Remote Work Policies: Legal Risks and Compliance Considerations

Remote and hybrid work arrangements have become a lasting part of modern business operations. While these arrangements can provide employers and employees with greater flexibility, they also create legal and compliance issues that may be less visible than those arising in a traditional workplace. Wage and hour requirements, employee expenses, workplace safety, discrimination, privacy, information security, and leave obligations can all become more complicated when employees work outside the employer’s physical location.

For employers in California and Texas, a clearly drafted remote work policy can help establish expectations and reduce uncertainty. However, written policies must also be supported by consistent practices that comply with the laws applicable to the locations where employees actually perform their work.

Why Remote Work Creates Legal Risk

Allowing an employee to work from home does not eliminate the employer’s existing legal obligations. In some circumstances, remote work creates additional compliance questions because employers have less direct control over the employee’s working environment and daily activities.

Common areas of concern include:

• Wage and Hour Compliance: Accurately tracking working time, overtime, and required breaks.
• Business Expenses: Determining whether remote work expenses must be reimbursed.
• Employee Privacy: Establishing appropriate boundaries for electronic monitoring.
• Workplace Safety: Addressing injuries that occur while employees work remotely.
• Discrimination and Accommodation: Applying remote work policies consistently and addressing qualifying accommodation requests.
• Multi-State Compliance: Determining which employment requirements apply when employees work from another jurisdiction.

Employers should consider these issues before approving remote work rather than waiting until a dispute develops.

Wage and Hour Compliance for Remote Employees

Accurate timekeeping can become particularly important for nonexempt employees working remotely. Without traditional workplace supervision, disputes may arise regarding when an employee began working, whether work occurred outside scheduled hours, and whether required breaks were provided.

Remote work policies should clearly address:

• Required working hours and schedules.
• Timekeeping procedures.
• Rules regarding overtime authorization.
• Procedures for reporting all time worked.
• Meal and rest break requirements where applicable.

An employer’s policy prohibiting unauthorized overtime generally should not be treated as permission to avoid paying for compensable time that the employer knew or should have known was worked. Employers should therefore train supervisors to manage remote employees without encouraging off-the-clock work.

Remote Work Expense Reimbursement

Remote employees may use internet connections, mobile phones, computers, office supplies, or other resources to perform their jobs. Whether an employer must reimburse these expenses depends on applicable law and the circumstances.

California employers should pay particular attention to expense reimbursement requirements when employees necessarily incur costs while performing their duties. A remote work policy should identify which expenses are reimbursable and establish a clear process for submitting reimbursement requests.

Businesses should periodically review these policies as remote work arrangements and technology requirements evolve.

Employee Privacy and Remote Monitoring

Employers may use technology to monitor system access, productivity, communications, or the use of company equipment. Remote monitoring, however, can raise significant privacy concerns when the employee is working from a personal residence.

Before implementing monitoring tools, employers should consider:

• What information will be collected.
• Why the information is necessary.
• Whether employees have received appropriate notice.
• How collected information will be stored and accessed.
• Whether monitoring extends beyond legitimate business purposes.

Clear policies can help employees understand what monitoring occurs when they use employer-provided systems and devices.

Workplace Safety and Remote Work Injuries

An injury does not necessarily fall outside workplace injury rules merely because it occurs at an employee’s home. Questions may arise regarding whether the employee was performing job-related duties when the injury occurred and whether the circumstances fall within applicable workers’ compensation requirements.

Employers can reduce uncertainty by establishing expectations regarding designated work areas, reporting workplace injuries promptly, and maintaining procedures for documenting incidents involving remote employees.

Remote Work as a Potential Accommodation

Remote work requests may sometimes involve disability accommodation obligations. Employers should avoid automatically approving or denying such requests solely because of a general company policy.

Depending on applicable law and the circumstances, employers may need to evaluate:

• The employee’s essential job functions.
• The nature of the requested accommodation.
• Whether remote work would allow the employee to perform essential duties.
• Whether alternative accommodations may be effective.
• Whether the proposed arrangement would create an undue hardship under the applicable legal standard.

Consistent procedures for evaluating accommodation requests can help reduce discrimination and retaliation risks.

The Multi-State Employee Problem

Remote work can create unexpected compliance obligations when employees perform their jobs from states other than the employer’s primary location. Employment laws may be tied to where the employee actually works rather than where the company’s headquarters are located.

Potential issues can involve:

• Minimum wage and overtime requirements.
• Paid leave obligations.
• Payroll and tax registration.
• Expense reimbursement requirements.
• Workers’ compensation coverage.
• Employee privacy requirements.

Employers should therefore establish procedures requiring employees to obtain approval before permanently or temporarily relocating their remote work location.

What a Remote Work Policy Should Address

A comprehensive remote work policy should clearly explain both employee responsibilities and employer expectations. Depending on the business, important provisions may include:

• Eligibility requirements for remote work.
• Approved work locations.
• Working hours and availability expectations.
• Timekeeping and overtime procedures.
• Equipment ownership and acceptable use.
• Expense reimbursement procedures.
• Confidentiality and information security requirements.
• Monitoring and privacy expectations.
• Workplace safety procedures.
• Procedures for modifying or ending remote arrangements.

Employers should also clarify that remote work arrangements remain subject to applicable employment laws and legitimate business requirements.

Consistent Enforcement Matters

Even a carefully drafted policy can create problems when it is applied inconsistently. For example, disputes may arise if employees performing similar roles receive substantially different remote work opportunities without a legitimate business reason.

Employers should document decisions concerning remote work eligibility, schedule changes, accommodation requests, and revocation of remote privileges. Consistency can become particularly important when defending discrimination, retaliation, or wrongful termination claims.

Best Practices for Employers

• Maintain a written remote or hybrid work policy.
• Require approval before employees change their remote work location.
• Implement reliable timekeeping procedures for nonexempt employees.
• Establish clear expense reimbursement procedures.
• Review monitoring practices for privacy compliance.
• Protect confidential and proprietary business information.
• Evaluate accommodation requests individually.
• Document significant remote work decisions.
• Review policies periodically as employment laws and business practices change.

A structured remote work program can provide flexibility without sacrificing the consistency and documentation necessary for effective employment compliance.

Did You Know?

An employee working remotely from another state can potentially create new employment, payroll, tax, leave, or workers’ compensation obligations for the employer. Allowing employees to change work locations without approval can therefore create compliance risks that extend well beyond the remote work policy itself.

Legal Guidance for Remote Work Compliance

Remote work arrangements can involve overlapping questions concerning wage and hour compliance, employee privacy, workplace accommodations, expense reimbursement, multi-state employment, and workplace policies. Putterman Law helps businesses evaluate employment practices, address workplace disputes, and manage litigation risks arising from evolving work arrangements.

Learn more about employment litigation services at Putterman Law

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