About the Authors

Ron Chapman, Jr. – Shareholder, Ogletree Deakins (Dallas)
Mr. Chapman serves on Ogletree Deakins’ five-member Board of Directors. He is Board Certified in Labor and Employment Law by the Texas Board of Legal Specialization and represents employers in all areas of labor and employment law, including discrimination, harassment, retaliation, wage and hour, non-competition and non-disclosure covenants, leaves of absence, employment agreements and policies, union campaigns, collective bargaining, unfair labor practices, and workplace safety. Mr. Chapman has defended clients in over 25 states and the U.S. Virgin Islands, including class and collective actions, and regularly provides counseling to help clients navigate both legal and practical considerations. ron.chapman@ogletreedeakins.com

Michael H. Bell – Shareholder, Ogletree Deakins (Dallas)
Mr. Bell has successfully litigated numerous disputes on behalf of employers involving a wide variety of employment law issues, including discrimination and retaliation, sexual harassment, unfair labor practices, collective bargaining agreements, and covenants not to compete. He also has broad experience in developing employee handbooks and employment contracts, training managers, and responding to charges of discrimination. Mr. Bell is Board Certified in Labor and Employment Law by the Texas Board of Legal Specialization and has repeatedly been named a “Rising Star” by Texas Monthly magazine, an award given to the top 2.5 percent of Texas attorneys 40 or younger. michael.bell@ogletreedeakins.com

Ogletree, Deakins, Nash, Smoak & Stewart, P.C. | Preston Commons West, 8117 Preston Road, Suite 500, Dallas, Texas 75225 | Phone 214.987.3800


1. The Remote Workplace Generally

Over the past few decades, advancements in cloud computing, smartphones, and portable computers (and, of course, gas prices) have made working remotely a viable and attractive option for many employers and their employees. Notwithstanding the benefits, there are risks to implementing a virtual workplace. Some of these are practical, such as technology expenses and the risk of certain employees performing poorly in an unsupervised environment. Just as important, however, are the legal concerns that employers must address, which include (1) special challenges in compliance with state and federal employment laws, (2) balancing employee privacy interests with company confidentiality requirements, and (3) potential employer liability for remote workers’ conduct.

2. Federal and State Law Compliance

a. Wage and Hour Requirements

A major legal risk of working remotely is the potential exposure to unpaid overtime claims. The Fair Labor Standards Act (“FLSA”) requires employers to pay non-exempt employees straight time compensation for all hours worked and overtime compensation for hours worked over 40 per week. Moreover, state laws may impose additional duties.

There is inherent difficulty in (1) tracking the amount of hours worked by an employee working remotely, and (2) ensuring such employee takes the necessary meal and rest breaks that may be required under certain state laws. However, there are ways to mitigate this risk, such as by a clear written policy requiring that employees obtain advance permission for all overtime hours worked and requiring employees to log-in and log-out of an online sign in sheet to keep track of time. Nonetheless, even if the employer has these policies in place, in the event an employee works overtime without obtaining the necessary approval, that employer is still required under the FLSA to pay the employee for all regular and overtime hours worked.

Further, while time spent commuting to and from work for non-remote workers is typically not considered “hours worked” for which compensation is required under the FLSA, if a remote worker is required to commute to the office or another location on occasion (such as for required training sessions), it is likely that such commute time would require compensation. Lastly, if non-exempt employees are regularly required or permitted to check work e-mail or voicemail during non-traditional work hours, the time spent doing so is considered “hours worked” under the FLSA and must be compensated and counted towards total hours worked.

b. Reasonable Accommodation and Discrimination Issues

Employers that offer remote working arrangements also may run the risk of exposing themselves to discrimination lawsuits. For example, where an employer offers remote working arrangements that adversely affect a disproportionate number of employees who are members of the same protected class, an employer may expose itself to a disparate impact claim.

In addition, an employer may be required, under the Americans with Disabilities Act (“ADA”) and similar state laws, to accommodate an employee through the implementation of a remote working arrangement. Specifically, an employee is required to provide a reasonable accommodation to allow an employee with a disability to perform the essential functions of his or her position. Courts have concluded that telecommuting may constitute a form of reasonable accommodation under the ADA, and the likelihood of such a finding increases if the employer regularly offers telecommuting as an option to non-disabled employees.

c. OSHA and Workers’ Compensation

Currently, the Occupational Health and Safety Administration (“OSHA”) does not conduct (or require) inspections of a home office unless it receives a complaint indicating a violation of a safety or health standard exists that threatens physical harm or imminent danger. However, employers still may be exposed to liability for hazards caused by employer-provided equipment in remote workplaces. In addition, clear policies should be in place and communicated to employees informing them that they are responsible for ensuring that their home-based worksite conforms to OSHA requirements.

Workers’ compensation laws vary among different states, but generally require that an injury or illness be one that has arisen out of and in the course of employment to be compensable. As witnesses to injuries or illnesses occurring at remote worksites may be few or nonexistent, employers may experience difficulty in determining whether an injury occurred during the course of employment.

d. FMLA and WARN Act Coverage

The Family and Medical Leave Act (“FMLA”) only requires employers to provide FMLA leave to an eligible employee when fifty or more employees work within seventy-five miles of the employee’s worksite. Thus, having multiple remote worksites within close geographic proximity may make it difficult to determine the existence of FMLA coverage.

Similar issues are present with the Worker Adjustment and Retraining Notification (“WARN”) Act, which requires covered employers to provide advance notice of plant closings or mass layoffs to affected employees. Generally, employers are covered if they have 100 or more employees, not counting employees who have worked less than six months in the last 12 months and not counting employees who work an average of fewer than 20 hours a week. Employers should consider and seek legal advice regarding whether remote employees (1) should be counted for purposes of WARN coverage and (2) qualify as “affected employees” entitled to WARN notices.

e. Posting of Documents Required by Federal and State Law

Employers are required to post certain forms and documents according to federal and state employment laws. Many of these forms may be posted electronically. Moreover, employee handbooks and policies can be distributed electronically, but employers should ensure employees who work remotely have reasonable electronic access and obtain an electronic signature so as to ensure the employee was on notice of the policies, procedures, and expectations. In addition, employers should ensure they follow state law requirements for wage statements, direct deposit, and payroll cards. Finally, benefit plan documents are subject to various regulations that require certain procedures to be followed where an employer electronically furnishes benefit plan documents to an employee.

3. Employee Privacy vs. Employer Confidential Information

a. Confidential and Proprietary Information

Working remotely also raises the risk of unauthorized disclosure of confidential and proprietary information. Employees working remotely that use personal computers to receive and store confidential information are subject to hacking as well as inadvertent loss of data. Employers should take measures to safeguard confidential and proprietary information. These measures may include, but are not limited to: (1) requiring the use of company-provided equipment and security protocols, (2) including non-disclosure agreements in telecommuting policies, (3) requiring confidential and proprietary information be stored and secured in locked file cabinets, (4) limiting use of home office equipment to business only purposes, and (5) requiring the immediate return and protection of confidential and proprietary information upon the employee’s termination or resignation.

b. Right to Restrict Access and Monitoring of Electronics

Employees generally do not have a right to use an employer’s electronic devices and systems for personal purposes, and the employer’s policy should clearly say so. In addition, an employer has the right to monitor information stored on its own electronic devices, except for public sector employees who have a Fourth Amendment right of privacy. Generally, employers can record communications made in the workplace, both by email and telephone. Clear notice should be given to employees about the employer’s intent to monitor their online activities.

Likewise, there is no direct federal regulation of GPS surveillance, and recent judicial decisions have found an employer’s interest in employer-owned property generally trumps employee privacy interests regarding location surveillance. Employers should plan implementation of GPS tracking carefully and according to the legal requirements in the states where they operate. Moreover, employers should provide actual notice to the employees prior to installation of GPS trackers and put the employee on notice that they have no expectation of privacy in the location of employer-owned vehicles.

4. Employer Liability for Remote Employee Actions

An employer may be liable for injuries to third parties and damage to property caused by a remotely working employee’s negligence. For example, an employer may be liable for a motor vehicle or other accident caused by an employee who is distracted by use of a wireless communication device if use of the device was for business purposes at the time of the accident or if the vehicle is employer-owned, employer-leased, or rented by the employee for business. Thus, it is important to have clearly-established policies forbidding employees from texting and e-mailing while driving and requiring them to operate company vehicles (or personal vehicles on company business) safely and free from the influence of alcohol or drugs. In addition, these policies should require compliance with more restrictive state and local laws that forbid hand-held or all mobile phone use while driving.

Similarly, an employer may be liable for injuries and damages where a third party is injured at a telecommuting employee’s home, making it important to have policies requiring the employee to maintain a safe remote worksite and disclaiming any employer liability for injuries to third parties who may visit the remote worksite.

5. Conclusion

Employers are increasingly considering remote workers to be an excellent option to retain the best workers, improve productivity, minimize overhead, and increase flexibility. However, working remotely is not without its risks. Many legal, policy, and management issues arise as a result of remote working arrangements that must be considered carefully and addressed responsibly.

This article does not constitute legal advice. For advice regarding a particular situation, please contact a qualified lawyer of your choosing.