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June 24, 2022 | BusinessCovid-19EmploymentFrom the blog

Remote Work Decisions Ahead for Employers

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Author(s)
Ellie Sanders

Associate Attorney

As concerns about COVID-19 and variants have lessened, some companies are asking employees to return to work in the office.  In many cases companies are allowing hybrid work arrangements in which employees spend 2-3 days in the office and the rest of the week working remotely.  This is being fueled in part by the fact that employees have reported that they want to work from home at least part of the time.  Significant legal challenges arise between employers and employees in the remote work context.  Because of competition for employees, employers may be forced to develop remote work policies and address employment law issues so they can attract and retain talent.

Pre-Pandemic Remote Work Policies

A global survey from 2018 found that 70% of respondents worked remotely at least one day per week.  An Indeed.com survey that same year found that in the U.S., 37% of employee respondents worked for a company with a remote-work policy.  Even pre-COVID-19 pandemic, 47% of employees said that whether a company allowed remote work was an important factor in choosing a job.

Among employers, 55% of respondents to the Indeed.com survey said they had a remote-work policy.  Notably, 72% of companies with remote-work policies said they made workers more productive and 22% said they were equally as productive.  Further, many reported that working from home improved employee morale, reduced turnover and absenteeism and saved on operational costs.

Remote Work During the Pandemic

According to Gallup, 45% of full-time U.S. employees and 79% of white-collar workers worked partly or fully remotely in September 2020.  By May 2021, 91% of employees reported wanting to maintain remote work to some degree.  Employees also reported their preference for a remote work policy is hybrid, allowing them to split time between working from home and the office.

The Future of Remote Work

Employees still report that they want the option to work from home.  The Gallup findings show 49% of employees reported that if they lost the option to work remotely, they would be extremely likely or more than likely to leave that company.  Clearly, employers must consider this policy or risk losing talent.

Legal Implications of Remote Work

Remote work can raise significant legal concerns for employers and employees alike.  These include:

  • Employment laws. When employees work remotely from a different state than their company’s headquarters, those companies must comply with the employment laws of the employee’s state.  That may mean the employer must make changes such as increasing an employee’s compensation if the employee’s state has higher minimum wage and overtime requirements.  The employee’s state may also have more generous family, medical, pregnancy and COVID leave laws which the employer must now provide.  Both parties may also have other rights and obligations that differ depending on the employee’s state and city.
  • Tax laws. Employees working in other states may create a new tax nexus for the employer, which could make it necessary for the business to register in that other state and collect sales tax from customers.
  • Discrimination and reasonable accommodations. Employers cannot require protected groups, such as older, disabled or pregnant employees, to work remotely.  This would be a violation of the Age Discrimination in Employment Act (ADEA), Title VII of the Civil Rights Act, the Pregnancy Discrimination Act and/or the Americans with Disabilities Act (ADA) and potentially the state and city laws where the employee resides.  Still, employers may be obligated to allow qualified individuals to work remotely as a reasonable accommodation where they fall under the ADA or age discrimination policies.  Before the pandemic, courts seldom required employers to provide a remote work option but that may change because so many employers successfully adapted to this model during the pandemic.

Next Steps

Employers should understand the pros and cons of remote work, including the range of hybrid options popular with employees, and seek legal advice to develop a policy that complies with all relevant laws.  Employees should also understand their rights and consult an attorney if they believe that their employer is violating the law.

Photo by Brooke Cagle on Unsplash
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