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Telecommuting: A good fit for your company?

Allowing employees to work from home can be great for recruiting and retention of employees. Telecommuting can enhance your employees’ work/life balance, allow you to employ talent that cannot relocate and reduce the cost of office space, transportation and parking.

Last year, Yahoo’s CEO Melissa Mayer created quite a stir when she ended telecommuting at Yahoo, citing a desire for more employee collaboration.  However, other companies such as Deloitte, S.C. Johnson and Netflix, embrace telecommuting for at least some employees.  Knowing the legal and practical issues and how to manage them will help you decide if telecommuting is a good fit for your company.

Tracking Time Worked

Employers who allow non-exempt employees to work from home face challenges in complying with state and federal minimum wage and overtime laws.  Generally, Colorado employers must pay non-exempt workers overtime for all hours worked in excess of 40 hours per week (and additional rules apply to certain industries).  Tracking the number of hours worked and avoiding “off-the-clock” work can be difficult if an employee works at home.

Proper policies and audits can help you address these issues.  Draft a telecommuting policy and agreement that spells out the employee’s obligation to record all time worked.  Set established work times and tell telecommuters any work outside the scheduled work times must be approved in advance.  Routinely audit these employees’ timekeeping records and compare them to computer logins or other electronic records to identify and correct any problems.

Workers’ Compensation Coverage for At-Home Employees

Under Colorado’s Workers’ Compensation Act, an employee’s injury or illness is compensable when, at the time of the injury, the employee was performing services arising out of and in the course of his or her employment.  Accordingly, if an employee is injured while working from home, the injury is likely covered if it occurred while the employee was performing his or her job and not tending to personal matters. 

This can be difficult to control or prove, however.  For example, an Oregon court found a home decorator was covered under the state’s worker’s compensation law when she tripped over her dog while walking from her garage to her home work studio, ruling that the employer had control over whether she worked at home and thus exposed her to risks outside its control, such as her dog.  Sandberg v. J.C. Penney Co., Inc., 260 P.3d 495 (Or. Ct.App. 2011).  Employers should address this issue by including a provision in their telecommuting agreement whereby the employee agrees to report all injuries to his or her manager immediately and allow for inspection of the home workspace by the employer.  Designating a workspace at home and set hours may also help establish when injuries are work-related.

Data Security and Privacy Concerns

Security breaches are never easy to address but are particularly challenging when they are related to a remote worksite where third parties (e.g., spouses, children, visitors, etc.) may have access to computer systems and paper documents and outside internet service providers are used to access and transmit company and/or client data.  Employers should consult with their IT teams to ensure remote worksites are secured with appropriate firewalls and other security measures. 

Telecommuting policies should dictate that access and transmittal of all data be via a secure network only and employees should not expect privacy in their use of computer systems and electronic devices as employer monitoring may occur.  The policy should require computers and confidential paperwork to be locked when not in use and access by family or other household members restricted.  You may also want employees to sign nondisclosure or confidentiality agreements that emphasize the protection of confidential and proprietary data that applies wherever the data is located or accessed, including remote access and access through mobile devices. 


Carefully identity employees who are eligible for telecommuting.  It is always easier to expand a program than rein it in.  Hold telecommuting employees to the same productivity standards they would have if they worked in the office.  And consider cancelling the privilege if a telecommuting employee’s productivity falls.

Address Concerns to Make Telecommuting A Success

Although telecommuting can raise unique employment law concerns, it can work with proper planning and communication.  By using a written telecommuting agreement signed by each employee allowed to work from home, employers can establish how the remote working relationship will operate and incorporate appropriate protections to address these special concerns.  While it is not right for every company, telecommuting can be a win-win flexible work arrangement that benefits your organization as well as your employees.    

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Jude Biggs

Jude Biggs, a partner with Holland & Hart LLP, advises employers on a variety of local, multi-state and global employment issues, and defends employers in single plaintiff and class action cases.  She may be reached at 303-473-2707 or jbiggs@hollandhart.com

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