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January 2022   Volume 20, Number 1        

employee working from home

How to Avoid the Legal Pitfalls of Telecommuting

Are you an employer who started letting employees work from home during the COVID–19 pandemic?

Or maybe telecommuting has been part of your work environment even before the pandemic. In any case, here are some things to be aware of to be sure you’re not opening yourself to litigation.

As a first step, the best thing you can do to avoid potential legal issues is to have a formal company policy and a signed agreement that correlates to that policy. Both documents should address any potential problems that could arise when an employee works from home or in a public space away from the office.

Here are some of the issues that should be addressed in the policy and the agreement.


The company policy should draw attention to the fact that telecommuters who use their home computer must realize that an employer has the right to monitor or inspect an employee’s computer — even if the employee is using a personal computer. The agreement should include a nondisclosure agreement requiring employees to promise not to share company information while allowing the employer to retrieve files at will.


To ensure that hackers can’t access company information from an employee’s computer, employees should operate their computer from a secure server or a virtual private network. As an extra layer of protection, employees should also use encryption, passwords and network firewalls.


The telecommuting agreement should list the employee’s hours and require them to keep meticulous records or use an electronic tracking system. In situations where workhours fluctuate based on business needs, there should be an agreement specifying how many hours the employee will be paid each week — regardless of the hours they work.

Even with salaried employees exempt from overtime under the federal Fair Labor Standards Act, establishing normal work hours, including when employees are expected to be available by phone or email, usually creates a more productive, dependable work routine.


The Occupational Safety and Health Act (OSHA) mandates that employers maintain a safe workplace for employees by preventing foreseeable hazards — even when employee works from home. While an employer generally does not have the right to go into an employee’s home, an employer can make it a part of the telecommuting agreement that to ensure compliance with OSHA standards inspection of the employee’s home may be permitted.

Workplace Safety

Most courts consider home workplace locations an extension of the office. That means that an employer could be held liable if an employee is injured while working at home. Employers are encouraged to create a specific policy regarding work–related injuries that may occur in an employee’s home. The policy or agreement should designate a specific area of the employee’s house where work will be performed — preferably apart from the rest of the house to ensure that injuries occur only in the designated areas.


Your policy should indicate which group or groups are eligible to work from home, and under what circumstances. Make sure that your policy doesn’t apply to groups that could be identified in a manner suggesting discriminatory intent, however, such as only women or only young employees.

Class Action Considerations

Ideally, each telecommuting employee should have a separate, individualized agreement. Individualized agreements protect employers from class action lawsuits. For instance, in a situation where an employee brings a suit alleging the employer failed to properly record work hours, if all employees signed the same agreement, the suit could be applied to all non–exempt telecommuting employees.

Zoning and Taxes

Some local ordinances restrict the ability of individuals to conduct business in their homes, and in some cases, permit local governments to levy taxes. The telecommuting agreement should stress that it is the employee’s responsibility to ensure compliance with local zoning and regulations.

It is in your firm’s power, of course, to discontinue telecommunicating when you believe the arrangement no longer meets your company’s needs and your agreement should state so. It’s in everyone’s best interest, though, for you to provide employees with at least a 30 days’ notice, especially to accommodate childcare issues and other problems that may arise from the change.

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In this issue:

This Just In

Pre–Tax Flexible Benefits — The Pros and Cons of Cafeteria Plans

How to Avoid the Legal Pitfalls of Telecommuting

What to Expect for Retirement Savings Plans in 2022

No Single Benefit Interests Every Age Group



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