Technological advances, such as computers, wireless telephones, modems and fax machines, have precipitated changes in the waysand placesin which people work. A growing segment of the workforce now works either all or part of the time from home or somewhere other than the traditional office. This phenomenon is commonly referred to as telecommuting. While many types of work could conceivably be done from home, and there are alternative locations other than homes, such as satellite offices, the focus of this paper will be on considerations involved in conducting office, telephone and computer-related work in employees homes.
Proponents of telecommuting cite numerous benefits, such as reduced overhead and lower facilities expenses, reduced traffic and consequential environmental benefits, and employee satisfaction. In light of the complex web of laws and regulations governing the relationship between employers and employees, however, the concept of telecommuting raises various legal issues. The following paper discusses some of these issues and offers possible solutions to guide employers through these uncharted seas.
Tort Liability
One of the major legal concerns regarding telecommuting is exposure to liability to third persons and employees for personal injury and property damage whether caused by the telecommuting employees actions, by the actions of another employee or person with whom the telecommuting employee needs to interact as part of the job, by equipment in the home, or by other circumstances attributable to telecommuting. For example, an employer could face exposure to liability if a friend visiting the telecommuting employee were to injure himself on the employers equipment. Likewise, the telecommuting employee could seek to hold the employer responsible if she were assaulted by a technician who came to the home to install or repair equipment.
Assuming the employer is a subscriber to workers compensation insurance, exposure to liability for work-related personal injuries suffered by telecommuting employees is limited and controlled by the Texas Workers Compensation Act and its bar on common-law claims. However, potentially unlimited compensatory and punitive damages could be awarded for property damage and for personal injuries not covered by workers compensation insurance.
Liability could result under principles of respondeat superior (whereby an employer can be responsible for the acts of its employee in the course and scope of employment) as well as premises liability (whereby one who controls or occupies land can be responsible for injuries occurring thereon). There is inherent tension between taking steps as an employer to reduce and control risks and common law principles governing premises liability. Actions an employer may take to comply with its duties under the Occupational Safety and Health Act (OSHA) and the common law to provide a safe workplace could be used as evidence to demonstrate the employers control over the premises for purposes of imposing premises liability.
To reduce risks, employers should consider limiting the exercise of control over the homes of telecommuters to the greatest extent possible while still complying with OSHA duties, ensuring the use of safe furniture and equipment, obtaining releases from telecommuting employees and all identifiable third parties (such as cohabitors), obtaining indemnity agreements from telecommuters, requiring telecommuters to obtain homeowners or renters insurance policies with business use riders, arranging for coverage of risks under insurance policies procured by the employer, and prohibiting third parties from entering telecommuting employees home work areas. The criminal background of anyone whom the employer sends to the home of a telecommuting employee should be investigated and such investigation must be conducted in conformity with all applicable laws. Employers should consult with counsel to discuss how best to implement these possible measures to control risks.
Occupational Safety and Health Issues
Telecommuting employees home work areas would be considered places of employment for purposes of OSHA; consequently, the employer must comply both with the general duty to provide a safe workplace as well as specific standards. As for the general duty clause of OSHA, the employer should be concerned about ergonomic hazards. A solution to this concern is to ensure that telecommuting employees have safe equipment and use it in an ergonomically correct manner. In the context of office, telephone and computer work, employers should ensure that employees have safe desks, chairs, keyboards and telephone equipment. As a practical matter, it may be necessary for the employer to provide this equipment.
Moreover, the employer should also take steps to ensure compliance with specific OSHA standards which address cleanliness, bathroom facilities, fire protection and other emergencies, toxic substances, electrical hazards, and first aid. To ensure compliance with these standards, while avoiding exerting significant control over premises, the employer should require telecommuting employees to complete a safety inventory. The safety inventory should address the issues listed above, and should include representations by the telecommuting employee of the safety of the proposed home work area. Again, employers would be prudent to consult with counsel regarding how best to comply with their obligations to provide employees with a safe workplace.
Equipment Issues
To conduct their work from home, telecommuting employees engaged in office, telephone or computer-related work will almost certainly need to use equipment provided by the employer. As noted above, the employer should ensure that the equipment is safe and is used in a safe manner. The employer will also need to ensure that its equipment is adequately protected and insured against damage and loss. Employers should determine the extent to which their insurance policies would cover equipment used in telecommuting employees homes. If the employer intends to rely at all on insurance obtained by the telecommuting employee, such as homeowners or renters insurance, it should determine whether such insurance would cover business losses. Other possible solutions include requiring telecommuting employees to give contractual promises to pay the employer the value of lost or damaged equipment (especially if the loss or damage was caused by the employee and could have been easily prevented). If the employer wished to deduct such sums from employees paychecks, it must obtain their written authorization.
Regarding software licensing, the employer must ensure that it complies with its agreements with software vendors. Doing so may require the purchase of additional licenses or negotiating with vendors. Additionally, telecommuting employees should be required to promise to comply with applicable licenses and copyright law.
Land Use Restrictions and Other Real Property Issues
Land use restrictions, including local zoning ordinances and the terms of leases, homeowners association rules, or other restrictive agreements (collectively referred to as restrictive covenants), may conflict with telecommuting. Restrictive covenants and zoning ordinances commonly seek to prohibit the operation of businesses in homes. A desire to avoid noise, traffic and other nuisances is generally the motivation for such restrictions. While telecommuting that involves a single employee working alone at home does not implicate these concerns, there may nevertheless be a technical violation of applicable restrictive covenants. Injunctive relief, as well as damages and attorneys fees, could potentially be awarded for such breaches.
Property law concerns are also implicated by the installation of high-speed ISDN lines. Many computer-related jobs require such lines for efficiency. As established utilities will be providing the service, it is likely that all necessary easements are in place. However, it is advisable to require telecommuting employees to make contractual representations that they have obtained the approval and consent of any affected landowner to the installation of an ISDN line in their homes (including the interior wiring) and require them to agree to indemnify the employer in the event their representation is false.
Wage and Hour Issues
Lack of in-person supervision of non-exempt employees raises concerns under the Fair Labor Standards Act (FLSA). To minimize exposure to wage claims, employers should require telecommuting employees to accurately and completely report all time worked and obtain advance approval for overtime. (Of course, even if the overtime is unapproved, the employer must pay for all time worked. Employees who violate the policy regarding obtaining advance approval for overtime may nevertheless be subject to discipline.)
Employers would be well advised to consult with counsel to ensure that they are complying with FLSA requirements for non-exempt employees regarding travel time, on-call time and breaks. Telecommuting arrangements may involve mid-day travel time between home and the regular office. Depending on circumstances, telecommuting employees may be entitled to on-call pay in the event they are called into their regular offices or are put on stand-by in the event of equipment failures or other circumstances that interfere with their ability to work at home. To avoid FLSA liability for meal breaks, telecommuting employees must be required to take meal breaks of at least 30 minutes in duration. They should also be required to take such breaks outside of their home work areas and be informed that they are totally relieved of duty during their meal breaks.
Accommodations
Providing telecommuting opportunities will establish a track record that will have implications under both the Americans with Disabilities Act and the Family and Medical Leave Act. The determination of whether offering telecommuting would be required under those laws must generally be made on a case-by-case basis. Nevertheless, employers must understand that the option of telecommuting may need to be offered to a wider class of employees than those originally envisioned by an employer contemplating a telecommuting program. It is also possible that allowing telecommuting could obligate the employer to make modifications to employees homes as reasonable accommodations.
Drug and Alcohol-Free Workplace Issues
Employers who subscribe to workers compensation in Texas and employ 15 or more employees must take steps to be a drug and alcohol-free workplace. Employers with government contracts have similar responsibilities pursuant to the Drug-Free Workplace Act. Drug and alcohol policies should be revised to make clear that they prohibit being under the influence of drugs or alcohol while working, regardless of where employees are working. Telecommuting employees should be reminded that use of drugs or alcohol at home while working is strictly prohibited, and such substances should never be allowed to come into the designated work area.
Discrimination
As with all terms and conditions of employment, employers must take care to prevent unlawful discrimination. Consideration must be given to avoiding the possibility of discrimination in the selection of telecommuting employees. The use of certain eligibility criteria, such as the ability to pay for equipment, utilities, and insurance, could result in a disparate impact.
Moreover, criteria used to ensure safety and the suitability of employees who will make home visits to telecommuting employees, such as the absence of a criminal record and bondability, could result in a disparate impact. The employers defense against any challenge to these criteria would be that the criteria are job related and consistent with business necessity.
Management of Telecommuting Employees
The concept of telecommutingplacing a worker at a remote locationposes challenges for managers. Managers must use alternatives to face-to-face communication to monitor the quality and quantity of work produced by telecommuting employees. Managers should also take steps to monitor telecommuters satisfaction with the arrangement.
To address some management concerns, several agreements should be obtained from telecommuters. Although telecommuting may offer greater flexibility for employees with dependent care obligations, it is advisable to make clear from the outset that telecommuting is not a substitute for child or elder care. Telecommuting employees should be required to agree in advance to do the following: (a) immediately report any work-related problems, including, but not limited to, equipment or power failures or other circumstances that interfere with the performance of duties; (b) maintain complete and accurate records of all time worked and not to work more than 40 hours during any workweek unless pre-approved; (c) agree and consent to visits even if they are unannounced; and (d) agree and consent to unannounced monitoring and recording of voice and electronic data transmissions over the ISDN line provided by the employer. Prior to visiting employees homes or monitoring voice and data transmissions, employers should consult with counsel.
This paper is for general information only and is not intended to be a legal opinion or legal advice. For advice about specific legal matters, you should consult an attorney.
Ann Abrams Price is employed by Vinson & Elkins L.L.P. in Austin, Texas. Her e-mail address is aprice@velaw.com. Ms. Price wishes to acknowledge and thank her colleague, Jason S. Boulette, for his contributions to this paper.