Legal Concerns with Telecommuting

Telecommuting is becoming a popular option with employees and companies alike, including startups. Not only do employees save on the costs of getting to work and often report higher morale when working from home, but employers save on office space and other costs attendant to having employees who “come into work”; these cost savings can be critical for a startup. However, there are legal issues companies should be cognizant of when considering to allow employees to telecommute.

Telecommuting can pose much greater liability risks for the employer, many of which are outside of the employer’s direct control. Employers may be liable under worker’s compensation laws for injuries that occur to telecommuting employees, although the line between what may be covered by worker’s compensation and what might not be covered is unclear. Each case will be fact-specific; however, some cases suggest that coverage is not limited merely to strictly work-related injuries — indeed, an employer may be liable for a telecommuting employee who injures herself or himself while making a pot of coffee! The Occupational Safety and Hazard Act of 1970 requires that employers keep the workplace free from hazards that are likely to cause serious harm. Although OSHA, the administration that oversees implementation of the Act, does not conduct inspection of home-based workspaces, it advises that employers may nonetheless be responsible for hazards in the home that the employer knows or should know exist, in particular any hazardous materials or equipment that the employee is required to have to perform job duties.

In addition to liabilities inside the home-based office, employers can also be responsible for injuries that occur between the home office and the employer’s place of business. This differs from the standard law, which doesn’t hold employers responsible for injuries to employees or other that occur before the workday begins and/or while the employee travels to the employer’s place of business. However, in the case of telecommuting, once the workday has begun, the employee’s travel between the home office and the employer’s place of business can be seen as traveling between workplaces, which can make the employer liable for any injuries to the employee under workers’ compensation or any injuries to third-parties under vicarious liability.

Finally, employers should be cognizant of the risk of allowing telecommuting employees to possess or have access to company property (e.g. company computer) or company information (that may be sensitive or confidential) in the employee’s home, where it can potentially be accessed by non-employees and be damaged, destroyed, or lost, or perhaps more importantly, stolen. If you require a telecommuting employee to keep expensive equipment or sensitive information in his or her home office, you should also have policies in place that the employee should follow to safeguard that equipment or information, and the policies regarding liability in the event that equipment or information is damaged, destroyed, lost, or stolen.

I don’t mean to discourage employers from implementing telecommuting policies. Telecommuting is a great option companies can use to attract top talent and boost employee morale. However, companies should allow employees to telecommute only after carefully weighing the cost, productivity, and morale benefits against the legal risks and taking all reasonable steps to mitigate against those risks. Doing so can also potentially save an employer from a costly negligence suit brought as a result of a telecommuting employee.