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The legal grounds of telecomuting

Updated on March 8, 2015

Executive summary

Telecommuting is a new employment concept that has been beneficial to both employers and employees. Because the concept is new to the labor markets, it has been imposing major challenges to employers. More often, firms that employ telecommuters have been unable to comply with federal laws of employment. The unique nature of the concept of telecommuting has repeatedly cost many employers lump sum amounts of money as they pay for fines and other liabilities incurred if they fail to comply with the federal laws of employment. Many are the times when complying with such laws seemed impractical for the firms that employ telecommuters. Therefore, this paper aims at analysing the impact of federal employment laws on both employers and telecommuters. Additionally, the paper analyses various strategies that employers can adopt in order to comply with federal employment laws while their firms maintain profitability.

Descriptive summary

Telecommuting is an employment concept whereby employees are allowed to work at home or their designated locations via remote connections. Employees have the liberty to work while in coffee stores, restaurants, libraries and other areas of their interest. Rather than travelling to offices or to their company’s place of work, employees keep in touch with their employers through emails, telephone calls and even collaborative platforms, Skype being one of them. Employers and employees who are not willing to attend board meetings participate in them through teleconferencing. In teleconferencing, meetings are held virtually through computers that are connected to the internet.

Telecommuting has so far proved its significance when adopted by both big and medium corporations. For example, Khosrowpour (1996) noted that the benefits of telecommuting among employers and employees included reduced overhead costs because employees do not need offices. There is also increased productivity and improved work quality. Similarly, telecommuting led to reduced employee distraction and amplified loyalty because of the work freedom they enjoy (Reilly, Sirgy & Gorman, 2012). Similarly, employee’s job satisfaction and motivation increases. Managers also have a larger pool of employees. They have a large pool of employees because employee recruitment is no longer limited to geographical locations. Employers can recruit employees from all over the world through the internet. Finally, when managers incorporate telecommuting options in their firms, they always acquire more time to plan and organize because they tend to have fewer managerial responsibilities over their employees (Reilly, Sirgy & Gorman, 2012).

However, as the benefits of telecommuting increase on daily basis, corporations encounter different challenges of telecommuting. Most of the organizations that have adopted telecommuting find it extremely difficult to comply with federal employment laws. Although following such laws is mandatory, many employers lack the skill and capacity to comply with such laws because of the technicality of such laws in relevance to telecommuting. Some of the federal laws of employment that firms have to comply with include the Family Medical Leave Act (FMLA), Fair Labour Standards Act (FLSA), Americans with Disabilities Act (ADA), and States Income tax (Ford, Notestine & Hill, 2000). Employers must also comply with the Occupational Health and Safety Act (OSHA).

Legal issues related to telecommuting

The Fair Labor Standard Act

Enacted in1939, the Fair Labour Standards Act aims at establishing the standards of child labor, employee’s minimum wage, proper keeping of records and determining the overtime pay that employees should get if they work on overtime hours (Lasowski, 2009). However, there are different classes of employees who are exempted from the FLSA overtime pay standards and others who are not exempted from such standards. For example, professional employees, executive officers and organization’s administrators are exempted from overtime wage requirements. However, employees who are paid on hourly wage basis are, non-exempt, included in such overtime pay requirements.

Because the FLSA requires employers to keep records of all their non-exempt employee’s working hours and properly record them, following such laws is almost impractical for organizations that employ telecommuters (Goluboff, 2001). It is very difficult to track telecommuter’s hours of work while keeping proper records of work.

Americans with Disabilities Acts

According to ADA, employees and employers should not discriminate against individuals with mental or physical limitations (Gold, 2010). They are supposed to accommodate individuals having the known mental and physical limitations as long as the accommodation does not weaken the institution’s operations. In cases where the accommodation of individuals with mental or physical limitations cripples the institution’s daily operation, the employers are granted the freedom of deciding whether to risk employing them or turning them down. Conversely, the Equal Employment Opportunity Commission (EEOC) has made such an accommodation as mandatory (Gold, 2010). According to the EEOC, employers must accommodate such individuals and place them in a telecommuting program. In addition, several Circuit Courts of Appeal in US have repeatedly allowed telecommuting to be viewed as a mandatory way of accommodating people with mental and physical limitations. Based on such arguments, chances are that the ADA may be inclined to make such accommodations as mandatory in all employment avenues. Implementing such laws may hinder the growth of many organizations because not all jobs can be done via telecommuting (Gold, 2010). Therefore, there is an urgent need for organizations to be prepared on how to adopt telecommuting without affecting the organization’s operations.

Family Medical Leave Act

According to the FMLA, employment institutions must offer their employees with three months secure medical leave based on qualified reasons. They are supposed to be granted such time to either take care of serious health related issues such as childbirth, child adoption or any other serious health related issue (Piskurich, 1998). However, there is controversy on whether such leaves should be granted to telecommuters or not (Goluboff, 2001). Because telecommuters are known to work from their homes more often, employers do not know whether to obey the Family Medical Act or not. However, failing to comply with such a law may cost the employers much money if they are caught.

Occupational Safety and Health Act

The Occupational Health and Safety Act established in 1970 works in conjunction with the Department of Labour to guarantee employees security (Amigoni & Gurvis, 2009). However, the US department of Labour does not hold employers reliable for their employee’s home office safety. They do not expect employers to inspect their employer’s home offices for proper work safety measures. Similarly, OSHA fails to hold employers liable for their employee’s safety requirements at home (Goluboff, 2001). However, both OSHA and the Department of Labour will enforce all other OSHA employment requirements on all employees, including telecommuters. This enforcement includes making employers responsible for all the work hazards caused by the equipments and materials that telecommuters use while working at home. OSHA and the Department of Labor might force the same employers to track and keep records of injuries and other work related hazards that occur when telecommuters are working at their home offices (Amigoni & Gurvis, 2009).

Worker’s Compensation laws

Worker’s compensation laws dictate that employers must compensate all their employees for all the injuries that occur while at work (Martin, 1992). However, many workers’ compensation laws fail to distinguish whether the workers were injured while working on an authorised working site or while working on other unauthorised sites. Such complications imply that the workers’ compensation laws fail to distinguish between whether the injury occurred on work related activities or employee’s personal activities (Martin, 1992). Therefore, there is a need for further clarifications on workers’ compensation laws on telecommuters in order to avoid reoccurring disputes on the same issue. The issue needs further clarification because telecommuting is completely different from the traditional methods of work. Its nature makes it impossible to determine whether the injuries that call for employees’ compensation occurred while on work or while on personal activities.

State Income Taxes

It is a fundamental necessity that all workers must pay tax to their states based on their monthly income (Martin, 1992). Telecommuters are not exempted from these state income taxes. Many are the times when telecommuters bear the risk of double taxing. They risk being double taxed because their employers in foreign countries may be taxed for their employee’s state income tax. Telecommuting employees may be also taxed by their domestic states. Therefore, telecommuters risk double taxation before they receive their incomes in accordance to the States Income Tax laws (Martin, 1992). Consequently, double taxing telecommuters may distress and destroy the morale of telecommuters.

Solutions and recommendations

In the previous discussions, it has been affirmed that the adoption and compliance of different federal employment laws may cripple or pose major challenges to telecommuters and their employment firms. Therefore, there is an imperative need for organizations to draft and come up with solid rules and procedures that govern the compliance of federal employment laws by telecommuters. Below are some of the solutions and recommendations that organizations may employ in order to comply with the federal employment laws.

Employment firms find it difficult to track and maintain records of their employees’ hourly work. In order to comply with the Federal Labor Standards Act for both exempt and non-exempt employees, employers must adopt special softwares that track their employees’ electronic gadgets, indicating the time they log in and log out of their electronic gadgets used for work. Additionally, firms can draft a strong organization’s policy that requires telecommuters to submit their daily timesheets for proper record keeping (Renckly & Renckly, 2004). Maintaining a proper record of the employee’s number of worked hours would help employers in complying with FLSA. It shall also help them avoid the liability of fines paid when employers fail to comply with such laws. Employers should also prohibit their telecommuters from working overtime unless when they have clear written approvals from their managers (Renckly & Renckly, 2004). Alternatively, firms that employ telecommuters can avoid the burden of complying with the FLSA on overtime hours by making their non-exempt employees unauthorised to telecommute (Renckly & Renckly, 2004). This is because non-exempt employees are not covered in FLSA in terms of overtime hours worked.

Solving the problem of how firms should comply with the Family Medical Leave Act (FMLA) is easy but quite tricky. However, organizations are mandated to grant their telecommuting workers a medical leave as required by the law (Piskurich, 1998). They should train their managers not to request telecommuters to attend on any work related roles while they are on their medical leave.

The American with Disabilities Act is on the verge of forcing firms to employ qualified individual with ‘physical or mental limitations’ as a form of ‘accommodation.’ Therefore, employers who use telecommuting as a form of accommodation in compliance with the ADA must provide their physical limited employees with all the requirements of accommodation. They must provide their telecommuting employees with personalized occupational schedules and the necessary equipment required to complete their required task.

Firms that employ telecommuters can reduce the liability of OSHA compliance by exercising specific measures to ensure that their employees’ home worksites comply with OSHA. For example, firms should draft strong agreements and policies that require telecommuter’s home offices to have proper ventilation systems, correct furniture and proper lighting. The same policies should stipulate the proper areas of work in order for the employers to compensate their employees for all work related injuries that may occur at the place of work (Amigoni & Gurvis, 2009). In addition, the firm’s telecommuting policies must give employers’ rights to inspect their employees’ home offices to ensure that the standards of OSHA are followed.

Additionally, firms must provide their telecommuting employees with several written materials in order to comply with OSHA. Such written materials include copies of OSHA compliance posters, safety checklists that comply with OSHA for home offices and writing forms in order to report hazardous conditions present in home offices. Additionally, employers must provide their employees with clearly written directives on how to install and operate equipments related to the tasks given to them (Amigoni & Gurvis, 2009). Employment firms should also train their telecommuting workers on workplace safety in their remote worksites. Alternatively, they can fund for their employees training workshops on the same issue.

Disputes of work compensation in compliance with compensation laws tend to arise frequently in telecommuting firms. Such disputes arise because it is difficult to differentiate whether the telecommuting worker sustained injuries while on work related activities or while attending to personal issues. However, firms can avoid such disputes by drafting a telecommuting agreement that defines the activities constituting telecommuting work, the exact number and specific hours of work, designated areas of work in the home offices and resting periods (Hansen, 1999). The telecommuting agreement should also define safety maintenance of home offices where telecommuters work. In addition, the agreement should define how telecommuters should handle third parties (Goluboff, 2001). The last part of the telecommuting agreement is very important because it defines what should happen in terms of compensation when a third party sustains an injury or any other work related hazard upon visiting telecommuting employees in their home worksites (Hansen, 1999).

Because double taxation affects the efficacy of telecommuting, employers request their domestic States to enact a Telecommuter Fairness Act (Verbeke, Schulz, Greidanus & Hambley, 2008). This Act would protect them from double taxation. Alternatively, both telecommuters and their employers can push their State governments to exempt them from tax because they pay it in their employer’s foreign countries (Verbeke, Schulz, Greidanus & Hambley, 2008). However, the aforementioned approach might be disadvantageous to the employees if their employers’ States have relatively higher taxes than the employees’ States.

In conclusion, it is mandatory that all employers must comply with the federal employment laws. Complying with such laws might be extremely difficult for telecommuting firms because some of the employment laws seem impractical on telecommuting. They are impractical because they affect the efficacy of telecommuting firms. However, firms that employ telecommuters can solve this challenge by drafting comprehensive telecommuting agreements and policies to be followed by their telecommuting employees. When such policies are strictly adhered, firms find it easy to comply with the federal employment laws.

Reference list

Amigoni, M., & Gurvis, S. (2009). Managing the Telecommuting Employee: Set Goals, Monitor Progress, and Maximize Profit and Productivity. New York: Adams Media.

Ford, K., Notestine, K., & Hill, R. (2000). Fundamentals of Employment Law. Chicago: American Bar Association.

Gold, S. (2010). American with Disabilities Act. Singapore: Marshall Cavendish.

Goluboff, N. (2001). The law of Telecommuting. London: Ali-Aba publishers.

Hansen, E. (1999). State of Minnesota Telecommuting Program. Collingdale: Diane Publishing.

Khosrowpour, M. (1996). Information technology management and organizational innovations: Proceedings of the 1996 information resources management association international conference, Washington, Part 3. Hershey: Idea Group Inc.

Lasowski, A. (2009). Fair Labor Standards Act: Better Use of Available Resources and Consistent Reporting Could Improve Compliance: Congressional Testimony. Collingdale: Diane Publishing.

Martin, P. (1992). Telecommuting: The Ride of the Future. Collingdale: Diane Publishing.

Piskurich, G. (1998). An Organizational Guide to Telecommuting: Setting Up and Running a Successful Telecommuter Program. Alexandria: American Society for Training and Development.

Reilly, N., Sirgy, M., & Gorman, A. (2012). Work and Quality of Life: Ethical Practices in Organizations. Heidelberg: Springer.

Renckly, R., & Renckly, R. (2004). Human Resources. Hauppauge: Barron's Educational Series.

Verbeke, A., Schulz, R., Greidanus, N., & Hambley, R. (2008). Growing the Virtual Workplace: The Integrative Value Proposition for Telework. Northampton: Edward Elgar Publishing.


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