Hybrid Workforce Requires Companies to Consider Possible Legal Issues

At the end of September, an estimated 45% of full-time U.S. employees worked remotely from home, according to a recent Gallup poll. This figure remains unchanged from the remote working rate posted at the end of August, signaling that many employers are putting return-to-office plans on hold. Most notably, the study reveals that out of the 91% of U.S. workers who hope to continue to work from home even after the pandemic, 54% said they would prefer a hybrid arrangement, splitting their time between the office and home. In fact, 61% of remote workers surveyed said they hope to remain working in a type of hybrid arrangement well beyond the end of 2022.

The legalities of hybrid work arrangements

The one commonality that all hybrid work arrangements have is that they allow an employee to split his or her work time between home and the office on an agreed-upon basis. Beyond that, hybrid work arrangements are likely to vary. As a result, it is important for employers with hybrid work arrangements to be cognizant of the possible legal implications that can impact employees’ terms and conditions of employment, as well as workplace policies and procedures.[1] According to the law firm Akin Gump, the following are a few of the key legal issues that employers should consider when establishing a hybrid work arrangement.

Discrimination risks. Even in a hybrid work arrangement, federal, state and local discrimination laws remain in effect. This means that employers must ensure that all hybrid work policies and decisions are not discriminatory on the grounds of a particular protected characteristic (e.g., age, disability, national origin, etc.).

Monitoring employee communications. Monitoring a remote employee’s work email is generally permitted, provided there is a valid business purpose for doing so and the monitoring is consistent with the company’s established policies.

Tracking work hours. All off-site nonexempt employees must accurately record their work hours and are required to be paid for all time worked at home — including overtime. Time worked includes responding to phone calls and emails, regardless of the time of day. An employer may restrict at-home employees from working overtime but must pay employees for all overtime worked. Nonexempt employees are required to be paid only for time worked.

Taxes. According to Bloomberg Law, taxes can be a tricky situation if an employee splits time between working from an office located in one state and working from home in another state. For example, to which state does the employee owe income taxes and for which state(s) should the employer withhold state income taxes? In addition, to which state should workers’ compensation withholdings be paid? Depending on a company’s entity level, businesses may have to pay taxes in any state in which they do business.

Expense reimbursement. When it isn’t possible to supply employees with the equipment they need to conduct business when working remotely, employers should evaluate the personal tools and equipment used by an employee to determine whether and to what extent reimbursement for associated expenses may be necessary. In some states, such as California, workers may be entitled to a pro-rata portion of their internet or mobile phone bill when working from home.

Break and mealtimes. Employees working remotely have the right to take off-duty meals and rest breaks during which they do not have to respond to emails and calls. Laws can differ from state to state, so employers should understand requirements regarding meals and breaks in their state.

Workplace health and safety. All Occupational Safety and Health Act and state safety and health laws require that employers provide a hazard-free workplace for employees — even when they are working from home. This can include a review of a home office and associated equipment to ensure safety. At all times, it remains the employer’s duty to consult with and assist employees with health and safety matters – including those related to COVID-19. 

In addition, the experts at The People Profession recommend employers do the following when establishing a hybrid work program:

  • Review and update all HR policies.
  • Determine how workers are to be managed and supervised.
  • Update employment contracts with new contractual clauses.
  • Review/update company liability insurance policies.
  • Identify how confidential company, employee and client information will be kept secure — on and off-premises.
  • Identifying any employee tax implications, such as expenses incurred while working at home or for computer equipment provided.

Conclusion

Hybrid working is here to stay. As an insurance professional, your employer clients will be looking to you to help them ensure that their policy coverages, including workers’ compensation and general liability, will apply to employees working exclusively from home or in a hybrid work arrangement. In fact, now is a great time to conduct a policy review as we move into the new year.

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Need to complete your insurance continuing education credits before the end of the year? FastrackCE can help you get all your life and health and property and casualty continuing education credits in one place and at your convenience. We offer online courses in most states, covering a broad range of topics, including most of the state-mandated courses such as ethics, flood, long-term care and annuity training.


[1] Worknest.com.

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