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Teleworking:  Is it a Good Fit for Your Workforce?

Teleworking: Is it a Good Fit for Your Workforce?

SML Perspectives
(July 5, 2011)

As gas prices soar, an increasing number of employees are requesting alternative work arrangements that allow them to work from home, a local coffee shop, or else where. Employers, on the other hand, are constantly struggling to hire and maintain talented employees, increase productivity and job satisfaction, and decrease overhead costs. With ever-increasing internet connectivity and the ability to remotely access computer systems and networks, many employers are turning to “telework” arrangements. While such arrangements vary greatly depending on the particular industry, employer, and employee, a more flexible working arrangement often proves to be mutually beneficial and rewarding to both the employer and employee.

Employers considering creating a teleworking arrangement, however, should carefully evaluate whether an alternative working arrangement is feasible and whether it will be a good fit for a particular position or individual. If so, the challenge then becomes designing a telework program that effectively facilitates the employee’s ability to perform at the highest level, from outside the office, while minimizing the legal risks the employer may face.

Telework Generally

Some of the benefits of a telework program for the employer include reducing turnover and the associated costs, while increasing employee productivity, morale, and job satisfaction. For the employee, the benefits of an alternative work arrangement may include increased flexibility and work-life balance and less time and money spent traveling to and from work.

Despite the many potential benefits, there are a number of issues an employer should consider in deciding whether to implement a telework program. For example, an employer will need to decide which employees are eligible for participation in such a program. Will the telework program be limited to employees whose employment with the company exceeds six months or exceeds one year? Will the program be limited to employees who meet certain performance standards or criteria such as consistently high ratings on performance evaluations or those with an absence of active counselings? Another eligibility requirement may be the employer’s more subjective evaluation of the employee’s ability to work independently or with little or no supervision, which may depend both on the position and personality of the individual employee. Not surprisingly, certain positions tend to lend themselves to management by objective standards, rather than management by actual observation, while others do not; and some positions entail duties which are not dependent upon a specific location for proper performance, while others do not. Similarly, some individuals will thrive with such flexibility, and some will completely flounder with a less formal structure.

While offering a telework program to select employees or positions does not legally require the employer to offer the program to all employees or to all positions, an employer must proceed cautiously and recognize the risks involved with telework programs. Below is a summary of some of the risks and concerns that should be considered for any such arrangement.

Effective Counseling and Documentation

Allowing employees to work virtually (i.e., remotely) can have significant advantages, but it also creates the need for more-effective counseling and feedback to the employees about their work as well as more-effective documentation of employees’ work and productivity. Obviously, it may be more difficult to monitor and evaluate an employee’s performance if the employee seldom reports to the “office” for work. Thus, there is a greater need for a written job description that clearly sets forth the employer’s expectations for the employee’s hours, availability, and job duties. Additionally, there will be a greater need for a written performance evaluation and other documentation relating to any performance issues. From the outset, there should be a clear understanding of the employee’s performance requirements and the potential consequences for diminished performance or any other indicator that the arrangement is not working. Similarly, supervisors of employees who participate in a telework program may have to utilize different management styles for such employees in order to accomplish the expected performance objectives.

Wage and Hour Issues (FLSA Liability)

Although a telework arrangement creates more flexibility, it does not in any way relieve employers of their obligations to comply with the Fair Labor Standards Act (FLSA). For this reason, employers may want to limit participation in a telework program to employees who are exempt under the FLSA in order to try to eliminate the risk that an employee will later claim that he or she was not properly paid for all hours worked or not paid overtime for hours worked in excess of 40 hours in a work week. Another reason for such a limitation is that it is generally more difficult to monitor the actual hours remotely worked by non-exempt employees.

If a telework arrangement is considered for non-exempt employees, there are ways an employer can minimize its FLSA exposure. A simple example would be requiring more detailed time sheets. Employers should provide written notice and have participating employees acknowledge their expected hours and that no overtime hours will be allowed without prior written approval from a supervisor. An inexpensive method of tracking a participating employee’s hours is requiring the employee to virtually “clock in” and “clock out” via e-mail, telephone, or other electronic media, although an employer may also consider available software programs which are designed for this function. It may also prove beneficial to require employees who telework to turn in daily reports of their time so supervisors can monitor actual hours and productivity.

Potential Precedent-Setting Effects

One significant consideration for a telework program is the potential that such a program will later be considered a reasonable accommodation for an employee’s workplace disability. If a telework program is offered and available to some, then an employee with a disability may argue that a telework arrangement would be a reasonable accommodation. Although employees are still required to perform their essential job functions, it may be more difficult for the employer to show that a telework arrangement creates an undue hardship on the employer or is otherwise not a good fit for this particular employee or position, if it has allowed other employees who are similarly situated to telework. Other instances where this issue may arise outside of disability accommodation requests include situations in which an employee requests a modified schedule for intermittent FMLA leave or an employee requests a telework arrangement in lieu of taking FMLA leave.

Discrimination or Retaliation

One issue for management to carefully consider in creating and implementing any telework program is the need to try to avoid any appearance that program participation or policies are being administered in a discriminatory or retaliatory manner. For this reason, employers need to be mindful of the practical and legal implications of selecting or excluding certain employees or

positions for program participation. One way to reduce the risks of discrimination or retaliation claims relating to teleworking is for employers to identify specific, objective criteria for selecting employees or positions for program participation and ensure these criteria are based upon legitimate business reasons. Identifying such criteria from the outset will help prevent the appearance of discriminatory or retaliatory application.

Trade Secrets/Confidential Information

Another concern for employers is the protection of the company’s electronically stored information (ESI). Employees participating in a telework program are generally provided access to company ESI —which may include trade secrets or other confidential information—which they access from remote locations and possibly, even from personal computers, where monitoring and control may be limited. Additionally, employers often tend to increase the amount of information electronically available to teleworking employees in an effort to ensure they have the resources needed to be productive from their remote locations. Employers should consider, however, how much ESI to make accessible and what security precautions are necessary. An employer should also consider whether an employee will be permitted to store files containing confidential or proprietary ESI on personal devices and whether files or the ESI therein will be subject to a copy-paste feature that allows employees the capability of bypassing other security features. An employer may even consider imposing more restrictive access to certain ESI via remote access and may require that all remote work be done on a company-owned laptop or through a direct connection to the company’s network.

Trade secrets and other confidential or proprietary ESI need to be considered and safeguarded in the same manner and to the same extent that the company protects such information physically located on its premises. Electronic safeguarding will, of course, look different than physical storage and protection, but the concepts are generally the same. This includes taking steps to protect against hackers or unassuming thieves, who can cause great disruption to an employer’s business by wrongfully taking and disseminating company information.

Employers should also consider any applicable state laws protecting personal identifying information. The majority of states have enacted legislation that requires certain measures be taken to protect individuals’ personal identifying information and notification to individuals and various third parties when a security breach occurs. Exactly what is required by employers, whether the information is maintained solely in the office or accessible from outside the office, may depend upon the particular nature of information maintained and whether it includes information relating to residents of other states.

Finally, an employer should implement a policy that requires employees, upon request, to immediately return all employer-provided equipment and all confidential information, regardless of storage location. Employers may also require employees to certify in writing that they have not stored or downloaded any confidential ESI onto any unauthorized location and take necessary precautions to protect against such.

Workers’ Compensation Liability

One consideration that should not be overlooked is the extent to which an employee participating in a telework program may be covered by Workers’ Compensation laws. If an employee is injured while working from home or elsewhere, it may be compensable, despite the employer’s lack of control over the workspace and other related safety risks. The company may want to discuss this coverage issue with its Workers’ Compensation carrier.

There are many ways in which an employer can attempt to minimize Workers’ Compensation liability in telework situations. One way is to require the employee to set up a designated workspace, where he or she can be both efficient and safe. The employee should be reminded of the need to keep this designated area free of trip or fall hazards and with adequate lighting and ventilation. An employer should also provide information and/or assist participating employees in setting up a workspace in an ergonomically correct fashion.

Another way to decrease injuries and minimize exposure is to require periodic inspection of home-offices or other remote workspaces with the employee’s written authorization. The employer may decide to condition participation in a telework arrangement to employees who consent in writing to allowing the employer to inspect the workspace in the event of any alleged injury and/or on a periodic basis, regardless of any such injuries.

Written Agreement Detailing Arrangement

Employers should consider entering into a written agreement with teleworking employees, which specifically detail the terms and conditions of the arrangement. There are a great number of items the employer may want to include in such an agreement. For instance, if applicable, there should be a reminder that the employment is still considered “at will” and the arrangement is not to be construed as a contract of employment or for any specific term of employment. The employer should specify it has the express right to reverse its decision to permit a telework arrangement or to implement any additional requirements or criteria at any time in the future. In other words, the agreement should make clear that the telework arrangement is a privilege and not a right. The agreement should also include a reminder that normal work rules apply.

To help ensure efficiency and productivity, the agreement should contain a clear outline of the employer’s expectations. For instance, the employee should be reminded to devote working time to work and not be distracted by personal commitments or endeavors. The employer may want to include a written work schedule, the location where the employee will be working, and a number where the employee can be reached at specific times. If the employer requires any appearance in the office, such requirements should be specified. If there are specific job-related objectives or goals for the employee’s performance, those should be stated in writing, especially those which the employer considers a prerequisite for continued participation in such a telework program. The employer should also consider what reporting requirements will be imposed, and the employee should be instructed in writing as to how to track time and otherwise communicate with supervisors and others. If the employer desires to make reasonable visits to inspect the employee’s remote workspace, this should be expressly stated. Likewise, there should be a provision regarding the employee’s responsibility to ensure a safe work environment and to immediately report any work-related injuries.

The employer may also want to address in the agreement any equipment issues that could arise such as whether equipment will be provided by the employer, whether the employee is eligible for any reimbursements for equipment purchases related to a telework program, and whether the employee will be required to return employer-provided (or employer-reimbursed) equipment and other confidential information. The employer should also expressly acknowledge any intention it has to monitor an employee’s electronic communications and other documents prepared or accessed via the company computer or network and confirm with legal counsel that such monitoring methods are in fact legal and do not otherwise create any additional legal risks. The employer should include a written provision detailing any confidentiality requirements pertaining to the employee’s work or specifically the employee’s access to trade secrets or other confidential or proprietary information. Although such agreements may need to be tailored to the particular position or individual, clearly setting forth the employer’s expectations in writing at the outset of a telework arrangement will help prevent or reduce disputes and lawsuits.


Teleworking can provide incredible flexibility and opportunities. There are significant benefits for employees hoping to reach their own unique, optimum work-life balance, reduce family and other conflicts, and reduce work-related travel costs. There are also significant benefits for employers hoping to increase the productivity of their employees, boost morale, and even decrease certain overhead costs. Nevertheless, employers considering creating or implementing a telework program for some or all of their employees should carefully consider the potential risks and the best ways to reduce those risks and create a working arrangement that has the potential for being mutually rewarding for all involved.

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Patti West Ramseur
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