Telecommuting Issues for Employers: Know Your Risks — and How to Manage Them

Hiring Challenges

Recruiting remote workers presents some of the same challenges as conventional recruitment as well as some unique issues. A few considerations are particularly important:

• Your recruiters have less opportunity to evaluate body language and soft skills when screening candidates
• Qualified candidates must possess sufficient initiative to work without face-to-face supervision as well as to ask for help when they need it
• Suitable candidates must possess basic technology literacy which will allow them to use remote digital tools and to work with your tech support team

One way to address these challenges is by factoring them into your screening and interviewing process. For instance, you can:

• Include qualifications such as self-motivation and computer literacy in job descriptions
• Conduct video chat interviews so that recruiters can evaluate body language
• Ask candidates questions about their ability to work independently, time-management skills and technology skills

Work with your human resources team to develop procedures for screening candidates to evaluate suitability for remote work.

Communication

With remote workers, you are dependent on technology for communication. Make sure that the communications technology you use is optimized for telecommuting.

In an office environment, many businesses rely on email for digital communication. However, this may not be efficient in an online environment. Email is designed primarily for communication between 2 parties, but if several team members are involved in a discussion, the conversation can get convoluted. 

For example, one team member may be a few emails behind in the discussion and unaware of recent comments. File sharing via email can generate similar problems, with one team member using an older version of a file while others are working from the latest update.

You can address the limitations of email by using a communications solution designed for online group communication. Digital project management tools such as Microsoft Project replace the email paradigm of communication with one modeled on social media, where everyone can see the latest comments and access current file versions. 

If you need a more robust communications solution, unified communications tools such as Cisco Unified Communications Manager provide an integrated platform for carrying on conversations over multiple channels, including voice, video and instant messaging.

Project Management

The challenges of communicating in a telecommuting environment intersect with challenges for remote project management. In contrast to an office, a remote work environment doesn’t provide managers with the opportunity to visually supervise workers. Instead, you must rely on digital tools to assign projects, deliver directions, answer questions and monitor progress.

This is another area where digital project management tools can provide a solution. A digital portal can be used to assign tasks, schedule deadlines, convey instructions, respond to questions and track updates. Digital project management interfaces also allow you to segment teams into groups of users. This makes it easier to clarify who has supervisory authority, who needs to be involved in a communication chain and who should have access to relevant messages and files.

A project-management tool suitable for remote work should include a number of key features:

• Permissions settings which allow managers to decide who can view and edit documents or assign tasks
• Task scheduling
• Communications tools, particularly support for group discussion and private messaging
• File sharing
• Task-progress tracking
• Analytics and reporting tools

In some cases, you may need your project management tool to integrate with other applications. For instance, you may want a tool which integrates with a payment processing app so that you can automate the process of paying workers when projects are completed. Talk to your information technology specialist about which project-management program might be suitable for your remote team.

Employee Engagement

One of the disadvantages of telecommuting is that employees lack the type of daily face-to-face interaction with coworkers and supervisors they experience in an office environment. This can make work more impersonal, promoting a tendency toward employee disengagement. Employees who work exclusively from home tend to be less engaged than those who split their work between the office and telecommuting, according to Gallup research. Optimal engagement takes place when employees spend 60% to 80% of their time working off-site, translating into 3 or 4 days out of a 5-day work week.

When using an exclusively remote workforce, it’s important to take steps to compensate for these limitations. You can:

• Incorporate video chat into your communications procedures to add a sense of remote presence
• Assign mentors to remote workers
• Create a company social media profile or discussion group where workers can socialize
• Conduct periodic employee reviews with remote workers to discuss their performance and career goals
• Offer incentives and prizes to remote workers
• Schedule remote team-building activities

Talk with your human resources team about strategies you can use to increase remote worker engagement.

Home Workplace Health and Safety Issues

When an employee is working in your office, you are responsible for providing a healthy and safe working environment. With telecommuting, this becomes complex. 

The Occupational Safety and Health Administration (OSHA) has issued some general guidance on inspection policies and procedures in home offices, but it leaves some details open to legal review.

In general, OSHA won’t normally inspect home offices, hold employers liable for home office conditions or require an employer to inspect an employee’s home office. However, if a home-based employee is injured while working for you because of a hazard created by work-related materials, equipment or processes, your business may be liable, and the worker may be entitled to compensation.

To protect yourself from this risk, you can take a number of preventive measures:

• Require home workers to designate a work area in their home
• Require home workers to fill out a health and safety checklist or allow a home office inspection
• Keep photos from home office inspections for your records
• Require home workers to carry health insurance
• Review your own business insurance policy to make sure you are covered in the event a home worker is injured

How these general guidelines apply will vary with the specifics of your business model and situation. Speak to your workplace safety adviser, legal adviser and insurance professional about which steps are appropriate for you.

Working From Home Legal Issues

In addition to health and safety issues, other legal liability issues may arise from telecommuting. For instance:

• If an employee damages work-related equipment, who is liable for the loss, and will your insurance cover it?
• Who is liable if one of your home workers provides bad advice to a client which causes damage to their health, finances or reputation?
• Who is liable if your customers are harmed by a data breach caused by a security flaw in a home employee’s network?
• Are your home workers in compliance with local zoning restrictions regarding visits from customers?
• Who is liable if telecommuting employees use their home office or your company network for inappropriate communication or harassment?

Talk to your legal and small business insurance advisers about whether you need to take any steps in these or other areas where you might incur liability. For instance, you may be advised to carry management liability insurance to cover you from circumstances not covered under commercial general liability insurance. In some industries, you may need errors and omissions insurance for protection against claims stemming from professional advice.

Additionally, consider whether you should require home workers to carry homeowner’s insurance protecting their home and property against damages during work hours. Make sure remote workers are advised of your cybersecurity and harassment policies and receive adequate training in these areas. If circumstances warrant, check whether any zoning restrictions apply to your home workers.

Tax Reporting Complications

Telecommuting requires employers to consider some special tax implications:

• In some states, employees who work for an employer in another state are liable for taxes in both states (double taxation), which can affect your for withholding obligations
• Some employees may work from more than one residence in more than one state, raising issues about which state they should be taxed from and whether double taxation applies
• Employees who have recently moved may be required to prove to state auditors whether or not they intended to permanently change their domicile

Tax regulations regarding these issues are fluid and vary by state, so you should consult a tax professional if you have questions about your tax-filing obligations.

Remote workers also may claim business expense deductions while working for you. For instance, your policy may allow a remote worker to claim a reimbursement for the portion of their cell phone bill used for remote work. In some states such as California, reimbursement of remote workers is required for certain expenses such as cell phone, Internet and travel expenses. 

When such deductions apply, make sure you have a procedure for documenting expenses. For instance, you may use an expense-reporting app which allows workers to scan in receipts on their mobile phones, such as SAP Concur. 

Protect Your Business by Mitigating Telecommuting Risks

Telecommuting issues facing you as an employer range include management challenges such as hiring, communication, project management and employee motivation. They also include liability concerns such as health and safety issues and legal risks. Additionally, telecommuting can complicate your tax reporting.

Protect your business by taking proactive steps to mitigate these risks. If you need professional advice to help you assess your risk and plan your risk management strategy, or if you need to purchase additional insurance, consider tapping into business financing resources such as a business line of credit to cover your consulting expenses.