Telecommuting and telework allow employees to work part or all of their standard workweek from a remote location. The concept of a remote workforce has evolved from a convenience to a business necessity.

Proven advantages of telework for employers are reduced costs for work space, utilities, and other overhead; lower absenteeism; elimination of weather-based closures; increased productivity, morale, and retention; a competitive edge in hiring from larger geographic areas; possible accommodations for certain workers; and promoting employees’ work-life balance. Some state and local governments also promote telework to reduce traffic congestion and benefit the environment.

Schedules. Telecommuting can be informal, such as during special, short-term projects; on a regular basis, such as one or two days a week; a formal arrangement for 100 percent of work time; or as part of emergency planning for storms, natural disasters, power outages, quarantines, and the like.

Locations. While most telecommuters work from a home office, there are other options, including satellite offices, "hoteling" in leased space on an as-needed basis, or mobile offices.

There are no direct federal laws that regulate private-sector telecommuting. However, there are certain ancillary laws employers should consider.

Fair Labor Standards Act (FLSA). Employers covered by FLSA must monitor hours of work by nonexempt employees and maintain records recording total hours worked each day and workweek (29 C.F.R. § 516.2(a)(7)). Nonexempt employees are covered by the FLSA's restrictions on minimum wage and overtime regardless of where they perform their jobs, including home offices. Therefore, a telecommuting agreement should require the telecommuter to report hours worked on a daily and weekly basis. Employees may keep timecards, but computer or telephone tracking systems that generate logs of hours worked are more reliable.

Covered employers are required to pay employees for all hours worked, regardless of whether they have issued rules prohibiting work beyond a prescribed number of hours. Therefore, an agreement should include a provision advising the employee not to work more than a specified number of hours a week without prior approval. Because of these potential problems, some companies limit telecommuting to exempt employees. Trying to circumvent the FLSA's overtime liability by transforming a non-exempt employee's job into an exempt administrative position or attempting to reclassify employees as independent contractors when they are working on company-supplied equipment could be questioned in an FLSA audit.

The United States Department of Labor has issued Field Assistance Bulletin No. 2023-1 addressing telework under the FLSA. The Department emphasized the importance of keeping track of compensable break time, paying attention to remote workers’ working time, and exercising reasonable diligence to confirm that all unscheduled work hours are captured.

Discrimination. Federal fair employment laws prohibit employment practices that discriminate based on age, race, color, sex, national origin, religion, disability, and genetic information. In many states, sexual orientation, gender identity, and marital and familial status are also protected characteristics. Employers may wish to use caution in interviewing remote job candidates because the technology available to some candidates may lead to claims of disparate impact on protected classes under these laws. Please see the Discrimination section.

Americans with Disabilities Act (ADA). The ADA requires a covered employer to make reasonable accommodations to allow a disabled individual to perform the essential functions of their job. While the ADA does not mention telecommuting as a potential reasonable accommodation, several courts have suggested that employers must consider allowing an employee to telecommute under certain circumstances. At the very least, the ADA requires an examination of each case to determine appropriate reasonable accommodations and whether such accommodation would be a "hardship." Employers offering telecommuting as a reasonable accommodation under the ADA should evaluate the essential functions of the employee's job to determine whether telecommuting is even feasible.

The Sixth Circuit Court of Appeals has ruled that telecommuting may be a reasonable accommodation under the ADA whenever an employee can effectively perform all work-related duties at home, especially with advances in technology, However, the court was careful to clarify that it was “not rejecting the long line of precedent recognizing predictable attendance as an essential function of most jobs” (EEOC v. Ford Motor Co.,No. 12-2484 (6th Cir. Mich. 4/22/14)).

The Sixth Circuit’s decision makes telecommuting an option that many employers will need to consider when an employee requests reasonable accommodation for a disability. When weighing a telecommuting request, employers should consider whether an employee’s physical presence is actually required in the workplace and should review communication options that may provide alternatives to physical attendance in the workplace.

On the other hand, the Tenth Circuit Court of Appeals ruled that a hospital that had an employee who became legally blind and could no longer drive the 120-mile daily commute to her job was not obligated to allow her to telecommute, as her position required more than four hours of face-to-face interactions per day. (Unrein v. PHC-Fort Morgan, Inc. (10th Cir. April 8, 2021)). The court held that, although the ADA places obligations on an employer to accommodate disabled workers, the obligation was “not absolute,” and the plaintiff herself could have eliminated the transportation barrier by obtaining rides or moving closer to the hospital.

The Seventh Circuit has held that a request for accommodation to work remotely full-time was not reasonable because it would not have enabled her to perform the job duties that required her to be in person such as on-site monitoring and evaluation of department employees (Kinney v. St. Mary’s Health, Inc., No. 22-2740 (7th Cir., Aug. 7, 2023)). The court also held that the fact that many employees were temporarily able to work remotely during the pandemic did not mean that those jobs did not have essential functions that required in-person work over the medium to long term. The determination of whether a specific job had essential functions that necessitated in-person work required a case-specific inquiry.

In an unpublished opinion, the Fifth Circuit Court of Appeals held that there were genuine issues of material fact regarding whether both travel to and physical presence in the office during the entire workday were essential job duties for a communications programs specialist who worked for the United States Postal Service (Montague v. United States Postal Service, No. 22-20113, (June 28, 2023)).

The Equal Employment Opportunity Commission (EEOC) has issued guidance on how an employer should respond to an employee who may be unable to receive a COVID-19 vaccination due to a disability. Prior temporary telework may be a factor in assessing whether telework would constitute a reasonable accommodation under the ADA. Additional EEOC guidance is available at the EEOC site.

Family and Medical Leave Act (FMLA). The availability of telecommuting may assist both the employee and employer by providing an alternative to taking a full leave by allowing an employee to telecommute full- or part-time on an intermittent basis. Note: While the FMLA does not prohibit working at home during leave, the U.S. Department of Labor has said that any time spent working for the company cannot count against the employee's federal allotment of 12 weeks of leave.

The FMLA requires that an employee work at a worksite where there are 50 or more employees on-site or within a 75-mile radius of the worksite. An employee’s personal residence is not a worksite. For employees who work from home remotely or under some other telework arrangement, or other employees, such as salespersons who may leave to work from and return to their residence, the worksite is the location to which they report or from which they receive assignments.

Occupational Safety and Health Administration (OSHA). OSHA will not hold companies responsible for the safety of their telecommuters' home offices. However, since the employer's workers' compensation carrier is responsible for any job-related injuries to an employee whether at home or the workplace, the employer may want to publicize and exercise the right to inspect home offices for safety standards.

PUMP Act. The Department of Labor’s Field Assistance Bulletin No. 2023-1 notes that the Providing Urgent Maternal Protections for Nursing Mothers Act requires accommodations for nursing employees, whether remote or on-site. Under the act, both hourly and salaried employees must receive break time and a private place to pump at work.

State laws. Employers should determine whether their state has laws regulating telecommuting, especially with regard to workers' compensation. There are state laws regarding meal and rest breaks. Employees must also accept responsibility for any state tax consequences attendant on working at home and for complying with any local ordinances that would conflict with their ability to work at home.

Most states also have laws that make employers responsible for injuries that arise out of the employment relationship and occur in the course of employment. States also require employers to provide a safe workplace. This is a very complex and state-specific area of the law, so employers are advised to consult with an attorney when implementing a telecommuting plan.

Some states require employers to include salary ranges in their job postings for positions that could be performed in that state.

Local requirements. Employees setting up a home office should look into any restrictions under local zoning regulations or other ordinances that would conflict with their ability to work from home.

State income taxes. Some states have reciprocity agreements so that employees who telecommute from a state other than the one where the employer is located do not face double taxation on their incomes; other states do not. Employees working for an extended period of time in Arkansas, Connecticut, Delaware, Nebraska, New York, Pennsylvania, and Massachusetts may incur additional tax obligations. The “convenience of the employer” rule was challenged by multiple states in the United States Supreme Court, but it declined to hear the case. It is best to contact the state tax department or seek advice from a local attorney. At this time, there is no federal legislation on this issue.

Employer tax concerns. Some employees may be able to deduct expenses such as rent, utilities, depreciation, and insurance, security system costs, and certain telephone costs for a "home office” used exclusively as a place of business from their federal income taxes (Internal Revenue Code § 280A). Expenses that may be deducted include depreciation and repairs, rent, utilities, insurance, and the cost of security systems. Employers, however, should refrain from giving tax advice and refer employees to their own accountants or tax consultants.

Telecommuters from other states. Telecommuters residing in other states could inadvertently establish a physical presence in a state, giving rise to registration and tax issues. For example, if sales of goods or services were made in the other state, it could establish a presence; if administrative or support work was done, it would not. Employers may contact their state attorney general's office if this issue applies to their organization.

Workers’ compensation. In general, an employee is covered under their employer’s workers’ compensation insurance policy if the injury was work-related. State requirements for coverage vary. Please see the Workers’ Compensation section.

A remote workforce policy should address security, expectations, and workload issues. Employers should study each job that will be allowed to happen remotely to be sure the standards and expectations are reasonable. Employers should base eligibility for the remote work on clear criteria and reserve the right to terminate the policy at their discretion.

A remote work policy should:

In addition to a remote work policy, employers should also consider having remote work agreements that are in writing and signed by the employee. These cannot be all-inclusive and should be company-specific, tailored to the particular nuances of a business. In setting out the obligations of both employer and employee, key points to consider are policy issues, operational issues, management issues, and security issues.

That agreement should:

To preserve a company's normal prerogatives, such as disciplinary procedures and dismissal rights, the telecommuting agreement should state that it does not change the at-will nature of the employer/employee relationship, as stated in the employee handbook. Also, compensation, benefits, and standard work hours (unless the employer and employee specifically agree otherwise) are not affected by the agreement. The agreement should specify whether the telecommuter is an independent contractor or employee and clearly define the duties of the position and state that the agreement will be discontinued if the arrangement no longer serves the best interests of the company.

A reliable, efficient telecommuting program should:

Home offices should have a lockable door, a paper shredder, and a lockable file cabinet. The telecommuting agreement should address the safeguarding of company data files, trade secrets, and other proprietary information on electronic devices, even when owned by the employee, but used for work. Security measures must be followed strictly, and telecommuters must immediately report any breeches of data security. Employers should also retain the right to monitor e-mail, Internet use, and other communication by teleworkers during business hours, especially if the telecommuter is working with personal health information data covered under the Health Insurance Portability and Accountability Act (HIPAA) Privacy Rule.

Under the Telework Enhancement Act of 2010 (Pub. Law 111–292), the head of each executive agency must establish and implement a policy authorizing employees to telework and incorporating telecommuting options into agency emergency action plans. Permission for a federal employee to telecommute requires a written telecommuting agreement between the employee and manager outlining specific work to be performed and the employee's participation in a telework training program. Employees who have been disciplined in the calendar year are not allowed to participate.

Temporary teleworking arrangements are an essential part of emergency planning for disruptions due to natural or man-made disasters, fuel shortages, or pandemic disease when employees are unable to, or refuse to, come to work. Employers should create a list of employees who could successfully perform their jobs, or elements of their jobs, through telecommuting. They should investigate which employees would need laptops or have home computers that would suffice and determine whether those employees need high-speed Internet access in order to access company files remotely and whether they would need special software installed to perform company-related tasks, as well as what types of access to servers and files they would need.