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Working from Home: Where does the Risk Lie?

The Work-From-Home movement that began in the 1990s and has continued to grow slowly across the country as companies became more technologically sophisticated has erupted in popularity since the beginning of the COVID-19 Pandemic in March 2020. Companies that were previously hesitant to embrace the hybrid workforce had to transition quickly to allow for the protection of their employees while allowing productivity to continue. In November 2020, 42% of the country’s labor force is working from home or “telecommuting”. Almost twice as many employees are working from home than are working in a physical office. This is a new reality for businesses that is looking to stay around for the long run. Even when the pandemic eventually ends, one in six workers are projected to continue working from home or using some sort of hybrid work plan, according to a study by Harvard Business School. This new landscape brings with it a number of issues that employers should consider as the employees continue to work from home in the long term.

The first issue to consider is how your employees locations while working from home can effect taxes. If your employees choose to work from home in another state, it may inadvertently trigger state payroll tax registration and filing requirements for business in another state. Ask whether the contacts are sufficient to trigger a determination that your business has sufficient minimum contacts to subject itself to that state’s tax regime. To prevent this, it must be clear that the work from home policies are temporary measures for the health and safety of employees and society at large.

            The second issue for businesses stems from anti-discrimination law. It is advised to add a work from home policy to your employee manual and apply it uniformly to all employers. For companies that are enacting a “work from home” policy for the first time or that are significantly expanding an existing policy, it may be important to clarify that the policy is being enacted solely as a response to COVID-19 (and perhaps future pandemic situations). When rolling out a telecommuting policy, employers must also consider disability accommodation issues. If an employee has a disability-related accommodation at work (e.g. taking additional breaks or using an ergonomic keyboard or chair), employers need to consider providing those same accommodations for an employee’s work at home, subject to the same undue hardship considerations as exist with providing such accommodations when working in the office. With work-from-home (or WFH) videoconferencing, the risk of discrimination has increased because of employers’ views into employees’ home lives, and the possibility of involuntary disclosure.

            The third issue stems from the Fair Labor Standards Act, which provides the requirements for tracking employees time at work. Employers must have accurate means for tracking all time that hourly employees work. This means that employees need to record and be encouraged to report all start and stop times – at the beginning and end of each day, at the beginning and end of all breaks taken in excess of 20 minutes, and for any work performed outside the normal workday (e.g., text messages and e-mails and working on projects after normal working hours).

            Finally, employers need to consider cybersecurity concerns. Employers should work to ensure that no federal privacy laws, such as HIPAA, or individual state laws are triggered by the resources used at home. As Employees are able to use their own devices or personal WIFI at home to complete the work that was previously done from a more secure location, Employers need to make sure the proper permissions are put in place to protect their information. Make sure that your employee handbook is up to date regarding privacy and security expectations. Although they are no longer under one building, they are still governed by your policies. In order to protect the information you work with and to prevent any sort of phishing schemes, make sure to put in place two-step identification for all logins. Additionally, it is essential to have IT support available as questions of security arise. Whether employees have questions about the quality of WIFI they can use or how they should be executing documents, have someone committed to answering questions regarding the work from home mechanics. This article only scratches the surface for all of the possible prevention steps your business can take to successfully put in place protection as employees work from home. For more information and to make necessary employee handbook revisions, contact your attorney.

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