What's the One Thing Every Company's Telecommuting Policy Must Include?

by JD Supra Perspectives
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The practice of employees performing their jobs remotely, usually at home (versus physically turning up for work every day in a central office), has gained in popularity over recent years as technology has made it easier for workers to get the job done, no matter where they're located.

However, telecommuting is not without controversy. In early 2013 Yahoo!'s new CEO, Marissa Mayer, famously canceled the company's work-from-home policy, citing among other reasons the need to spur innovation and collaboration (something that only happened when people were physically present) at the beleaguered Internet giant.

The Yahoo! work-from-home story also underscored that telecommuting is not a legal right to be enjoyed by all employees, but a perk - although, now, a recent court decision has found that, in some cases, working form home might be exactly what the doctor ordered. Last month, the Sixth Circuit determined in EEOC v. Ford Motor Company that employers may need to allow employees to telecommute as a reasonable accomodation for a disability, under the Americans with Disabilities Act (read background and analysis of the decision here). Which begs the question:

If, under certain circumstances, employers are required to accomodate remote work, what essential elements should be included in any company's Telecommuting Plan?

That's what we put to JD Supra contributors in light of the EEOC v. Ford Motor Company decision. Here is what we heard back.

A Clear Definition of Eligibility

According to our contributors, a definition of eligibility is perhaps the single most important aspect of any telecommuting plan. We heard this phrased in a number of ways, each with distinct action items worthy of consideration as you put together your plan:

1. Define Which Jobs May Be Performed Remotely

From Katie Parham, attorney in the Memphis office of FordHarrison: “It is important for employers to craft a telecommuting policy that clearly defines those jobs which may be performed remotely. This does not mean that an employee in one of the listed positions has a right to telecommute, it only means that, under certain circumstance (including disability), a telecommuting arrangement may be appropriate. Positions that are often amenable to telecommuting arrangements include those with clearly defined objectives and measurable results, those which require little direct supervision or contact with customers or co-workers, and those that do not require specialized equipment. The job descriptions for those jobs that are deemed unsuitable to telecommuting arrangements should reflect the requirements that  render them unsuitable, such as frequent interaction with co-workers and customers.”

2. Explicitly State That Telecommuting Requests Will Be Considered Case By Case

From Kelly Hughes, a shareholder in the Charlotte office of Ogletree Deakins: "In my experience, the one must-have provision in a company’s telecommuting policy is an explicit statement that not all jobs and/or positions within the company are conducive to telecommuting and, as a result, requests to telecommute will be considered on an individualized basis taking into account various factors, including but not limited to, whether physical presence at the office (plant, facility, worksite, etc.) is an essential function of the particular position the employee holds or desires."

3. Clarify How to Handle Recordkeeping, Overtime, Workplace Inspections, Emergencies, and Related Issues

From Thomas Birchfield, managing partner in the Louisville, KY, office of Fisher & Phillips: "Employers (even those who have no intention of allowing remote work except as an ADA reasonable accommodation) should establish a written remote work policy before anyone needs, requests or is allowed to work remotely. Topping the list of issues the policy should address is defining eligibility for remote work, what exceptions may exist and the circumstances in which remote working may be allowed, denied or taken away. This is the most important issue because in defining eligibility, the employer will have necessarily considered issues like the ability to keep accurate time records, the circumstances in which non-exempt employees may work overtime, workplace safety issues, how to report accidents and what will be covered by workers’ compensation, emergency and inclement weather issues, whether and under what circumstances management will inspect the remote workplace, who is responsible for purchasing, maintaining and repairing necessary equipment, requirements for reporting to the office (meetings, conferences, etc), how meetings with clients and other third parties will be handled, and insurance and tax issues. Depending on how the analysis of the sub issues turn out with respect to risk, will determine the scope of eligibility."

4. Require Employees to Sign a Telecommuting Agreement

From Dena Calo Partner and Director of the firm’s HR Practice Group at Genova Burns Giantomasi Webster : "When drafting a telecommuting policy, companies should not forget to require employees to sign a separate telecommuting agreement. This agreement sets forth the specific parameters of the telecommuting arrangement with this particular employee and the expectations between the employer and employee in order for this arrangement to be successful. Such an agreement, to be signed by the employee, will outline employer’s exact requirements for the employee during the telecommuting period and further explains:

  • The length of telecommuting period;
  • The hours that the employee is required to work each day;
  • The manner in which the employee is required to document his/her hours;
  • The meeting frequency with supervisors and/or subordinates and the method of meeting (e.g., Skype, internal company software);
  • Requirements for in person office meetings and frequency of same;
  • Requirements for the use and safekeeping of company-provided equipment;
  • The manner and method of how work will be delivered to and from the remote workspace;
  • Explanation of expenses to be covered for that employee’s position and responsibilities; and
  • Explanation that permission to telecommute can be withdrawn at any time.

In this way, each employee will always understand the exact nature of the arrangement and its parameters."

Also: A Taxing Issue

Allowing one employee to telecommute in the telecommuter’s jurisdiction could result in a significant corporate income tax liability...

Of course, as Brendan Lund of law firm Carr McClellan reminds us, eligibility is just one of the key issues to consider as you develop your company's telecommuting plan. Another: taxes. From attorney Lund: "Accommodating a telecommuting employee now creates income tax issues for the employer. Most states take the position that a telecommuting employee – even one that just writes code for the employer – working from its home state will create taxable nexus for the employer.

Employers need to perform a cost-benefit analysis in states in which they do not have a presence for corporate income tax filing purposes to determine whether it is cost-effective for employees to telecommute in these states. Allowing one employee to telecommute in the telecommuter’s jurisdiction could result in a significant corporate income tax liability.

Many corporations are maintaining a policy by which employees are only permitted to telecommute if the employer is already registered for corporate income tax and state income tax withholding in a particular state or locality. Other telecommuting policies require employees to report where their work will be performed. Maintaining these requirements in a policy helps avoid surprises come tax return filing time. Or, worse yet, helps avoid the nasty realization that a business has a growing tax liability dating back several years."

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