Telecommuting employees are a fact of life for many businesses today. But you need to know the regulatory requirements and potential liabilities that go along with employees who work from remote locations.

First of all, make sure you have a formal company policy governing work-from-home employees, such as who is eligible to work from home under what circumstances. Be sure that eligibility criteria doesn’t allow for accusations of discrimination. Having objective criteria can deter a claim of discrimination if you refuse to allow an employee to telecommute.

In addition, it’s a good idea to summarize the telecommuting process in writing and have the employee sign off on the process. Set out employer expectations, including the number of hours to be worked each day or week and how they will be recorded, how to preserve confidential information, ownership of equipment and content, reporting structures, and how work product and hours will be monitored.

remote worker

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Set out obligations for attending on-site meetings (or attending electronically). Ideally, the document should also reserve the right to pull the employee back into the office if necessary.

Here are some specifics employers should consider when it comes to remote workers:

Privacy and confidentiality

Employers should protect company information by having employees sign a nondisclosure agreement. In turn, employees should be aware of their privacy rights. The employee’s work isn’t private; the employer has the right to retrieve files from telecommuters. And even if the employee is using a home computer, it can be monitored or inspected by the employer.

Electronic security

Remote workers need secure access to company information, including using encryption, passwords, and network firewalls. As the employer, you may want employees to operate from a secure service or use a virtual private network. Or you might mandate the use of employer-provided equipment. Consider Hillary Clinton’s use of a personal e-mail account and private server when she was Secretary of State.

Restrict use of company-provided devices to the employee only. If you allow dual-use devices such as personal cell phones or laptops, get consent to access the employee’s work-related emails or cloud-based data. Otherwise you might violate the Computer Fraud Abuse Act. You may require telecommuters to use locked filing cabinets and desks, and regularly change electronic passwords.

Workplace injuries

The Occupational Health and Safety Administration doesn’t hold employers responsible for the safety of home offices and doesn’t inspect home offices. However, remote workers are still covered by worker’s compensation laws. Employers need to confirm coverage and have reporting and investigation procedures in place in case an accident occurs.

Evaluating a claim can be tricky because it’s tough to tell whether a virtual worker’s injury is work-related. For example, what if a worker trips on the stairs at 11 p.m. on his way to the office to type a business email? A company could avoid that by limiting work hours to normal business hours. Some companies even make telecommuting employees sign an agreement to keep children, family members, and pets out of their workspace.

Virtual employees aren’t always working out of an office. They might be commuting regularly throughout the workday or may not have a fixed place of employment. In that case, injuries sustained during a commute could be the employer’s responsibility.


Does your policy allow disabled employees who need accommodation to work from home? Or does it restrict telecommuting to a certain class of employees, such as women or millennials?

Work hours, meal breaks, rest periods and overtime

Employers should develop and implement legally compliant policies and explain them to teleworkers. It’s also a good idea to oversee employee schedules and audit time-keeping records as a proactive way to identify potential issues. Use a time-tracking program they must log into while working to assure that employees record their hours accurately, .


Avoid classifying virtual workers as contractors. You don’t want to be audited for nonpayment of taxes or sued for unpaid wages.

Access to posters

Telecommuters need access to relevant federal and state workplace posters. If you have an intranet, you can post them there as well as in your physical facilities. Notify telecommuters and provide links to the intranet site whenever the posters are updated. If you don’t have an intranet or a place on the site for posters, you can periodically e-mail, mail or fax the posters directly to telecommuters.


If a virtual employee works in another state, you might have to brush up on the appropriate labor laws in that state. Remote employees are subject to the laws of the state in which they work, not the company’s home state. That could apply to payroll taxes, for example. Having an employee in another state also could establish a physical presence for your company in that state, opening up registration and corporate tax issues. Contact the California Tax Service Center at 800-829-1040 or an employment lawyer to find out about reciprocity agreements for a particular state.

Telecommuting is not leave time

If an employee is eligible for leave under the Family and Medical Leave Act, he or she must be relieved of all work—telecommuting does not count as leave.

Despite these risks, telecommuting is a reality for many companies. Cisco reported in 2009 that many telecommuting employees had higher productivity and improved work quality because they appreciate the option and have greater job satisfaction. It also improved employee retention levels, and one Brigham Young study showed that telecommuting could lead to longer work weeks by employees.