The rules governing the employment relationship are always changing. Laws creating new employer obligations, technology solutions making work more efficient and more complicated, and rules governing the resolution of disputes between employers and their workers are around every corner. Wage and Hour Around the Corner is a new blog series for employers, in-house lawyers, and HR, payroll, and compensation, that helps employers stay on the cutting edge of wage and hour changes happening now and those on the horizon.
Seyfarth Synopsis: The COVID-19 pandemic necessitated a temporary reimagining of workplace dynamics, compelling companies to adapt to new modes of operation. As global conditions have stabilized, businesses now face the task of determining their enduring work model. Whether your organization advocates for remote work, embraces a hybrid approach, or reverts to a conventional office environment, the considerations extend beyond mere logistics. Achieving the optimal balance demands a deliberate integration of legal frameworks, employee engagement, and operational strategies. The journey to finding the right balance requires a thoughtful integration of legal considerations, employee relations, and operational strategies. It involves crafting clear communication channels, establishing robust policies, and engaging in proactive planning. These elements are essential for harmonizing flexibility with legal compliance, achieving cost efficiencies, and nurturing employee morale. In the following discussion, we explore the dynamic landscape of modern workspaces five years post-pandemic and reveal the secrets to thriving in this new era of work.
The COVID-19 pandemic forced a global experiment in remote work, introducing many positions to a work-from-home model for the first time. For some employers, remote work has become a permanent fixture, offering numerous advantages: cost savings on decreased office space, a reduced carbon footprint from less commuting, and enhanced employee productivity and happiness, leading to better work-life balance.
Yet, remote work isn’t a one-size-fits-all solution. Many employers have found that fully or partially remote work presents unique challenges, including diminished in-person communication and collaboration, which can impact morale and productivity.
Whether your business thrives on remote work or continues to face hurdles, there’s no definitive right or wrong approach. Below are some legal considerations to keep in mind.
A. Navigating Contract Claims – “You Promised Me Remote Work.”
As an employer, you might be facing a situation where an employee claims they were promised remote work—either in writing (via an employment contract, offer letter, or another explicit written document) or verbally—and relied on this alleged promise, to their detriment. No law broadly prohibits requiring employees to return to a specific work location or come into the office after a period of remote work, but such contract and quasi-contract claims can be complex because they require an individualized, employee-by-employee assessment.
To begin with, it’s essential to take a thorough look at your employment contracts, email exchanges, and explore any discussions managers and human resources may have had with staff regarding remote work. This analysis is highly fact-specific and varies by employer and each employee. There may be explicit language in your documents that clearly refutes a claim that the company promised employees the permanent ability to work remotely, which can help guide your decision-making. And, generally, at-will employment means employers can dictate the terms of employment, including work location, at its discretion. But that general rule only goes so far.
For example, if your company agreed to remote work in writing but explicitly reserved the right to require employees to return to the office at any point, then confirm whether there is a notice provision that mandates giving employees advanced notice prior to requiring them returning to work. Even if such a provision doesn’t exist, it’s worth considering from an employee-relations perspective. Employees (with their families) may have moved further away from the office to save on rent and need time to re-adjust, so offering a grace period for their return could be beneficial for all involved.
Additionally, there may be accommodation requests from certain employees to consider under the Americans with Disabilities Act or similar state or federal laws. Those accommodations should be thoroughly considered and documented based on their specific facts and the nature of the request. If the company believes that in-office work is an essential job function for a particular role and intends to deny an accommodation request for remote work—especially if the role has been performed remotely for several years or months—it’s important to clearly articulate why the role is not suited for remote work. Identify what aspects are not working and provide a detailed rationale.
B. Pay Implications – Don’t Allow Payroll Nomads, Address Updates Matter
It’s also crucial for companies to have policies in place requiring employees to provide their current home and/or working address, especially if they are working remotely and have moved out-of-state or are moving to a new state to return to the office. Particularly for remote staff, periodically re-circulate the policies and/or ask employees to update or annually affirm their address is correct. This helps ensure compliance with all relevant state laws, and provide notice to employers that they may now be “operating” in states where previously employees were not operating.
For example, if an employee is hourly/non-exempt and must be paid overtime, certain states have overtime requirements that go well beyond the Fair Labor Standards Act (FLSA). Similarly, if an employee is categorized as exempt from overtime under the FLSA, some states have exemption tests or minimum salary requirements that far exceed federal FLSA standards. Regular audits are essential to ensure employees who have moved to different states are paid and categorized appropriately under both the FLSA and state laws.
By maintaining accurate address records and conducting regular compliance audits, companies can navigate the complexities of state-specific wage and hour laws and ensure appropriate pay and treatment of all employees.
C. Space and Equipment Analysis
If your company has been fully remote since the start of the COVID-19 pandemic and is now asking employees to return after five-plus years, it’s time to dust off the office and ensure you have enough space and equipment to accommodate everyone. Consider whether certain staff hired during the pandemic have never reported to an office. What preparations (office or desk assignments, screens and monitors, telephones) need to be made before asking them to return?
For hybrid workers who alternate between remote and in-office work and might share an office space with a colleague who comes in on the days they do not, plan for contingencies to ensure everyone has a seat at the table, even if they are in the office at the same time. Proper planning and organization will help make the transition smoother for everyone involved.
D. Expense Check: Revisiting Reimbursement Policies
If your company is providing office space and asking employees to return, but still allowing remote work as a perk, it’s important to reevaluate reimbursement policies, especially in states with expense reimbursement laws. Confirm whether the company is currently reimbursing employees for home Wi-Fi, personal internet, and other home office expenses. Review whether certain reimbursements can be discontinued now that remote work is solely a perk and not a requirement (in any instance), in accordance with state expense reimbursement laws. In Illinois, for example, expenses incurred that were “necessary” must be reimbursed. Showing an expense is “necessary” is more difficult when an employee chooses to work from home as solely a perk, but could otherwise report to an office, and does not work afterhours or on weekends on a remote basis. California law, by contrast, may require reimbursement for reasonably incurred expenses, even when the employee chooses to work from home, and even when such expenses would have been incurred even if the employee did not work remotely. This includes use of their personal cell phone or their home WiFi.
E. Every Minute Counts: Tracking Hours for Remote Employees
Working from home creates numerous opportunities for employees to work without the employer’s knowledge. Increased productivity is wonderful, but particularly for non-exempt employees, it is crucial that company policies ensure employees are compensated at their applicable regular or overtime rate for all hours worked. It’s important to make clear in your policy that employees must notify their employer of all working time, so the company has knowledge of the hours worked. Even if the company does not technically have knowledge, knowledge can be imputed in certain instances (meaning the company should have known and thus is treated as if it knew the employee was working).
One way to address this concern is by permitting employees to self-report their time worked each day, starting with the time they begin and end work, but excluding any non-working time. Employers can also require employees to attest with each time submission that they have reported all of their hours worked. If any employee repeatedly works without tracking their hours worked and the employer becomes aware of the same it must compensate the employee, but it may also be appropriate to issue discipline for such a policy violation. These measures can help combat a claim that the employee did not know they had an obligation to report all hours worked.
F. Managing Flexible Work Arrangements
The continuous workday concept under the FLSA provides, aside from meal periods, all time from the first activity of the day to the last activity of the day is compensable, including breaks. This rule became confusing during the COVID-19 pandemic and beyond, as companies allowed and continue to allow employees more flexibility to set their work hours. For instance, instead of working 9:00 a.m. to 5:00 p.m. with a 30-minute lunch break, an employee might work 9:00 a.m. to 1:00 p.m., go to the gym from 1:00 p.m. to 2:00 p.m., pick up their child from school and eat lunch from 2:30 p.m. to 3:00 p.m., and log back in from 3:00 p.m. to 6:30 p.m.
Such flexibility enables employees to feel in control of their life and time and offers numerous benefits, from increased productivity to improved mental health and higher retention rates. However, is all such time compensable under the continuous workday rule? The short answer is no—a company need not pay an employee for time during their workday when they engage in purely personal pursuits such as childcare or working out. To ensure lines are not blurred, however, having a general mapped-out workday, even a non-traditional one, that is specific to a particular employee, can help ensure employees are working the requisite hours and tracking them accurately.
This is also crucial to ensure employees take their meal breaks at the appropriate times, as required by applicable state laws. For instance, some states mandate meal breaks after a certain number of hours worked. Additionally, if an employee voluntarily works through their meal break on a particular day, the company must comply with any state laws that require the meal or break period to be compensable if missed or not provided. By staying informed about state-specific regulations and implementing clear policies with parameters surrounding the same, companies can ensure compliance and fair treatment of employees.
Conclusion: Crafting a Successful Remote Work or In-Office Strategy
Whether your company opts for fully remote work, a hybrid model, or a full return to the office, it’s essential to consider the legal implications and employee relations, in addition to the impact on the business and its operations. Thoroughly review employment contracts, where employees are working, reimbursement, and time tracking policies to ensure compliance with state and federal laws. Proper planning and clear communication can help navigate the complexities of remote work arrangements, maintain employee morale, and ensure fair treatment for all staff members. By staying informed and proactive, companies can create a work environment that balances flexibility with legal and operational requirements.
