Workers' Compensation and Telecommuting

Although telecommuting is not a new phenomenon, it has certainly gained traction since the turn of the century. According to the American Community Survey, which is conducted annually by the U.S. Census Bureau, the employee work-at-home, or WAH, population grew 61% from 2005 to 2009. Though the past few years have shown a small decline, which is generally attributed to a decline in the overall labor market, the outlook suggests significant growth over the next five years.

A report prepared by the Telework Research Network identifies various factors that will fuel the projected increase in telecommuting in the coming years, such as:

Forty-five percent of the U.S. workforce has a job that can be performed, at least partially, by telecommuting;
Improving communications and collaboration technologies;
Improved and expanded high-speed broadband internet access and the proliferation of web-based applications;
Increasing sophistication in managing and working with distributed (distance) workers;
Continued pressures on employers to reduce overhead costs, including office space, management, and operations;
Escalating fuel prices and increasing pressure on employers to reduce their carbon footprint; and
Continued emphasis on cost containment and bottom-line performance.

Despite the many benefits, telecommuting does create unique risks, some of which can be significant. What many employers fail to realize, or adequately consider, is that a telecommuting employee’s home will generally be considered that employee’s workplace.

The consequence of this distinction is that many employment-related laws follow a telecommuting employee home. Since a telecommuting employee is still an employee, employers must ensure compliance with all applicable laws governing their entire workforce, including those who telecommute, and each employment-related law presents its own unique challenges.

Consider the Fair Labor Standards Act (FLSA), for example, which is the federal law governing minimum wage and overtime compensation. Since an employee covered by the FLSA does not forfeit his or her rights merely by telecommuting, employers must be prepared to control the manner in which telecommuters perform their work to prevent wage and hour violations.

How, for example, does an employer monitor the number of hours worked, keep track of start- and stop-times, prevent unauthorized overtime, or prevent employees from working off the clock? The number of wage and hour claims filed annually reflects that these tasks pose a challenge for employers dealing with their traditional employees. Needless to say, ensuring FLSA compliance with telecommuting employees can prove even more challenging.

In addition to the FLSA, employers must ensure compliance with various other laws, such as the Americans with Disabilities Act, the Family and Medical Leave Act, and Title VII of the Civil Rights Act. However, one of the more challenging legal obstacles facing those who employ telecommuters involves workers’ compensation.

Workers’ compensation generally provides benefits to employees who have suffered an accidental compensable injury or death arising out of work performed in the course and scope of employment. Despite some statutory variations among the states, an employee who suffers an accidental workplace illness or injury will typically be entitled to workers’ compensation benefits.

This general rule also applies to those employees who telecommute. However, telecommuters create a unique challenge because they are working at home without direct supervision or observation. Consider how difficult it would be for an employer to determine whether a filing cabinet drawer broke an employee’s hand when the employee was filing documents, or whether that same hand was caught in the drier while the employee was doing a load of laundry between work-related telephone tasks.

If a lack of supervision or witnesses makes it difficult, or impossible, to conclusively establish the cause of a workplace injury, then an employer may be unable to detect and defend against false or fraudulent workers’ compensation claims. When dealing with workers’ compensation matters involving telecommuting employees, the vulnerability to fraudulent claims may be the biggest risk faced by employers.

Since it is impossible to prevent all work-related injuries, employers must decrease the likelihood that a telecommuting employee will file a false or fraudulent workers’ compensation claim by eliminating the opportunity to do so. This is typically accomplished by implementing policies and procedures designed to control an employee’s workday in a manner designed to decrease the likelihood of fraud.

Since these policies and procedures must be tailored to accommodate an employer’s specific needs and resources, creating a one-size-fits-all approach is not an option. Nevertheless, those employers currently employing telecommuters, or those who may do so in the future, should consider the following suggestions.

Understand that the applicability of employment-related laws does not change merely because an employee telecommutes. Accordingly, it is necessary to consider each laws requirements, how those requirements are controlled and managed for traditional employees, and how to best go about controlling those requirements for telecommuting employees.
Understand that not all positions or jobs can be accomplished by a telecommuting employee. Appropriate positions generally involve mainly electronic documents, telephone communication, and minimal supervision.
Establish policies and procedures, possibly even a customized employee handbook or agreement that is specifically tailored for telecommuting employees. Given the different dynamics and risks, traditional policies or procedures may not be sufficient to deal with telecommuting employees.
Require telecommuting employees to immediately report any injury or illness they consider work related. Any failures to abide by this policy should raise a red flag. For example, if an employee is unable to reach his or her supervisor to report an injury because the office was closed, this fact could make it easier for an employer to establish that the injury did not arise out of work because it occurred after-hours.
Establish a fixed schedule for work, meals, and breaks. If an injury occurs when the employee was not supposed to be working, it makes it more difficult for an employee to claim the incident was related to work. Various techniques, such as computer/network logins, telephone use monitoring, and video devices, can be used to track an employee’s adherence to schedules.
Provide the necessary training for telecommuting employees to reduce the likelihood of a work-related incident. The training should be tailored to each employee’s specific job functions. Generalized training in ergonomics, back safety, etc. should also be considered.
Confirm that the telecommuting employee has a separate work area to help define, and determine, when the employee is working or “on the job.”
Perform an inspection of the employee’s work area to ensure maximum safety and to deter or eliminate clutter or hazards that are not related to work.
Provide telecommuting employees with the proper equipment to perform their work safely and efficiently. This equipment may include computers, furniture, tools, electronic devices, extension cords, fire extinguishers, smoke detectors, etc.
Develop policies or guidelines regarding the manner and extent to which the telecommuting employee must communicate with his or her supervisor or manager.
Be cautious of letting new or inexperienced employees telecommute.
Be selective when deciding which employees should be permitted to telecommute. Only those employees who have a history of good judgment, responsibility, dedication, motivation, organizational ability, discipline, loyalty, and productivity should be authorized to telecommute.
Employers electing to make telecommuting a part of their organizational profile will likely enjoy numerous benefits. However, for those employers who fail to appreciate the significance of their decision, these benefits may quickly be negated by the risks that accompany an employment relationship that physically separates the employer from the employee.
Since it is likely that the risks associated with a telecommuting workforce will be greater than those associated with a traditional workforce, shouldn’t the employer’s efforts to control those risks be greater too?
If you would like to receive a sample Telecommuting Agreement, please contact us.