Legal Implications of Allowing Employees to Work Outside the Office


In this electronically connected workforce, telecommuting or working from home is easier than ever. Research shows that employees who work from home tend to be more productive then when in the office, but setting up a telecommuting policy may not be as easy as it sounds. There are certain legal implications that employers should consider when allowing employees to work from home.

Employers need to educate their telecommuting hourly/non-exempt employees on what qualifies as “work” and how to keep accurate time records. The Fair Labor Standards Act contains no definition of “work.” Fortunately, the Department of Labor recognizes the difficulties of tracking hours worked when an employee telecommutes and is willing to accept any reasonable agreement of the parties, which takes into consideration all of the pertinent facts of his or her telecommuting agreement.

Therefore, it is up to the employer to:

  • Establish a clear telecommuting policy that is specific to the employee’s position. 
  • Effectively communicate the policy to its employees who may be in a position to work from home.
  • Have the employee sign an agreement outlining what is expected and how he or she will need to document time spent working. 

For example, an employer may require the employee to be at home and logged on to its network from 8 a.m. to 5 p.m. and record the employee’s hours to represent that nine-hour period. Alternatively, an employer may assign particular tasks or assignments that the employee is expected to complete each day and require the employee to document the time it takes him or her to complete the assignments.

Telecommuting policies should also include rules on working overtime. It is one thing when an employee is at the worksite and his or her supervisor can see that person working more than 40 hours. It is quite different when the employee is working from home, and the employer does not know how many hours the employee works until he or she turns in his or her time at the end of the week. Even when working from home, an employee is entitled to overtime payments if he or she works more than 40 hours. Thus, it is important that employers carefully monitor the hours of its telecommuters and address any instances of unauthorized overtime. Another issue arises where employees work overtime at home but do not report the hours. In that instance, if the employer knows or has reason to know that an employee is working more than 40 hours, the employer is obligated to pay overtime.

Ultimately it is an employer’s responsibility to ensure its non-exempt employees are paid for the hours they work, including overtime hours. A clear and effective telecommuting policy will allow employers to take advantage of the increased productivity that comes with employees who work from home while avoiding any potential legal pitfalls.



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