An Overview of Legal Issues In Telecommuting and Possible Solutions Part 1 of 2

An Overview of Legal Issues In Telecommuting and Possible Solutions Part 1 of 2
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1. Divergent Laws

A major legal issue in telecommuting relates to divergent laws. Traditional offices, confined to a single geographical entitly only had to comply with the employment law of that land. Telecommuters of a single enterprise working from diverse locations across states and countries raise a fresh legal challenge for employers. While federal and state laws apply to employees working from home and some states have enacted laws to cater to the new situations, telecommuting still raises many unique issues and challenges not covered by the existing laws.

Different states have different tax laws, and the employer needs to determine where to pay the taxes.

Many cities have zone-based work from home regulations that prevent or restrict an employee from operating a home based business, and in most cases, the law requires the home based entrepreneur obtain a permit or a license. Employees working from home run the risk of being included as those running their home based business and might become liable to pay for the required home office permit or license, or might violate the law if their home happens to be in a restricted zone.The onus is on the employer to incorporate such checks before authorizing the employee’s telecommuting arrangement.

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2. Wage and Hour Compliance (Fair Labor Standards Act)

One major legislation that impacts work from home legal regulations is the U.S. Fair Labor Standards Act. This act requires employers to record the working hours of each employee, and mandate overtime payment at time-and-a-half for work beyond normal hours.

Monitoring the actual work hours of a telecommuting employee is a difficult task for both the employers and employees, and very often the flex-time and pay-by-work arrangements make such timekeeping an unnecessary task. Possible solutions include requiring telecommuters to check in and check out via email, telephone, or chat and executing an agreement wherein telecommuters agree not to work overtime without prior written management approval.

3. Occupational Safety and Health (OSHA) and Workers Compensation:

A major telecommuting legal issues is the U.S. Occupational Safety and Health Administration (O.S.H.A.) regulations that requires employees to record work related injuries and illness. Employers face a still challenge to ensure telecommuting employees comply with workplace safety regulations and make sure home offices comply with the firm’s approved safety and ergonomic policies.

Related to O.S.H.A. is worker’s compensation for injuries while telecommuting. Injuries eligible for compensation under state laws usually require a case-by-case fact specific assessment, made difficult by the fact that while the traditional workplace will invariably have witnesses to the accident or injuries, the home office will not have such witnesses. Employers need to make sure telecommuting employees promptly record all work related injuries.

4. Constructive Dismissal

Constructive dismissal poses another legal issues in telecommuting.Constructive Dismissal occurs when an employee is, in effect, terminated without a formal layoff notice.

The law considers constructive dismissal as having taken place when the employer enforces a significant change in the duties or remuneration of an employee. The law could interpret the employer forcing an employee hitherto working on site to work from home, or asking the telecommuting employee to return to the regular workplace as constructive dismissal.

Continue on to the next page for more legal issues with telecommuting.

5. Discrimination Issues

Legal Issues in Telecommuting

Of the major legal issues in telecommuting is the risk of attracting anti-discrimination lawsuits. Employers offering telecommuting opportunities on a case-by-case basis or to a certain category of employees run the risk of indictment under federal and state employment discrimination laws.

The American with Disabilities Act mandates the employer to provide reasonable accommodation for an employee’s disability provided such accommodation does not put the company to undue hardship or affect a core work function. A disabled employee, denied the opportunity to telecommute could sue the employer under this act.

The solution to overcome such discrimination issues is a comprehensive telecommunication policy that clearly lists out the categories of jobs open for telecommuting and the eligibility criteria for employees to opt for telecommuting.

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6. Trade Secrets and Confidential Information

A major challenge of telecommuting is the work from home legal regulations pertaining to trade secreets and confidential ifnormation.

A successful telecommuting arrangement requires the telecommuting employee to have broad access to computerized company information accessible from remote locations. Most employers make the telecommuting employees sign a nondisclosure or confidentiality agreement, but data theft by means of hacking and ways outside the control of the telecommuting employee raises a legal challenge on who is to blame.

Employers need to obtain the telecommuting employee’s consent to monitor or access the employee’s home workspace including the computer, and ensure foolproof technological safeguards for their data.

7. Tort Liability

Tort liability rank among the major underestimated telecommuting legal issues. The liability for injuries to third party and damage to property caused by employee negligence rests with the employer in the traditional office. Any injury to a third person or damage to the telecommuter’s home office during the course of telecommuting work leads to a complicated situation on who bears the liability.

Employers who allow telecommuting need to extend their liability insurance coverage to the telecommuting employee’s home, and require telecommuters to maintain homeowner’s or renter’s insurance.

With the scope of telecommuters expanding day by day, it is a safe bet that more such legal entanglements await employers employing telecommuters.


  1. Bernardi, Lauren M. (1998). Telecommuting: legal and management issues. Canadian Manager
  2. Klein, Kristina, N; & Hager, Ashley, Z. (2008). Telecommuting: Legal Considerations. Retrieved from
  3. Lommel, Jane M. Ph.D. (2001) Time to Talk about Telecommuting. Retreived from