course of an employees’ performance of their job. Similar to the OSHA reporting standards, a covered injury is one that occurs due to the employee’s performance of tasks related to their job. This means that an injury outside of the scope of the job (for example, an employee trips and falls watering their plants while on a break in the middle of the day) may not be covered. However, with such little case law considering this issue, it is difficult to determine how workers’ compensation courts will decide on these issues from state to state.

How Can an Employer Navigate These Issues?

First, the employer needs to establish written policies addressing workplace safety that they must administer to all remote workers. These policies will explain the employer’s expectations for workplace safety at home-based worksites, reporting procedures for workplace illnesses and injuries, and may even provide employees with resources to ensure they are operating their worksites safely. Employers can also provide training (either remote or in-person) on these workplace standards and require all remote employees to complete the training.

Second, employers need to establish an easy to use reporting system for remote employees to report workplace illnesses and injuries. This can be something as simple as emailing or calling a supervisor, to something more formal such as an online form or remote reporting website. It’s important to note this reporting procedure is meant for both OSHA purposes and workers’ compensation purposes.

CONFIDENTIALITY AND DATA PRIVACY CONCERNS

Data confidentiality should be at the forefront of any employer’s remote workforce agenda. Whether we are discussing confidentiality of customer or business partner information that must be protected due to contractual obligations, information such as personal health information that must be protected by law, or employer trade secrets or other sensitive information that an employer wants to keep out of the hands of its competitor, remote workers represent a unique challenge in safeguarding this information. That is because every time an employee leaves the office with the information, the possibility of it being improperly distributed significantly increases.

To mitigate these risks, employers can implement a number of safeguards, a combination of which will be useful in enforcing these confidentiality concerns.

First and foremost, employers need to have on file policies and procedures regarding the type of confidential information employees will have access to, and how employees are expected to keep that confidential information private. This policy should be distributed to all employees at the beginning of their employment, and on an annual basis as a reminder of their obligations. Employers may also consider training for employees on these confidentiality issues, especially when employees have to handle confidential information protected by law (such as information protected by the Health Insurance Portability and Accountability Act).

Second, employers should work to limit access of confidential information within the company to only those employees who actually need access to the information. For example, those outside the research and development department don’t generally need to be aware of the employer’s trade secrets. Those outside the sales department don’t need to be aware of the employer’s sales and pricing strategies. While this approach should not be taken to such an extreme as to inhibit the flow of information to help the employer conduct its business, limiting the pool of employees who have access to the confidential information will reduce the possibility of improper disclosure.

Third, employers should put into place procedures for all remote employees to access and maintain confidential information. For example, remote workers should only access the employer’s network by use of an approved, encrypted virtual private network (“VPN”). Employees should be prohibited from saving or storing confidential information on their personal computers or other devices outside of the VPN. Aside from electronic information, if a remote employee must take confidential information home in the form of hard copy documents, they must be secured at all times when out of the office. This may include the use of locked filing cabinets or other measures, and a strict prohibition against employees leaving files in their vehicles or some other unsecured location. The employer should also institute a tracking system when employees remove hard copy documents, such as tracking when the information was taken, what type of information was taken, and when it was returned. Violation of these rules should result in discipline for the offending employee.

Finally, all employees who handle confidential information should sign confidentiality agreements at the outset of their employment. These agreements should clearly define the confidential information the employee will be handling and strictly prohibit the unauthorized disclosure of such information to third parties. It should also provide for a legal mechanism to enforce the agreement in the event an employee does disclose the information, such as the ability of the employer to seek an injunction.

It is paramount for an employer to implement these safeguards and procedures to protect confidential information as these safeguards will be Exhibit A in any litigation regarding confidential information. In the event of an unauthorized disclosure, courts will undoubtedly look at these procedures to see how seriously an employer took their obligation to secure confidential information. In the instance of disclosure of legally protected information, such as personal health information, implementing safeguards will be the difference between a large administrative fine and a potentially reduced penalty. On the other hand, in an action to enforce a confidentiality agreement to stop the disclosure of trade secrets, or even a non-competition provision, strong safeguards can be the difference between a court issuing an injunction or declining to do so.

APPLYING EMPLOYMENT LAWS TO REMOTE WORKERS

The myriad federal, state, and local employment laws are enough to give a headache to even the most seasoned human resources professionals. Now, add into the mix remote employees occupying worksites well beyond the borders of any company office, and it only becomes more complicated. Human resources offices must keep a close eye on the states and municipalities where all of its remote workers are located and adjust accordingly, and must also assess how these remote workers are treated under applicable federal laws as well.

The best example of a federal law affecting a remote worker differently than employees in a central location is the Family and Medical Leave Act (“FMLA”). The FMLA covers employees who work in a location that has 50 employees within a 75 mile radius. So if you are an employer with your main headquarters in Florida and 100 employees in the main office, all of those employees will be covered by FMLA. However, what about your one west coast sales representative who lives and works out of their home in San Francisco? Will that employee be eligible for FMLA leave? No – they will not, since they are only one employee in a remote location. It is important for the employer to draw this distinction and explain to that sales representative that they aren’t covered, or risk providing to the employee a benefit they aren’t necessarily entitled to which could cause a problem down the road.

On the other hand, human resources professionals also need to be vigilante to provide remote employees with benefits under state and local law that may not be provided to a majority of the employer’s workforce. To keep with our example of the Florida employer and a sales representative working in San Francisco, those 100 Florida-based employees aren’t entitled to any paid sick leave. However, the employee working in San Francisco is entitled to sick leave under San Francisco’s Paid Sick Leave Ordinance. The employer will then need to track sick leave for this individual employee even if they do not provide sick leave for any other employees.

The same question arises not just for laws providing entitlements to employees, but also those laws protecting employees. Moving back again to our Florida employer, in addition to its San Francisco sales representative, they also want to hire a remote sales representative in New York City. However, seeing as they have never hired an employee in New York City, they want to ask prospective applicants their current salary to get an idea of the market. Unfortunately for this employer, they won’t be able to do that. Even though the employer sits in Florida, where there is no salary history ban on the books, by hiring someone in New York City the employer now needs to abide by New York City employment laws. This includes the recently enacted salary history ban. The Florida-based employer will run afoul of a law in place nearly a thousand miles away by asking this question, which means it will have to train the Florida-based employees interviewing applicants to comply with this New York City law.

CONCLUSION

There is no doubt that the remote workforce is here to stay. Employers and employees should be eager to reap the benefits of this arrangement. But as with everything in the employment world, employers need to be careful not to let their guard down when it comes to their remote workforce. Employers need to take a big picture approach to determine the objectives they want to achieve by using a remote workforce, the legal obligations the employer must adhere to with respect to these employees, and best practices for ensuring the remote workforce relationship runs smoothly. In doing so, employers can turn their remote workforces into an invaluable business asset.

[1] https://www.bls.gov/news.release/atus.t06.htm

[2] https://www.osha.gov/enforcement/directives/cpl-02-00-125

[3] 29 C.F.R § 1904.5(b)(7)

Additional Resources on this Topic:

Legal Essentials in Business Credit (CRF On-Demand Course)

COVID-19 Survey #5 Results (CRF Publication)