The most striking effect of the pandemic on our workforce has been the significantly increased numbers of employees working at home, either entirely or on some part time basis. Remote work or telecommuting, unheard of scant decades ago, has seemingly become the rule more so than the exception.
It is therefore surprising to this practitioner how few Remote Working Agreements or Telecommuting Agreements that I have encountered. While such a document is unlikely to advantage an employee, it can be instrumental in clarifying the terms of employment and insulating the employer from liability.
Here we will address concerns of the “right” to work remotely; job expectations; equipment and supply concerns; work area as it relates both to safety and confidentiality; worker’s compensation and other liability issues; local ordinances; taxation; and confirming other broad corporate policies.
Absent a formal agreement that an employee’s work will take place remotely, there is no contractual right of an employee to work remotely. If remote working is part of a new employment, it would be worthwhile to clearly define where and how the work will occur. Employees may also assert that they have a “right” to work remotely if remote working is an accommodation, perhaps in light of a religious belief which forbids them to be vaccinated in offices where vaccinations are required, or, in the case of a disability, where medical or psychological circumstances suggest a need for such an accommodation. Generally, however, there is no right to remote working and, should an employer decide to discontinue the opportunity, the employee will be left without recourse.
As a preliminary matter, and it may go without saying, the Agreement should be appropriately titled and signed by at least the employee and counter-signed by a manager or human resources professional. Recommended titles for the Agreement would include Remote Working Agreement, Remote Worker Agreement or Telecommuting Agreement. Title is always important for ease in managing the document and because some people don’t read past the title.
On behalf of an employer (and this should be the rule regardless of whether an agreement with an employee relates to compensation, confidentiality or telecommuting), their status as employee at will should be affirmed: the agreement should indicate that nothing herein changes the status of their employment from at will to otherwise. Obviously, if the employee in question has an actual employment contract (which does establish employment other than at will) or if the employee is a member of a union, these features must be considered.
It is important to state that the fact of the remote work arrangement will not change the duties, obligations, responsibilities and conditions of the employment, nor is it likely to alter the salary, benefits, paid time off, and the like. Work hours, overtime compensation, use of sick leave, and approval for use of PTO should be stated as conforming to present policies and procedures, unless specifically agreed otherwise.
One of the obvious consequences of remote working is that the employee can no longer walk to the supply closet to obtain pencils or to the IT department to fix his laptop. Unless the employer intends to deliver supplies to the employee (and some do), arrangements need to be made for reimbursement to employees for business related expenses, including basic supplies, maintenance and repairs of equipment, and potentially charges for phone and internet use. Such reimbursement may be governed and mandated by applicable law.
The employer may also wish to include in the agreement that the employee will not use their personal vehicle for employer business. While employer liability for automobile accidents caused by their employees probably stops and starts at the parking lot to the office facility; when an employee is not coming to that facility and chooses to travel “for business,” a broader spectrum of liability for the employer presents. Of course, some of this begs the questions: why does the work-at-home employee need to leave home for work anyway?
To the extent there is employer owned equipment and materials that are entrusted to the employee, the employee must agree to keep them safe and not permit others (presumably family) to use them. With respect to, for example, a company owned computer, such restrictions will tie into issues of confidentiality discussed later. Provisions should also be made for the return of the company owned equipment and materials at the end of the employment and employer’s access during the employment to the equipment and materials.
It is generally presumed that the remote worker has a designated office area, separate and apart from the activities of the rest of his family. While this ideal may be seriously unrealistic, some measures of precaution do need to be taken to ensure that the work area is safe and secure in order to ensure an accident-free environment and one where confidentiality of business records can be maintained. An employer may reserve for themselves a right to inspect the remote work area. While it is unlikely that an employer will “rent” the space for its employee in its employee’s own home, some employers will reimburse the expense of phone and high-speed internet. Generally, those expenses are left to the employee, and it is highly unlikely that if an employee chooses to use his personal equipment that the employer will cover those costs as well.
The remote work area must also be secure so that the employer’s confidential information remains protected. If Grandma and the kids can wander into the remote working area, switch on the company laptop, and review customer’s sales records, there is a problem with security. If, on the other hand, a lock is installed on the study door, the computer is password protected, and the employee actually uses the lock and the password when out of the remote working environment, worries of confidentiality are considerably less. It is not uncommon, in evaluating whether information is subject to trade secret protection, to evaluate the efforts that were undertaken to maintain secrecy. In the first scenario above, it is easy to imagine statutory trade secret protection slipping away from the employer because of an outright failure to treat the information as confidential.
The work area should be safe to avoid any issues arising out of injury to the employee. As the remote working site has now become the place of an employee's business, he may suffer a “work related injury” or worker’s compensation-able injury in the employee’s own home! While an employer can control physical circumstances easily in its own offices, it has virtually no control (absent that granted to it in a remote working agreement) over the physical circumstances in a remote employee’s environs.
Care must also be taken to ensure that the employer does not create any liability with third parties for itself due to the employee's conduct within the remote working environment. The remote employee should be forbidden from having co-employees, customers or vendors visit the remote location. The employee may have individual concerns about related liability as the employee’s home insurance policy may not cover the problematic business activities. Obviously, issues of professionalism also dictate not inviting business relations into one’s home. And let’s not forget that the setting of a home could create a nightmarish possibility in the context of claims of sexual harassment. The setting and the lack of any likely witnesses to rebut the harassment would create a precarious setting for sexual harassment liability and claims.
In rare instances, working at home may be regulated by local or municipal ordinance. Some municipalities may strictly forbid business activities in a residential setting. In all likelihood, the remote activity would never be identified, much less prosecuted, but it is likely the employer would shift any responsibility on this issue to the employee, by requiring the employee to investigate and confirm that there are no local or municipal ordinances that restrict or forbid the remote work.
Remote workers should be especially careful on the issue of state income tax. Generally, one pays state income tax to the state of residence. A tax rate can swing markedly from state to state and a worker may be able to select a location with lower tax rates. Each state has its own tax code that will affect tax liability for remote workers and remote workers will need to involve their tax professionals and their employers to make sure that appropriate taxes are paid. The possibility even exists that a remote worker could be taxed in two states: both the state of the remote working location and the state of the company office. Generally, credit amounts are offered, but may not be a one-to-one credit. Employees should seek tax advise early and often.
If you are an employee in need of review and consultation for your remote working agreement or if you are an employer in need of tightening up your remote working arrangements, we are happy to assist you in this regard. If ignored and undocumented, the simple circumstance of “working from home” can create a myriad of problems for the employee and/or the employer.