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Remote/Virtual Workforce Management – Make Sure Your Organization Puts Legal Compliance in Place

February 14, 2020

By Michael Burns, courtesy of SBAM Approved Partner ASE

It may not be that widely known, but ASE has implemented remote working schedules for up to 75% of its staff. This is allowing ASE to downsize its total brick and mortar footprint, reduce facility costs, and also expand our reach to serve our members more directly for our training and networking programming.

ASE’s experience with managing a virtual workforce so far is positive. However, it takes a new way to manage planning as well as to make sure our many programs and initiatives meet our high expectations and that ASE’s overall business goals and objectives are also met.

As others have opined, setting up a remote work program is not as easy as just sending an employee home with their laptop. There are risks that organization’s need to address when transitioning to virtual workforce infrastructures.

A recent Forbes article notes several compliance concerns that come with adopting and managing a remote workforce:

Are Workers Properly Classified?

Some employers assume that workers that are set free to work at home can then be classified as independent contractors. Legitimate contractors remove employer tax withholding responsibilities. But depending on the amount of control the employer requires over the now virtual worker, calling them independent contractors does not make them legally so. There are quite a few laws and regulatory oversight, both federal and state, that would not agree with an employer’s unilateral determination that the worker is in fact a contractor. It’s not just a question of taxes either. Workers that may be eligible for ERISA benefits if classified as an employee may object to being cut out of welfare and retirement benefits that they would otherwise be entitled to.  They may sue.

If an employee’s job is classified non-exempt all work from home is hours worked for wages. This can include afterhours emailing and project update or other ancillary work outside of normal work hours. Unmanaged hours worked can lead to unbudgeted overtime pay or if work goes unpaid, wage and hour claims can be brought.

Be Aware of Industry Regulation

Certain industries require licenses, permits, and such to be in place. Employees working at various locations and/or other states may not meet compliance requirements that can correctly be in place with a centralized worksite.

Salaries Must be Fairly Paid

Managing pay equity when employees are located in various regions of the country can be difficult. Those local employees must meet tax requirements, workers compensation coverage, and different state and local employment law coverage. The same issues apply for family leave, civil rights, and medical accommodation.

Offsite Workplaces Do Not Relieve Employer Safety Compliance Responsibility

If a worker is an employee as opposed to an independent contractor, the employer’s safety and health responsibilities extend to the employee’s home location. At the very least, home workers should be trained on safety and health basics to control against possible injury or accident causally related to the employment activities occurring there.

Pay Attention to Remote Workers’ Career Opportunities

Laruel Farrer, author of Are Your Remote Workers Compliant article notes that remote workers can fall victim to what she calls as “out of site out of mind discrimination” where the remote worker is forgotten when promotions, assignments, and feedback activities take place. Managers of virtual workers need to oversee and track performance and “equitably manage team members regardless of location.”

Know What Tax and Wage Issues Exist Where the Virtual Employee Does Their Work

Because taxation is tied to geographic location, businesses are responsible for following the regional or local rules. The further afield the remote worker is (international), the higher the need for that “remote friendly” tax or labor consultant to ensure the country or regions laws, regulations, and ordinances are followed. That is not just international, California has local regions requiring payment of wages to non-exempt workers that vary by city or county, and if the employee works there even temporarily they may be covered by local wage and hour requirements.

Make Sure IT Security is in Place and Used

Workers should be trained on how to ensure their devices are secure when they are working from public locations. Public Wi-Fi is not normally secure. The employer should not only establish effective policies but should make sure employees working off-site are trained and use necessary security practices and channels to avoid system breaches and data theft.

Develop a Formal Telecommuting/Remote Work Policy

Have a formal policy to communicate all critical requirements of working remotely. Employees, particularly new ones, may forget they are in a work environment and must adhere to certain business norms and responsibilities when they are working at their home environment. If videoconferencing with a client, what should a person’s appearance be, should the family pet be put in another room? ASE has sample telecommuting/remote work policies available.

ASE offers programs and resources addressing the Virtual Workforce. In addition to sample policies, ASE can provide research on managing the virtual workforce and the benefits and challenges in doing it.

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