Legal Implications of Maintaining "Virtual" Work Arrangements

June 21, 2021

By: Stephen B. Stern

     With the number of COVID-19 cases plummeting and the number of vaccinated employees rising, many businesses are preparing for (or already have) employees returning to the office.  Many employees, however, intend to continue their remote or “virtual” (i.e., telecommuting) work arrangements either on a full-time or “hybrid” basis even after businesses have employees return to the office.  (One survey found 58% of workers planned to look for a new job if they were not allowed to continue working remotely).  While there are a number of potential benefits to continuing remote work arrangements, such as employee morale if it is indeed desired by many employees and cost cutting (e.g., needing to lease less space), there also are a number of potential legal ramifications if companies allow employees to continue to work remotely now that COVID-19 cases have dropped significantly.

     One potential ramification is how companies address employee requests to telecommute as a reasonable accommodation under the Americans with Disabilities Act (“ADA”).  Courts generally have shown a good amount of deference to businesses that have determined physical presence in the workplace is an essential function of a particular job.  As a result, courts often have found that telecommuting is not a reasonable accommodation under the ADA (because companies are not required to eliminate essential functions of a job in order to provide a reasonable accommodation).  While COVID-19 was spreading rapidly, many companies adapted to remote work arrangements and some even learned to function efficiently with employees working remotely.  The fact that remote or “virtual” work arrangements were provided while shelter-in-place orders and other COVID-19 precautions were implemented, however, does not necessarily mean companies will be precluded from identifying physical presence in the workplace as an essential function of certain jobs once they reopen their workplaces.  Indeed, the EEOC has specifically recognized (see here at D.15) that these virtual work arrangements may have been temporary and, as employees return to the workplace, employer determinations regarding the essential job functions will need to be “fact-specific.”  Thus, mandating physical presence in the workplace may remain a viable option for many businesses that allowed remote work arrangements while COVID-19 cases were spreading rapidly.  Many companies, however, plan to allow “hybrid” arrangements going forward, where employees work remotely certain days of the week and work in the office the other days of the week.  While there is some precedent for allowing employees to telecommute on occasion without eliminating physical presence in the workplace as an essential job function, it is unclear how these “hybrid” arrangements will affect essential job function determinations.  This is an area that is likely to lead to a good amount of litigation going forward.  In the meantime, human resource departments and legal counsel will need to evaluate these decisions carefully and undertake fact-intensive analyses when determining whether physical presence in the workplace is an essential job function, even if that presence is required only part of the time.

     Another area of uncertainty that will flow out of ongoing remote work arrangements is which state/local laws will govern the employment relationship.  In this regard, companies need to be mindful not only of federal employment laws (assuming they are big enough or otherwise are covered by the applicable statutes), but also of applicable state/local laws.  When employees all work out of a particular office location, it is generally easier to identify which state/local laws govern the employees in that location (there are some limited exceptions established by case law).  However, companies located in areas that draw employees from multiple jurisdictions (such as the D.C. Metropolitan Area or the New York Metropolitan Area) and allow employees to work remotely on an ongoing basis (as opposed to a temporary basis) open themselves up to potentially having to comply with the laws of each jurisdiction from where employees telecommute.  The potential for this uncertainty is not limited to businesses that operate in areas where employees commute from multiple jurisdictions, as remote work arrangements during COVID-19 led many companies to hire employees from across the country, with several employees never or seldom visiting or intending to visit the company’s office(s).  Furthermore, those businesses that allow “hybrid” remote work arrangements for some employees (e.g., 3 days in the office and 2 days remotely), may have even more challenges identifying which state/local laws apply if an employee is spending some time in one jurisdiction telecommuting and visiting the office in another jurisdiction.  In other words, companies that once contemplated complying only with a limited universe of state/local employment laws may now need to comply with many more state/local laws (and it may not even be clear which laws apply depending on the work arraignments).  This too is an area that likely will lead to a lot of litigation and will need to be monitored by companies as case law develops on this topic.

     Ongoing remote work arrangements also will raise concerns involving wage/hour compliance.  If a nonexempt employee reports that he/she worked an entire day or a full 40-hour workweek, generally the company must pay the employee for all the hours he/she reported as having been worked, unless the company can demonstrate that the employee misrepresented the number of hours he/she worked.  However, monitoring the number of hours a nonexempt employee worked when he/she worked from home is a challenge.  Similarly, if a nonexempt employee reports having worked overtime, the company must compensate the employee for the overtime.  In an effort to try to avoid unauthorized overtime, companies may want to implement strong policies that prevent employees from working overtime hours without express authorization from an authorized supervisor.  While an employer may still need to compensate an employee for working unauthorized overtime hours, at the very least the employer may discipline an employee who worked overtime without authorization.

     The protection of trade secrets and other confidential business information is another issue to which companies should devote time, attention, and resources when evaluating risks associated with ongoing remote work arrangements.  We addressed this topic in a post here, and those considerations during COVID-19 largely continue to apply.

     As illustrated with each of these individual issues, while ongoing remote work arrangements may bring about certain benefits for companies and their employees, they also will pose notable challenges and a good amount of uncertainty that will require substantial involvement from legal counsel and monitoring of court decisions as areas of uncertainty are addressed by the courts.