Maintaining Compliance With Your Remote Workforce

Reaping the Advantages (& Avoiding the Pain)

of Handling Offsite Employees

Virtual Work Today The Workplace is 21st Century (i.e., anywhere) Statutes and Regulations are early 20th Century

Creating a virtual / telecommuting work environment has many benefits:

Reduced brick and mortar costs Reduced labor costs Optimization of resources

Telecommuter > Virtual Worker

The names have changed… The technology has changed… The rules have not.

◦Dept. of Labor◦Equal Employment Opportunity

Commission◦Occupational Safety and Health

Administration◦State Regulatory Agencies

Main body of US labor regulations dates from1930’s

Virtual Employee or Contractor?

“Working from home doth not a contractor make.”

IRS General Rule The general rule is that an individual is an independent contractor if the payer has the right to control or direct only the result of the work and not what will be done and how it will be done.

Virtual Employee or ContractorVirtual Employees are

employees subject to company policies, and with full access to benefits and regulatory protections.

Contractors are a business-to-business relationship. Compliance with the majority of tax and labor regulations is the Contractor’s responsibility.

Technology Considerations

Data Security Is the Information covered by HIPAA?

◦ Business Associate Agreement ◦ Document Transfer

Digital Signatures Jurisdictional Concerns 2005 UN Convention, Canadian PIPEDA, EU

Directives

Equipment Security ◦What happens to lost equipment?◦Security Software

There’s No Escaping OSHA(Occupational Health & Safety Act)OSHA Instruction CPL-2-0.125

◦ The OSH Act applies to a private employer who has any employees doing work in a workplace in the United States. It requires these employers to provide employment and a place of employment that are free from recognized, serious hazards, and to comply with OSHA standards and regulations

◦ Employers who are required, because of their size or industry classification, by the OSH Act to keep records of work-related injuries and illnesses, will continue to be responsible for keeping such records, regardless of whether the injuries occur in the factory, in a home office, or elsewhere, as long as they are work-related, and meet the recordability criteria of 29 CFR Part 1904. 

…or Workers CompensationGeneral Rule: Injuries incurred in a telecommuting/virtual employee’s home may be covered by workers’ compensation if the employee was injured in the course and scope of their employment.

◦Liability –Factors to Consider Regularity of work performed at home? Is the telecommuting an employee or employer

convenience? Designated Workspace / Business Equipment?

Wage and Hour ConcernsTracking Time Worked

◦Overtime Liability◦Meal and Rest Periods

Location is irrelevant; the Employer must ensure compliance with federal and state wage and hour laws.

Privacy IssuesConfidentiality and privacy issues

◦Email◦Internet Usage◦Access to Company Information◦Employee Monitoring

Have a Policy on Internet security and EmailShould state that workers have no expectation

of privacy or confidentiality when using work-related computer or Internet resources

Home Decorations

Work PostersNothing says Home Sweet Home more than an OSHA or FMLA Poster

Posting requirements do not exempt home offices. An employee working at home is required to post all required workplace posters in his/her home office.

Leaves and AccommodationsTelecommuting may be a disability accommodation.

◦EEOC Guidance suggests Telecommuting could be a reasonable accommodation.

◦Could be utilized as a part time option under FMLA ( But cannot be Required)

Document in detail the accommodation or the reasons for the denial.

Tax Issues

Generally, Telecommuting / Virtual Workers do not have to have a business license or pay business Taxes.

Independent contractors generally do.

Tax Issues

The Convenience of Employer Rule

Generally provides that days worked from home are treated as the employer’s “State” work days unless the nonresident employee worked outside of the employer’s State by necessity.

Tax Issues

Convenience of Employer Rule◦Example of Double Taxation:

Bob works for a company in New York and commutes there 2 days a week. Bob works from his home in Connecticut 3 days a week.Bob is taxed by New York on all his income earned from the New York employer. Bob is also taxed on his income by Connecticut. (Resident State)

A Telecommuter may avoid double taxation if they do not enter the employer “state.”

States with the Employer Convenience Rule

New York 20 NYCRR §132.18(a)

Delaware Del. Schedule W

Pennsylvania 61 Pa. Code §109.8

Nebraska Title 316, §22-003.01C(1)

Questions