remote work compliance

Tips to Help Employers Resolve Remote Work Compliance Challenges

Remote workplaces have offered employees many benefits and revolutionized the way businesses operate. However, there are still many challenges employers face, especially when it comes to compliance in a remote space. The lack of face time with your employees can cause significant concern for company protection, restrictions and limitations on employee coverage and maintaining compliance across various geographical locations.

Remote work compliance challenges

Employee monitoring

When legally implemented, employers may monitor their remote employees to protect the company’s reputation (i.e., inappropriate employee behavior), safeguard company property (i.e., malware and cyberattacks), and ensure employee productivity (i.e., work-related programs used during work hours). However, there are a few things you should know to ensure you remain compliant with employee monitoring.

First and foremost, human resource (HR) professionals recommend disclosing monitoring policies and procedures to your employees. This should outline the purpose of monitoring, employee expectations for working remotely (i.e., time frames employees should be online and available, communication preferences) and a resource (i.e., HR department) to field any questions or concerns employees may have regarding monitoring. Disclosing this up front to employees can help establish and maintain a level of trust between you and your team.

Additionally, consider familiarizing yourself with federal and state legal regulations regarding employee monitoring. For example, the Electronic Communications Privacy Act (ECPA) is a federal law that protects employee privacy. This law generally extends to “wire, oral, and electronic communications while those communications are being made, are in transit, and when they are stored on computers” and “applies to email, telephone conversations, and data stored electronically.” Many states have independent laws and regulations for employee monitoring, such as California, Illinois and Maryland, which require both parties to consent to be monitored, whereas other states, such as Connecticut and Delaware, require employers to notify employees before monitoring them.

Wage requirements

There are state-specific laws and regulations that can restrict or cause significant hurdles for employers who have employees working remotely. For example, if you are based in California but you have an employee working remotely in Michigan, the minimum wage can significantly differ. In this case, California’s minimum wage is $14 an hour for employers with 25 employees or less ($15 an hour for 26 employees or more), whereas Michigan’s minimum wage is $9.87, but has different rates for various groups (i.e., minors between 16 and 17 years old receive $8.39 an hour, tipped employees receive $3.75 an hour, training wage is $4.25 for newly hired employees 16 to 19 years old for the first 90 days of employment). The federal minimum wage, as set by the Fair Labor Standards Act (FLSA), is $7.25 an hour.

It is the employer’s responsibility to understand these types of laws and regulations. Noncompliance can lead to hefty fines and penalties, as well as an increased risk of potential lawsuits.

Remote work structure

To successfully manage a remote workforce, employers must set and communicate expectations with structure. While it is not a legal requirement, it is strongly recommended that employers create and implement a remote work policy to support compliance. The policy should highlight work locations and schedules, equipment and resources to be provided to the employee, company policies and procedures (i.e., communication, privacy, employee conduct, health and safety practices, etc.).

It is particularly important for employers to know the whereabouts of their employees during worktime, as jurisdictions differ with benefits policies and laws. Ultimately, where employees perform their jobs, or conduct work-related tasks or travel, will impact their benefits coverage (i.e., mini-COBRA [Consolidated Omnibus Budget Reconciliation Act] insurance, maternity paid time off, workers’ compensation, etc.).

For example, what happens when an employee is injured in a car accident on his or her way to the FedEx store in another state or country? The short answer: It depends on your workers’ compensation policy. Workers’ compensation is state-based. For example, if you are a Texas resident and are injured in another state, the Texas Labor Code Section 406.071 states:

“(a) An employee who is injured while working in another jurisdiction or the employee’s legal beneficiary is entitled to all rights and remedies under this subtitle if:

(1) the injury would be compensable if it had occurred in this state; and

(2) the employee has significant contacts with this state, or the employment is principally located in this state.

(b) An employee has significant contacts with this state if the employee was hired or recruited in this state and the employee:

(1) was injured not later than one year after the date of hire;

(2) has worked in this state for at least 10 working days during the 12 months preceding the date of injury.”

Simply put, if you are injured and would be covered by workers’ compensation if the injury occurred in Texas, you would likely be entitled to workers’ compensation. However, if your workers’ compensation doesn’t cover a certain state and you have employees who reside or travel there, you should consider extraterritorial coverage. Does your workers’ compensation carrier provide coverage for the injury in that location? It depends on if your workers’ compensation has extraterritorial coverage and the state’s law applied to your case. In most remote work cases, an injured employee can claim benefits, but state laws may vary on defining what constitutes a work-related injury.

Typically, state laws require employers to provide workers’ compensation where the employee’s work is predominantly performed, including remote workers. However, given the complexity of remote work situations, it is best practice to seek guidance from professionals who can provide proper legal counsel.

Compliance in a remote workplace

Most businesses’ noncompliance issues result from limited resources, which can make managing compliance and developing an HR strategy very difficult. Did you know that failure to comply with FLSA can result in a $10,000 fine and additional penalties (i.e., back pay)?

There are many ways businesses can be noncompliant, such as HR (i.e., recruiting, hiring, terminating and treatment of employees), employee rights and labor laws (i.e., minimum wage, overtime, child labor, worker classification), health and safety (i.e., Occupational Safety and Health Administration) and taxes and financial reporting (i.e., missing annual filing deadlines, manual data entry errors). Some potential consequences of noncompliance include auditing, financial fees, suspension or termination of business, criminal charges and imprisonment, and a negative impact on your brand reputation.

The best way to be compliant in the workplace, especially in a remote workplace, is to invest in your HR department, such as hiring a compliance officer, using reliable software, and ensuring your staff is properly trained and equipped to maintain compliance. If you don’t have an HR department or would prefer an outside set of eyes to provide a fresh perspective, consider outsourcing your HR. Outsourcing HR doesn’t mean replacing your current staff; it is simply an extension that allows your current staff to refocus on more important tasks, such as employee management, rather than administrative tasks. This allows you to save time and money, and guarantees compliance.

Not sure if you are compliant with remote workplace laws and regulations? Contact AccessPoint. We are a full-service HR provider that can assist with workers’ compensation, employment practices liability insurance (EPLI) coverage, and in-house legal counsel to ensure you comply with both federal and state-specific regulations. Our HR specialists can also guide you in updating your employee handbook to include remote workplace policies and procedures.


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