The Legal Advantages and Disadvantages of Managing a Remote Workforce

Data privacy and cybersecurity lawyers have a name for a common type of breach they handle on behalf of businesses: “Coffeehouse cases,” meaning “it’s something we’ve run into with remote-employee situations,” says James Giszczak, co-chair of the data privacy and cybersecurity group at McDonald Hopkins in Detroit.

“The employee decides to do some work at the coffeehouse. You know, you place your order, sit down, flip open the laptop, log in. It might be an encrypted computer, but you enter the security code and bypass all of the security. Then your order is ready, so you step up to the counter to get your cup of coffee, then come back to the table, and the laptop is gone.”

Now the bad guy has access to everything the employee had access to, including potentially sensitive information that could bring the employer to its knees.

“We’ve had dozens of these coffeehouse cases,” says Giszczak. Overall, his firm has handled thousands of data breaches for its clients, not all of them related to employees working away from the physical office, but enough of them for Giszczak and the firm to stay busy on their clients’ behalf.

The Rise of Remote Work

Data security is just one of many potential problems, both big and small, in managing a remote workforce.

The deskless employee, the remote worker, the telecommuter are all here to stay. The growth of remote work is partly due to trends such as the availability of affordable smartphones and tablets, the increasing use of corporate bring-your-own-device (BYOD) programs, and innovations in mobile technology. The COVID-19 pandemic intensified trends toward remote work in the 2020s.

“In certain jobs and business models, employees may not need to have constant contact with the office or other employees,” says Raanon Gal, an employment and labor lawyer at Barnes & Thornburg in Atlanta. “Technology has made it easier for employees to work remotely.”

Potential Pros and Cons of a Remote Workforce

Employers face both potential advantages and disadvantages when managing workers from afar. The right policies and practices, plus some little enlightened self-interest, can go a long way.

The plusses of remote work may include:

• Increased productivity from fewer interruptions
• Higher employee morale
• Improved new-hire attraction
• Reduced overhead with less spent on brick-and-mortar space, utilities, and parking

Meanwhile, potential pitfalls may include:

• Lower productivity
• Reduced ability to monitor performance
• Lack of face-to-face communication
• Inaccessibility during normal working hours
• Liability for at-home workplace injuries
• Data security and confidentiality concerns

“Some employers have found that offering the telecommuting option is like offering an employee a benefit without additional overhead expense,” says Paul Wilhelm, who litigates employment disputes at Barnes & Thorburg in Grand Rapids, Michigan. “We have found that many newer workers in the workforce value flexibility as much as pay. Offering something like telecommuting is right in line with that trend.”

Connie Cessante, who advises management on employment issues and litigates employment-related claims at Clark Hill in Detroit, adds, “It’s a practical advantage when you permit employees to work remotely. You’re giving them a better opportunity to achieve a work-life balance. In a sense, you’re converting time lost in a commute.”

“We get to hire the best people we can find, regardless of location,” says R. Bates Lovett, an attorney at Pierson Ferdinand in Atlanta and former partner at FisherBroyles, a law firm without a physical location. “We email, we talk on the phone, we text. The only thing we don’t do is sit in front of each other and talk. It’s not that big of a deal for me.”

Have a Telecommuting Policy in Place for Remote Workers

“We recommend to employers with a substantial number of telecommuters that they have a telecommuting policy and agreement in place,” says Cessante.

For one thing, “The employer should have engaged in some dialogue with the workers’ compensation insurer to make sure the employees are covered. Even if they are home-based, workers’ comp complaints are in play.”

Cessante and Wilhelm have a whole list of dos, don’ts, and warnings they issue to clients regarding telecommuting policies:

• Have a statement that offering telecommuting in general is at the discretion of the employer and requires good standing to be eligible
• Clarify that eligibility will be on a case-by-case basis, and the employer may revoke permission at any time
• State that those previously or currently provided the option are not guaranteed approval in the future
• Make clear that employees are still required to follow policies and procedures, maintain performance expectations, and care for provided equipment
• Specify that the employer is not liable for home taxes and insurance, nor non-work-related injuries
• Refer to a telecommuting agreement (in addition to the policy)

Have Clear Wage and Hour Policies and Practices for Remote Workers

Hourly remote workers have presented some difficulty for Lily McNulty’s clients. McNulty, who practices at Greenberg Traurig in Chicago, urges a proactive approach, particularly as the number of compensation class action and collective action filings keeps increasing.

“The risk of wage and hour lawsuits creates substantial potential liability for many companies,” says McNulty, who represents employers in labor matters.

“Employers must pay non-exempt employees for all hours worked, including time away from the job site and at home. Employers with telecommuters should establish a mechanism to track hours worked at home and should consider how the company will monitor employees’ work to keep them accountable, which can be more difficult if the employee works remotely.”

But, she adds, these concerns don’t have to be a downside or prevent employers from offering the telecommuting option. “Having policies in place regarding time-keeping is something all employers should do, especially with a remote workforce,” McNulty says. “And they should revisit those policies periodically.”

Full-Time, Part-Time, and Contractors Distinction

In a gig economy, it also pays to be clear on the difference between independent contractors and actual employees, because the rules differ for each. Recent proposed class action lawsuits have been filed on behalf of workers alleging misclassification. IRS and Department of Labor issues can also arise.

“It’s important that your remote workers are classified properly,” says Julian Fortuna, a tax law attorney at Buchalter in Atlanta. “Misclassification can be really expensive.”

Digital Security Concerns

Data breaches can also present a potentially massive legal and financial nightmare for any employer. “The capacity for harm is huge; it can shut a company down,” says Giszczak, who tries to gird his clients via a three-stage strategy: Inception, term, and conclusion of employment.

The philosophy is: Do everything you can to avoid a data breach and, if you can’t avoid it, be prepared to deal with it. With so many cybervillains at the gate, security issues may be inevitable.

At the outset, Giszczak says companies should have a:

• Telecommuting policy
• Computer usage policy
• Bring-your-own-device (BYOD) policy
• Confidentiality agreement that specifies what information is protected and what employees should or should not be doing with that information

“Companies need to make sure that they’ve got the appropriate legal agreements and that the employees are signing them.”

Continually Train and Remind Employees About Security Risks

“During employment, we want to make sure remote employees are being reminded about how important it is to protect information. We encourage clients to send small reminders, whether it’s an email or a phishing test, because, for most employees, their job isn’t about privacy and security. But we encourage employers to make privacy and security top of mind with all employees, especially telecommuters,” Giszczak says.

“Quite frankly,” he adds, “the vast majority of data breaches are caused by a company’s own employees. And people sometimes have a tendency to be a bit more lax about these things if they’re not in an office environment.”

Provide Remote Workers with Appropriate Devices, Protection, and Training

Giszczak says it’s a good idea to provide remote workers with appropriate devices, device protection, and training on best practices. What good is an encrypted laptop if there’s a Post-it with the password on it?

“We all laugh, but trust me, we’ve had our fair share of talks with people that have had computers stolen from the back seat of their car and, sure enough, the password was taped to it,” Giszczak says. “Sometimes, it’s a good idea for companies to set up a remote worker’s devices so that they can be remotely wiped clean.”

The last stage in Giszczak’s strategy is just as important as the first two. “Access to the company should be terminated,” Giszczak says. “Remember, at the outset there should have been a signed agreement stating that any corporate material should be returned or deleted, so former employees aren’t accessing sensitive data.”

“Data security is and will continue to be a challenge,” Cessante adds. “It could be difficult to ensure that adequate protection is in place, especially with remote workers. But monitoring an employee’s computer activities and establishing appropriate security protections are best practices.”

Remote Work and Reasonable Accommodations

While more companies are allowing telecommuting and some jobs better lend themselves to it, it doesn’t work for every employer.

“If an employee’s disability prevents the employee from working on-site and the employee asks to work from home as a form of an accommodation, the company is required to engage in an interactive process to evaluate if it can provide the employee with such an accommodation,” McNulty says.

“The employer may deny the work-from-home request if alternative accommodations are available or if working from home would create an undue burden on the company.”

Telecommuting as a Reasonable Accommodation

According to a study by McNulty and her colleague Joe Yastrow, of Laner Muchin in Chicago, courts have traditionally not found telecommuting to be a reasonable accommodation. But as working from home becomes increasingly common, the judicial trend is moving toward it, too.

Some employers are choosing to limit or move away from telecommuting “because of perceived operational disadvantages,” says Wilhelm. “There are studies showing that lack of face-to-face interaction results in lower outcomes and productivity, the thought being that, if the situation impairs the quickness by which we communicate with one another, it impacts productivity.”

Find Legal Help

For legal advice on managing a remote or hybrid workforce and meeting the challenges head-on, consult with an employment law attorney using the Super Lawyers directory.