The Legal Pitfalls of Hybrid and Remote Work

In response to employee demands, many employers are expanding remote work options implemented during the pandemic on a more permanent basis. However, as companies focus on retaining and attracting talent in this competitive labor market, they should be thoughtful of the legal risks they may be creating and how to navigate these risks. 

Wage and Hour Issues

The Fair Labor Standards Act requires that overtime eligible, or “non-exempt,” employees’ time worked is accurately and contemporaneously tracked. When people work remotely, it is important that they understand their role in timekeeping and are provided a single, universal methodology for recording their time. Long gone are the days of physical punch clocks, so employers must provide appropriate tools and training to ensure compliance with the FLSA and state wage and hour laws. 

Employers should require non-exempt employees to record and report their time worked each day. This should be accomplished through a single timekeeping mechanism that is available both while in the office and when working remotely. 

Additionally, employers should provide training to ensure employees understand how to use the timekeeping tool, and should review their policies to ensure that they make explicit that workers are responsible for entering their time accurately on a daily basis. These policies can make clear that not only is accurate timekeeping a requirement; it is also essential to ensuring employees are paid properly for their work.  

When employees relocate to new jurisdictions, even on a hybrid basis, employers must review applicable wage and hour laws and adapt their processes accordingly. For example, some states require overtime to be calculated on a daily basis or provide different rates of pay for overtime worked. This may require technical changes to the timekeeping tool and also more specific training for employees who work in multiple locations. 

Further, an employer may even be required to change its payroll methods, since, for example, while some states permit monthly wage payments for exempt employees, others require employees to be paid at least semi-monthly.

Expense Reimbursement

As employees begin to utilize their homes for work, some have expected support for the expenses associated with maintaining a home office. Existing laws on expense reimbursement differ from state to state, but none were created in contemplation of remote work, particularly at this scale. This can create uncertainty for employers about which expenses are reimbursable, and how much employers are responsible for reimbursing. 

Some employers may have provided one-time stipends to assist employees in setting up home offices at the outset of the pandemic, but this approach does not address continuing expenses including internet connectivity and supplies. Many of the homes that have turned into home workspaces were equipped with high-speed internet before the pandemic, which has caused employers to question whether they are now responsible for assuming these costs. 

In addition, how an employer manages expense reimbursement can have tax implications. Finally, any expense reimbursement policy should separately reference the availability of special equipment as an accommodation for a disability.

Other Employment Law Implications

Aside from logistical concerns about wage payment and expense reimbursement, employers should be mindful that employment laws are different from state to state, and even in many cases from city to city. 

When employees work remotely in a new state, an employer may become subject to rules around wage notices, notice posting, sick time, paid family leave, and more. Furthermore, a restrictive covenant such as a noncompete may no longer be enforceable. Finally, employers may become required to provide harassment avoidance training, or to include pay ranges or disclaimers about hiring individuals with criminal histories in their job postings.