Recent articles in the Washington Post and USA Today have touted the benefits of teleworking/telecommuting as the solution to traffic tie-ups, stress, and even terrorist attacks. The federal government encourages the formation of such policies for its employees. Is it right for you, as an employer or an employee?

The terms teleworking and telecommuting are virtually synonymous. Teleworking accurately describes the process of working over telecommunications lines, but telecommuting has become the more popular phrase. Section 359 of Public Law 106-346 refers to telecommuting, while the Office of Personnel Management uses teleworking. The OPM defines telework as work that occurs on a routine, regular and recurring basis away from an employee's principal place of duty (e.g., at home, at a telework center, or at an alternate location) one or more days per week.

There are a number of factors to be considered before employers and employees can decide if it's right for them. The first and most important issue to be considered is whether the employee's job can successfully be performed from home. How important is face to face communication with either coworkers or clients? The employer would identify the essential job functions. For some jobs, the essential duties may only be performed in the workplace. For others, an alternate location may be feasible. The need for the employee's presence in the actual work place should be determined on a case by case basis.

Are there issues of data security? Those issues would include the security of data kept on the alternate location's computer and the security of data transmitted data over communications lines.

Personnel Issues

Some record-keeping will be essential, from both the employer and employees' viewpoints. The employer and employee should discuss how the employee will be supervised, how work completed will be tracked, and how completed work will be evaluated. Some employees may not be comfortable with prolonged time away from the main workplace. Some employers may not be confortable with employees spending prolonged time away from the main workplace as well. Such issues should be considered before a workplace policy is established.

Then there are some practical issues. The employer and employee would need to agree on who sets up the alternate location and who bears which costs associated with teleworking. If the alternate location is at home, an employer will want to reach an understanding with the telecommuting employee as to what specific area of the home will constitute the home office and the hours of the day during which the employee must work.

Fair Labor Standards Act Issues

There are several issues associated with the Fair Labor Standards Act (FLSA).

Telecommuters technically fall under the FLSA's definition of an "industrial home worker." There are a number of additional mandatory record-keeping requirements for employees classified as industrial home workers, such as the requirement that a "home workers' handbook" be accurately kept. Employers may be able to convince the Department of Labor that the record-keeping requirements should not be applicable to their telecommuting employees. Such approval should be obtained from the DOL in advance, particularly if the employer has a number of employees working from alternate locations.

Another issue employers should address in advance is determining how to capture all hours worked by telecommuters who are not exempt from the FLSA's minimum wage and overtime requirements. It is difficult for employers to monitor the actual amount of time telecommuters spend working. The employer should consider having all non-exempt telecommuters sign an agreement stating that they understand they are not to work more than a certain number of hours per week unless approved in advance in writing by their supervisor.

Injuries on the Job

In general, workers' compensation laws do not distinguish between home-based and office-based workers. The rules vary by state. Employers should create guidelines regarding the reporting of home injuries.

Tax Implications

There may be several income tax consequences for telecommuters. Several states impose a tax on nonresidents for income earned within that state. The tax may apply to telecommuters. Your tax advisor can help you determine if you reside in one state, but your income is earned in another state that imposes such a tax. The employer should also investigate whether it needs to withold taxes for that state.

The Internal Revenue Code also has several provisions which could apply to telecommuters. A telecommuter may be able to satisfy the requirements for deductions for a home office. The Internal Revenue Code requires that the space be for the exclusive and regular use as a place of business for the convenience of the employer. The exclusive-use test will be satisfied if a specific portion of your home is used solely for business purposes or inventory storage. The regular-basis test is satisfied if the space is used on a continuing basis for business purposes. You may be able to deduct certain expenses, including rent or depreciation, mortgage interest, real estate taxes, maintenance, and utilities. You cannot rent all or any portion of your home to your employer and claim a deduction for that portion.

ADA Considerations

The Americans with Disabilities Act does not require employers to offer telework programs to all employees. But if the employer offers one, it must be offered to employees with disabilities on an equal basis.

Allowing an employe to work at home may constitute a reasonable accommodation for a disabled employee. An employee whose job requires interaction with co-workers or "hands on " supervision may not be eligible for teleworking, even as an accommodation.

Some court cases have examined the issue of teleworking as a reasonable accommodation. Most of these cases focus on the issue of whether presence at the workplace is an essential function of a particular job. Several United States Courts of Appeal dealing with the issue have ruled that presence in the job is an essential function of the employment under the facts presented to it, and therefore telecommuting was not a reasonable accommodation.

Conclusions

Teleworking may be seen as a way to reduce traffic congestion, as a way to disperse a workforce in the event of a terrorist attack, or as a family-friendly policy. Employers and employees should both carefully calculate whether it is right in a particular situation for a particular employee.

Resources:

• The Interagency Telework Site is sponsored jointly by the Office of Personnel Administration and the General Services Administration. It offers a great deal of useful information.
• The Internal Revenue Web site and the Fair Labor Standards Act Advisor from the Department of Labor offer more information about some of the statutory requirements.
• NIST addresses Security for Telecommuting and Broadband Communications in a research paper.
• About Telecommuting has interesting articles.
• June Langhoff's Telecommuting Resource Center has articles and resource listings.