Working from a home office is a growing trend, attracting a wide range of employees and business types. It can be a win-win set up for both employers and employees to get the job done. The legal issues that come up on a second look don't have to take away from the attraction of home-based work.
Whether you're an employer or employee, awareness of possible legal issues enables you to plan for solutions, and everyone is set for success from the home office.
Employee Status and Location Questions
Starting with the basics, there may be questions about the status of the employment relationship. Is a worker an employee or maybe an independent contractor? Legal problems come up more often when workers are treated as independent contractors when in fact they're truly employees.
Which State's Laws Apply
In most situations, your physical location is the key. As a general rule, when an employee works from home, the labor and employment laws of the state where the home is located apply.
Questions about location may depend on the facts and the type of law, too. State tax laws are a good example. To which state does an employee owe income taxes on wages? The answer may depend on the employer's and employee's locations, whether or not the employee travels for work and state tax laws.
Employers Need Telecommuting Policies
Many pitfalls and problems can be avoided when employers have telecommuting policies in place. Here are some telecommuting policy topics to cover:
- Working hours
- Work space, including safety concerns
- Eligibility, including positions and individual employee qualifications
- Equipment and services, from phone and internet access to office equipment and furniture
- Security and confidentiality for employer information, equipment and systems
- Employee privacy and employer access to inspect or monitor a home based workspace
- Insurance, covering workers' compensation, general liability, property and vehicle use, if needed
Employment Laws and Telecommuting
Employment laws still apply when employees work from home, so watch for different ways these laws might apply in the home office setting.
Fair and Even Policy Prevents Discrimination
Discrimination laws apply to employees even when they're home-based. The terms of a telecommuting policy can't discriminate, and the policy must be applied fairly. How a policy defines a work-from-home program and how workers qualify can keep a plan clear of discrimination claims.
Also, working from a home office can be a reasonable accommodation for an employee's disability for purposes of the Americans with Disabilities Act (ADA).
Wage and Hour Laws
The Fair Labor Standards Act (FLSA) and similar state laws apply to home-based workers. Unless workers have exempt status, employers need a system for tracking and reporting hours worked, including overtime policies. Consistent use of a time reporting system helps avoid claims of wage and hour law violations, and helps both sides maximize telecommuting time efficiencies.
Employers also need to plan for how home based workers are paid for work outside the home office. If most working hours are from a home office, a worker may need to be paid for time and travel if they need to leave home for any work.
Next: Safety concerns and Workers' Compensation