Solo & Small Firm

In The Know: Legal Considerations With Remote Workers

By Cynthia Elkins

Prior to COVID-19 working remotely was not a common-place occurrence for businesses; however, with the concerns surrounding returning to work in this COVID-19 era, working remotely may be an option for employees that continues for some time. There are numerous factors that should be taken into consideration when dealing with a remote work force.  

Reimbursement of Expenses

It has been a long standing legal obligation that employers in California reimburse employees the reasonable and necessary expenses they personally incur while performing their job duties (California Labor Code Section 2802).

The reimbursement obligation covers many types of expenses that an employee may incur – such as the costs incurred in using a personal vehicle for business purposes. Several years ago in the case of Cochran v. Schwan’s Home Service, Inc., the California Court of Appeal found that that employers are required to reimburse the reasonable costs of the business use of a personal cell phone, though did not provide much guidance on what was “reasonable”. The court held that the requirement even extends to an employee who has a cellphone plan with unlimited minutes.

Now, this obligation for reimbursement may extend to the expenses incurred if an employee works remotely. Previously, expenses related to working remotely were not required to be reimbursed because such arrangements were not mandated and were optional for the convenience of the employee. Now, with the COVID-19 pandemic not ending any time soon, many employees will be forced to continue to work from home and would then be entitled to reimbursement for the reasonable and necessary expenses incurred, which may include a portion of the expenses associated with:

  • Cell phone or landline plan
  • Internet plan
  • Personal computer or tablet
  • Teleconferencing software or hardware
  • Printers
  • Supplies

It is unlikely that an employer would be required to reimburse other “home office” expenses such as higher-speed internet, larger computer monitors, or special ergonomic chairs which are for the convenience of the employee.

The amount of the reimbursement must be a separate line item on the pay stub. Employers should determine what they determine to be a “reasonable” amount and present this to the employees as a monthly reimbursement. If the employee feels that such amount is insufficient, have the employee present their breakdown of expenses and what they deem to be “reasonable”.

Wage & Hour Considerations

If a remote worker is classified as non-exempt, the employee must continue to comply with the wage and hour rules as if they were working on-site. This includes maintaining a time card and taking regulated rest breaks and meal breaks. Employees will continue to be entitled to overtime compensation for hours worked in excess of 8 per day or 40 hours per week. The difficulty comes in managing the hours worked by a remote worker who may take a few hours “off” during the day to assist their child with school work now that many children are distance learning.

Additionally, if the remote worker decides to work from somewhere other than the city and/or state of the employer, there could be other considerations. Where a worker is physically located controls which laws apply. If a worker usually works in Los Angeles and moves to San Diego, then California laws would remain applicable, but if San Diego had any local ordinance they would apply (e.g. minimum wage, paid sick leave, etc.)

If the employee decides to pack up and move out of state, then the wage and hour laws of the state the employee moves to will apply. Different payroll taxes and deductions may also apply to the out-of-state worker which the employer would have to determine.

Workers Compensation and Workplace Safety Issues

Employers should consult with their workers compensation insurance carrier as to their obligations to maintain coverage on the remote worker. A remote worker has the same rights to file a claim for workers’ compensation benefits if they’re injured in the course and scope of their remote work. The compensability of these claims can be questionable as it may be difficult to determine what the employee was doing when injured – were they “working” or were they helping their children.

Employers also are responsible for ensuring that the employee’s worksite is safe. This also becomes problematic when the employee is working from home – how does an employer ensure that proper safety measure have been taken by the employee. Employer can implement safety policies which requires the employee to designate a specific work station at home, and even provide photos of their workspace.

Remote Work Agreements

Employers should have those employees who will continue to work remotely sign a Remote Work Agreement which details the particulars of the arrangement. The Agreement should include, among other items, a statement of the hours to be worked, the non-exempt employee will comply with the meal/rest break and time keeping policies, that the Company’s Employee Handbook rules and policies remain in effect, that the employee is responsible for the security of any company owned property assigned to the employee and a strict confidentiality provision.

Is Remote Work An Entitlement?

Prior to COVID-19 many employees requested to work remotely, and many employers said no – that such arrangements did not fit the business. However, we are finding that remote work arrangement can in fact work. However, employers are not required or obligation to continue remote work arrangements — unless Stay at Home orders are reinstated, and/or such an arrangement is granted as a reasonable accommodation for an employee with a disability.

Employers may require employees to report to the work on-site as long as doing so is safe, and the company complies with all mandated safety precautions.

DISLCAIMER: Please note, the above is not an exhaustive list of all the changes to the law or resources for individuals and businesses. These new laws bring new challenges that often need to be handled on a case-by-case basis. Given the current fluid and rapidly evolving nature of the COVID-19 pandemic, this memo is provided solely as a reference tool to be used for informational purposes and is subject to change based on evolving information and it should not be construed or interpreted as providing legal advice related to any specific case or cases.

Cynthia Elkins is the principal of Elkins Employment Law, founded in 1998, and represents employers in all aspects of employment litigation and personnel/human resource compliance issues. The emphasis is on being preventative and proactive to avoid disputes and provide clients with “best practices.” You can reach Cynthia by e-mail at celkins@employer-law.com

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