Legal and Employment Issues Related to Telecommuting

• Publication year: 2000
• Pages: 65
• Citation: Vol. 29 No. 2 Pg. 65

29 Colo.Law. 65 Colorado Lawyer 2000.

2000, February, Pg. 65. Legal and Employment Issues Related to Telecommuting

---

65

Vol. 29, No. 2, Pg. 65

The Colorado Lawyer
February 2000
Vol. 29, No. 2 [Page 65]

Specialty Law Columns
Labor and Employment Review
Legal and Employment Issues Related to Telecommuting
by John R. Paddock, Jr

An increasing number of employers are implementing telework Simply stated, telework or telecommuting is an employment arrangement under which an employee works full-time or part-time from a remote worksite, usually the employee's home

This article considers the major legal issues telework raises. Telecommuting varies from the way in which a classic traveling salesperson works because, ideally, an employee who is teleworking is fully integrated into the employer's operations through telephone and computer network links. Teleworkers also use their remote worksites to do the same kind of work employees traditionally complete at a central office, such as handling communications with customers, product development or handling executive, professional, or staff duties that do not require in-person contact and can be done from outside a central location.

There are a variety of reasons for this trend. Telecommuting is seen as an employee benefit and as a tool to foster recruiting and employee retention because it frees employees from commuting back and forth to work and allows them to work in the comfort and informality of their homes. Also, by having a percentage of their workforce telecommute, employers realize savings in rent, parking, and other real estate costs, which frees offices or other workplace space and allows employers to have smaller central facilities. Government favors the reduced use of roads and other transportation infrastructure, and lower air pollution resulting from fewer people on the roads. Hardware and software manufacturers and telephone companies like the fact that telework encourages increased sales of their products and services.

Perhaps most important, studies by a variety of sources also show that employees who telecommute are more productive.1 One study also found that a majority of Colorado employers who have telecommuting employees are doing so ad hoc, rather than having formal policies and agreements with their teleworkers. The ad hoc approach is risky because there are a number of legal issues everyone involved in a telecommuting relationship should consider, discuss, and reach agreements about before problems arise.2

Legal and Personnel
Management Issues
In Telecommuting

Among the legal and personnel management issues telecommuting raises are the following:

1. Selection—which jobs, positions, and departments are suitable for telecommuting; which employees would be productive, responsible teleworkers; and which supervisors would be comfortable managing telecommuters. One trap to avoid is characterizing telecommuters as independent contractors simply because they are not in a central worksite.3

2. Productivity and Assessment—how the employer and the employee set goals, assess productivity, and evaluate the success of the telework arrangement.

3. Communication—making the teleworking arrangement "seamless" to customers and other third parties; and ensuring telecommuting employees stay "in the loop" and maintain valuable interactions with supervisors and coworkers.

4. Work Hours—and, for nonexempt employees, how to verify work time for purposes of overtime.

5. Equipment and Services—what equipment (computer, printer, phone, furniture) and services (phone, data transmission) employees need at remote worksites; and who pays for each item or service.

6. Maintenance, Repairs, and Supplies—who provides and pays for maintenance, repairs, upgrades, and supplies.

7. Safety—the employer's role in ensuring remote worksites are safe work environments and that teleworkers are working safely and using good ergonomics.4

8. Insurance—who provides insurance; whether the employee's or employer's insurance covers remote worksite equipment for damage, accidents, or theft; and whose coverage applies to injuries an employee suffers at the remote worksite or liability to third parties arising from a teleworker's acts.5

9. Use Restrictions—whether the employee may use company equipment only for business purposes, or also for personal purposes; and whether anyone other than an employee (e.g., family members) may use company equipment, Internet servers, or software.

10. Access and Security—the employer's right to monitor communications involving its customers and other employees; how the employer can review and retrieve any data, program, or other information stored on any of its computers or other equipment at the remote worksite; and how to safeguard proprietary information or products an employee accesses from outside the central workplace or develops at a remote worksite.

12. Real and Personal Property Issues—whether any lease, covenant, or ordinance restricts home businesses; how the employer can enter an employee's residence to retrieve its equipment (e.g., after an employee is discharged); and how to preserve the employer's rights to its equipment.

13. Space and Resource Planning—maximizing the employer's cost savings by avoiding duplication of resources; e.g., minimizing empty offices and unused computers at the central worksite.

Employers should discuss these issues with employees who are already telecommuting or when employers are planning a telework trial or program. Employees who cannot participate in a thorough and meaningful review about how they will operate in a remote worksite may be unsuitable to telework. Only the most independent and responsible employees are likely to be successful and productive telecommuters.

Wage Issues for Telecommuters

Federal wage and hour laws and regulations can create compensation and overtime issues for telecommuting employees. In general, under the Fair Labor Standards Act ("FLSA"),6 employers must pay nonexempt employees for all the time they work, and overtime if they work more than forty hours in a work week. Colorado's Wage Order Number 22 states similar requirements for the industries it covers.7 Compensable work time includes time employers actually ask employees to work and any time employers "suffer or permit" employees to work.8 A federal wage and hour regulation expressly applies to time nonexempt employees work away from a central workplace:

The rule is also applicable to work performed away from the premises or the job site, or even at home. If the employer knows or has reason to believe that the work is being performed, he must count the time as hours worked.9

Work time also includes time employees spend on duty waiting to get assignments, whether that waiting time is spent at the employers' premises or at remote worksites. The key is whether an employee can "use the time effectively for his own purposes [or if it] belongs to and is controlled by the employer."10

Thus, time teleworkers spend in their home offices working for their employers is compensable work time. Time they are free to spend in or away from their remote worksites wholly on their own pursuits is not compensable as work time or as "waiting time" because it does not benefit the employer, and the employees are in control of their own activities. Even if teleworkers are required to stay in touch with a central workplace via modems, pagers or cell phones their own free time should not fall within either the "waiting time" or "on-call" time regulations. Under "on-call" time regulations, waiting time must be counted as hours worked if employees who are on call must be available...