In the previous part of this series, we wrote about how the shift to permanent remote work comes with some challenges that implicate accommodation laws and performance management of remote workers. In part two of this series on managing a future remote workforce, we tackle some of the biggest wage-hour and privacy issues that are likely to arise and/or be more prevalent with remote workers.
- Reimbursable Business Expenses
Many companies' expense reimbursement policies are geared toward employee travel. But as remote work becomes a more permanent arrangement for many employees in the future, employers should consider what types of expenses employees might incur for equipment and services purchased to turn temporary home offices into their permanent, and only, work locations in the future. Obvious ones include broadband internet service, cell phone or VoIP telephone lines, high-speed wireless routers, printers/scanners, web-enabled video cameras, and more traditional office supplies (e.g. copy paper and printer toner). But what about "green screen" equipment? And what if a remote worker buys a generator to permit work to continue when her home loses electricity for several days due to storms? As remote work arrangements become more widespread and permanent, the types of expenses for which workers may demand reimbursement are likely to grow.
A few states and localities, including but not limited to California, Illinois, and Seattle, have statutes expressly requiring employers to indemnify employees for all necessary expenses incurred as a direct result of performing the duties of the employee's job. A number of other states have more general laws that could be interpreted to require reimbursement of necessary business expenses. And the types of expenses that are at least partially reimbursable can include expenses that the employee was already incurring before becoming a remote worker and will continue to use for personal reasons as well, such as the cost of internet service.
Thus, employers need to think carefully about and identify the types of new and additional expenses that the permanent remote workers of the future might need to incur in order to work remotely on a long-term basis.
- Compensability of Remote Worktime
Another challenge employers can expect to face are abnormal hours that remote workers may choose to work if not closely managed. Exempt employees who must be paid a guaranteed salary to meet the requirements for one of the white-collar overtime pay exemptions must receive the full amount of their guaranteed salary even in weeks of only partial work, although their vacation, sick, or other paid time off banks can be charged for their non-work hours as appropriate. This means that if the remote workers are not held to an agreed-upon schedule, they will receive the same guaranteed salary each week even when they may, unbeknownst to the employer, be devoting intermittent portions of their regular work hours to non-productive personal activities for which their in-office colleagues are required to use paid time off, such as tending to the needs of children or other family members, exercising, walking the dog, or running personal errands. The issue becomes how does the employer tell when the remote worker is "working" and when are they on personal time. The short answer to this question is activity monitoring, which comes with a whole new set of privacy issues. But more on that later.
As long as they receive their guaranteed salary in each workweek, remote exempt workers are not entitled to overtime pay when they work more than 40 hours per week (or, in some states, more than 8 hours per day). Therefore, the increased flexibility they may have when remote working is not as big of an issue as it is with non-exempt remote workers.
Non-exempt, hourly-paid remote employees present a bigger challenge because they are only paid for the hours that they actually work, and knowing when a remote employee is and is not working can be challenging when the employees cannot be observed in person. This challenge is complicated by the "continuous workday" rule for timekeeping, which says that all time from the first activity of the day until the last activity of the day, except for meal breaks of 30 minutes or more in length, is compensable even if there are pockets of time during which no productive work is performed. If a non-exempt remote worker is not accurate and honest in their timesheets about the periods of time that they devote to non-productive, personal activities or if the breaks they take for such personal pursuits are not of sufficient length to be segmented out of the "continuous workday," employers may find they are paying remote workers for more non-productive time than their in-office colleagues.
For these reasons, training remote workers and their supervisors periodically about the timekeeping policies and procedures and regularly reminding them of the importance of accuracy in their timesheets is even more important than these steps are with in-office workers. Managing remote workers' work schedules and touching base with them regularly to ensure they are abiding by the agreed-upon work schedule is important as well.
- Tracking Meal and Rest Breaks
Another challenge with non-exempt remote workers arising from their remoteness is the difficulty in ensuring that they are complying with company policies and laws concerning when during their workday they should take duty-free meal and rest breaks, how many breaks they should take, and how long the breaks should last.
Some states with meal and rest break laws allow employees to voluntarily waive or work through them, but a few do not. And even in states where the break requirements may be waived, employees may assert that they did not skip the breaks by choice but rather were forced to work through them because of work requirements, such as too many back-to-back conference calls or generally having too much work to be completed by employer-established deadlines.
With respect to meal breaks, remote workers may also claim that they did not have sufficient time to eat and took far less than the approximately 30 minutes necessary for the meal break to be treated as unpaid time under both federal law and applicable state law. Furthermore, when meal breaks are skipped or shorter than approximately 30 minutes in length, if the employee nonetheless reports a full meal break on their timesheet, an employer can be found liable for underpaying wages if the remote worker's supervisor or manager knew or should have known that a full, duty-free meal break was not taken.
As with the worktime issue noted in the prior section, some of the best practices to limit risk of meal and rest break violations with remote workers are training and reminders of the timekeeping policies and procedures and enforcement of the agreed-upon work schedule. Others to consider include attestations on the timesheet that require the remote worker to confirm that the timesheet is accurate and that all meal and rest breaks were provided and either taken in full or voluntarily waived by the employee.
- Privacy Considerations
As noted above, a number of the legal issues with managing a remote workforce can be mitigated with technology to monitor the employee. Knowing what they are doing and when would give the employer the capacity to manage "worktime." The current wage-hour laws are built on a definition of worktime that is tied to the worksite: if the worker is on the employer's premises at their worksite and not standing or sitting idly, waiting for their shift to begin, their presence in this physical location may connote worktime. Thus, the traditional basic assumption under wage-hour laws has been that location is a proxy for "status" (if you are at work, you are working). In the virtual world, which is the remote work world, that proxy cannot exist. There is no "physical location" to be used as such a proxy because the personal and worktime location for remote workers is the same: their home.
Since working status cannot be determine by physical location for remote workers, something else will need to be used to identify and manage such status. Technology tools which do this are already deployed. The challenge is that in the virtual environment of remote work, those tools and techniques that are needed to determine status will, by necessity, also observe the worker when they are not working. Surveillance of the individual in their own home during personal time is not going to work well without some sort of privacy protection embedded in how this technology is used.
Thus, while employers will need to use monitoring tools to ensure they do not run afoul of the previously noted wage and hour laws concerning the compensability of "worktime," there is the countervailing privacy law consideration which will require the deployment of the monitoring tools to be done in a transparent and proportional manner.
For example, employers do not need to monitor computer or mobile device usage of remote workers at the same level of granularity that they do when those devices are on the corporate network. Tailoring what data is looked at, how long it is retained, and what can be done with the data (e.g. limiting the kinds of adverse actions against the employee based on monitoring) are all part of a standard privacy compliance program, and should be used in this instance as well.
Consent is also a critical component of the monitoring program. The employees need to be told how the monitoring will work, what it will be used for, and how they can turn off the monitoring. These are controls that are commonly found in the consumer context. Because employees are not employees 100% of the time, those same privacy controls in the consumer context should be used in the remote work context so the employer can determine when the individual's status is that of a "worker" or that of a "consumer."
Conclusion
The above issues should not be considered a comprehensive list of ways in which the move to a permanent remote workforce in the future is likely to pose wage-hour and privacy legal compliance challenges. But the issues noted above are likely to be among the largest challenges for all employers with a remote workforce. And the best way to manage the risks posed by these challenges requires careful consideration of the employer's specific circumstances.
Originally Published by Seyfarth Shaw, December 2020
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
