Labor & Employment Newsletter - April 2019

Date: April 1, 2019

Accountability in the Virtual Workplace

By: Steven E. Bers

It is an understandable tendency to want one-size-fits-all policies and employment handbook provisions in the workplace, but the virtual workplace modality creates a need to re-examine that tendency.  After all, the conditions at play in the virtual workplace involve issues of control and accountability not present when all employees are easily observed and reachable by merely walking the halls.
An immediate and obvious challenge in the virtual workplace model is verifying that the employer is getting a full day’s employment service and accurate records of hours worked.  This challenge coincides with the Fair Labor Standards Act’s legal requirement that employers maintain accurate records of the time actually worked – even if the employee is working from home.  Employers, not employees, are the party required to maintain accurate hours worked records, and cannot blame inaccurate record keeping on its employees.  A record keeping system must not understate actual hours worked, for example, a computer pay system that automatically indicates “40 hours” each week regardless of whether the employee works more hours.  Neither should the system, by ease of abuse, facilitate employee overstatement of hours worked. 
A further challenge is the ability to immediately dialogue with the virtual workplace employee – a problem not existent when a single location defines the whereabouts.  Many critics of the virtual workplace model point to the synergy of having employees in a common workplace easily available to collaborate on issues.  Defenders of virtual workplace models often respond that employees can still collaborate electronically or by conference call.  Proponents need to self-inspect whether emails or text messages are really going to satisfy intra-employer collaboration or communication exchanges in a timely manner.  How can the employer be assured that it is not speaking to an unattended screen or a phone left off the hook, intentionally or accidentally? 
So too, the virtual workplace creates significant risk to the maintenance of confidentiality.  Employer trade secret documents, easily maintained in the traditional workplace under a “do not leave the building” rule, are now in a person’s virtual workplace with no control whatsoever as to who may walk by.  In a traditional workplace, access is easily denied to outsiders.  Even more complicated is maintaining electronic security as the router in each virtual employee workplace may be subject to surreptitious electronic access.
Also problematic, the employer’s exposure to occupational safety and workers compensation claims is not extinguished by an employee’s virtual employment.  A slip, trip or fall occurring while walking from the employee’s home office to the employee’s bathroom is no less compensable under state workers compensation coverage than if it occurred in the traditional office setting.  In fact the employer’s risk of claims is increased, as it has no way to assure the safety of the environment as it would in a traditional office setting, nor will it have any ability in most cases to find witnesses who might support the claim that injury was not work related.  In some ways, the virtual office is a blank check to a less-than honest employee who suffers any injury while away from a conventional office.
There is no easy answer to the accountability issue, especially if an employee chooses to abuse the workplace modality.  Nevertheless, at a minimum, the employer should consider certain minimal steps:
  • From the beginning, establish that virtual employment is not tantamount to come and go as you please employment.  Get the expectation right from the start;
  • Establish a firm schedule as to when the accountable workplace starts and finishes.  It need not be identical for all employees, but it must be sufficient to define when the employee is fully accountable to the employer;
  • Establish a directive that departure from the schedule requires advance confirmed notice, preferably by confirmed responsive email;
  • Establish the specific lunch or break times during the day, such that non-responsive time is not mischaracterized;
  • Establish that employees during the scheduled time are to be readily available.  Define readily available in terms such as, “all calls to be returned within X minutes,” or “all emails to be responded to within Y minutes”;
  • Establish that any hours worked beyond the regular schedule are not authorized, and must be approved in advance;
  • Direct that the employee take reasonable steps to assure a safe environment;
  • Emphasize more than in the traditional workplace, that any injury must be reported immediately;
  • Provide clear acknowledgement that any equipment, especially computer related equipment provided by the employer is to be used only for business purposes, without the right of the employee to insert personal information or to delete business information.  Obtain a receipt and agreement to return all employer provided equipment, with the option of the employer to set-off against any final pay the cost of failed equipment return;
  • Emphasize the need for confidentiality.  Consider the need for inscription of all communications.  Consider or develop standards for the type of security measures that are required for any remote communications system;
  • Advise supervisors of the need for strictly enforcing the above expectations and avoid a culture in which the rules are not followed; and
  • Be realistic and direct in evaluating whether the quantity of work product received appears consistent with the compensated time allowed.
So in answer to the opening query whether the same policies fit the virtual workplace as they do the traditional workplace, the answer is yes and no – the same employer responsibilities exist, but the steps necessary to assure those responsibilities are satisfied, and a fair days work for a fair days pay is increased.  To that end, we recommend that each employer maintaining a virtual workplace format create a separate, stand-alone statement detailing the expectations described above, and signed by the employee.
The attorneys of Whiteford, Taylor & Preston’s Employment Law Section can assist employers in developing appropriate, fair and legal policy documents and programs to address the accountability, security and oversight needs of the virtual workplace.

Setting Expectations and Minimizing Risk Through Working Agreements

By: Jennifer S. Jackman

Remote working is commonplace in the workplace today, though some organizations treat this as an informal perk.  If your company allows this flexibility, be sure that you have taken appropriate steps to adopt a formal policy that includes the requirement for execution of a telework agreement between the company and the employee in order to minimize the risk that can accompany this arrangement.  When adopting the policy, ensure that it works for your organization.  There is no one-size-fits-all policy and certainly not every position is suitable for remote working, which needs to be clearly articulated in the policy.  Once the policy is adopted, educate the managers and apply it consistently to avoid claims of discrimination.

Remote working comes in many different iterations.  While some remote working relationships are full-time where every day is worked from home, others may be on a part-time fixed schedule, for example, one day per week while others may be ad hoc, only when the need arises.  In any of these circumstances, employees who are permitted to work remotely should be required to enter into a remote working agreement. 

Remote working agreements should include the following provisions:
  • The nature of the remote working relationship.  Is it permanent and full-time?  Is it temporary as part of an accommodation request?  Is it fixed for a specific day per week?  Is it flexible?
  • Hours worked.  This is particularly important if non-exempt employees are working from home.
  • Equipment.  Who is providing the computer and related equipment?  If the company is providing, what is the process if equipment is damaged and who is responsible for repair?  Who is responsible for the costs of supplies such as printer ink, paper, and pens?  If the employer is providing equipment, set forth the specific equipment being provided.
  • Security.  Employers take care in ensuring its computer systems at work are secure.  This must include equipment at home, particularly if the employee is providing his or her own equipment.  If the employee handles confidential files that would require lock and key at work, the same requirements should be followed for files at home.
  • Suitable workspace.  The agreement should require a safe, suitable work space, free from distraction.  This does not necessarily require a special room/office as this could result in a disparate impact for employees with smaller homes.  The work space must be safe and comply with OSHA requirements.
  • Right to inspect.  While the company may not ever choose to inspect the home working environment, it should reserve the right to do so.
  • Prohibition on meetings in the home.  Employees should not be holding meetings in their home.
  • Address of home office.  Require the employee to provide the address and to notify HR of any changes to that address.
  • Not a substitute for day care, elder care or sick leave.  Make sure the agreement is clear that remote working is not a substitute for dependent care and that the employee will not provide dependent care during work hours.
  • For the employee’s benefit.  With remote working comes the risk of “doing business” in other jurisdictions with potential to subject the employer to jurisdiction of other state courts.  Ensure that the agreement is clear that the arrangement is solely for the employee’s benefit and that the employee agrees that working from home does not subject the employer to jurisdiction in that state.
  • At-will.  Unless the employee is a contracted employee, the agreement should be clear that it does not alter the at-will nature of the employment relationship.
  • Termination of arrangement.  The agreement should provide that the remote working arrangement can be terminated at any time.

While the above provisions should be considered for all remote working agreements, there may be other considerations, including, but not limited to, tax concerns, required attendance in the office, and performance requirements, depending on the position being worked remotely and the location of the remote office.  Before entering into any contract with an employee, it is best practices to have the agreement reviewed by counsel to ensure that the agreement is clear, legally binding, and minimizes risk to the organization.

Unintended Consequences of Remote Employees

By: Eileen Morgan Johnson, CAE

One of your valued employees comes to you with exciting news – her partner has been offered a big promotion, but it requires a move across country.  She would love to continue working for your company and you would hate to have to replace her.  So you both agree on a plan that allows her to continue to work remotely from her new state. Everyone is happy, until you learn about the unintended consequences of having a remote employee.

You expected to have to register your company for employee withholdings in her new state of residence.  Maybe you expected to have to arrange for workers compensation insurance too. But did you realize that the employment laws of the state where your employee is working are applicable to the employer/employee relationship?  Your employee handbook may not comply with the laws of the state where your remote employee is working.  Some employers solve this by trying to make all of their employment policies applicable to all of their employees, wherever they may be working.  However, a more practical solution, particularly if there are employees in multiple jurisdictions, is to include a section of the handbook with each applicable state’s unique requirements.

In addition to employment laws, there are compliance and tax issues to consider.  Having a single employee working from a state on a regular basis often meets the statutory definition of doing business in that state.  As a result, the employer could be required to register as a foreign corporation, file corporate income taxes, obtain and maintain a local business license, and collect sales and use taxes on any of the company’s sales of taxable products and services to residents of that state.  While all of this might be manageable if only one or two employees are remote, what happens when 15, 20 or more employees want to work remotely, each in a different state?  The cost of compliance can be crippling for a small to medium size employer.  Unfortunately, the law has not caught up to the 21st century remote and mobile workforce.  Until it does, employers should think twice about approving remote work in other states. 

Multi-Jurisdictional Issues in Today's Remote Workforce

By: Peter D. Guattery

You are an employer located in Columbia, Maryland, with a mobile workforce, which travels to client sites around the state and into the District of Columbia and Pennsylvania.  One of your employees, who regularly works between sites in Montgomery County and the District needs to be out because his child’s school has been closed by order of the county government.  You look to your policies and see that your employee has no more paid vacation leave available, and only one day of sick leave left.  Since your policy limits the use of sick leave to only those categories of leave permitted under Maryland law, you tell the employee that he will need to take a day of unpaid leave, because he is not eligible for paid sick leave. 
Shortly thereafter, a letter arrives in the mail, stating that you violated the terms of the Montgomery County Sick and Safe Leave Act.  But how can that be?  You are not a Montgomery County based business.  Under that local law, however, where your office is located does not matter.  Also, unlike the State leave law, the Montgomery County law provides for the use of sick leave in such a circumstance.  
With this particular employee, moreover, you may have to deal with three potentially applicable sick and safe leave laws.  Because this employee spends his time in the District of Columbia, he may be eligible for leave under the D.C. law as well.  The D.C. Sick and Safe Leave Act covers any employee who spends more than 50% of their time working in D.C. If an employee spends less than 50% of their time in D.C., but doesn’t work in any other state for more than 50% of their time and Washington D.C. is their primary place of employment, then they are also covered by the law.
These are just two examples of common multi-jurisdictional issues that arise with today’s mobile workforce.   Issues also routinely arise with respect to employees in remote locations who “telework” from home or a client site.  A Maryland employer with a single employee working from her home and visiting clients in the Bronx, for example, may present other issues. 
Last year, New York State enacted a broad anti-sexual harassment law.  The law applies to all employers of employees in the state.  Among the requirements are mandatory employee training and notice to employees of the company policy against harassment.  The policy must also include certain elements required by the law, such as information regarding where an employee may file a complaint or a charge of discrimination, as well as a complaint form.  Because the same employee is working in New York City, they will also be covered under the new grooming standards under New York City’s non-discrimination law; a law that protects persons with braided or cornrowed hair, for example.  
Laws also vary greatly among states as to when paychecks must be paid, whether and how workers are to be notified of their status (exempt/non-exempt) under applicable wage laws, and, more particularly, when a final paycheck must be paid.  In California, an employee who is terminated is entitled to a final paycheck immediately.  Employees who quit their employment without advance notice, however, must receive their final paycheck within 72 hours.  If the employee quits and gives at least 72 hours' notice, the final paycheck is due on the employee’s last day. 
Employers who fail to pay on time face steep penalties, known as the “waiting time penalty.”  The waiting time penalty is an amount equal to the employee's daily rate of pay for each day the wages remain unpaid, up to a maximum of thirty (30) calendar days.  As one can imagine, the penalty adds up quickly, and there is little room to negotiate the penalty down once the State Department of Labor becomes involved.  And keep in mind, California also protects employees by requiring that employees are entitled to payment of all accrued, unused vacation or PTO in their final pay.  Employers whose policy does not permit payout on termination cannot enforce such a policy in California, and if they do, they will suffer the “waiting time penalty.” 
These are but a few examples of the many ways in which having employees across multiple jurisdictions can present problems for the human resources team.  Other, less obvious examples might include coverage where no employees work at all, but where conduct which runs afoul of local laws may occur.  For example, there is an opinion from a D.C. court finding that the D.C. Human Rights Act applied to sexual harassment and discrimination occurring in the District, even though the employer’s office was located outside the District, and the employees involved worked at that office.  It was enough that the discriminatory acts – workday trysts at the harasser’s apartment in D.C. – occurred in the District for the Human Rights Act to apply.  This made a significant difference in the case, as damages under the D.C. law are not capped as they are under federal Title VII law and Maryland law.   
It would be possible to provide many more examples of potential traps that await unwary employers with remote or traveling employees.  With the increase in local legislation, including increased protections from harassment, wage theft, and localized minimum wage laws, employers can no longer be complacent in assuming their local law will govern how they interact with their employees.  In many cases, such an assumption will be simply wrong, and it could have a serious financial impact.  A little foresight and preparation can prevent real problems in the future.