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The practice of working from home, whether several days a week or full-time, has become the norm for many companies. According to a LinkedIn report, there has been a 78% increase since 2016 in job posts mentioning work flexibility.
While remote working offers many benefits to both employers and employees, there are potential liability concerns that employers need to be aware of. These range from at-home injuries to data security practices to monitoring actual work hours.
Small business expert Barbara Weltman provides insights into these liability issues and advice on how businesses can protect themselves.
Barbara Weltman has been called the "guru of small business taxes" by The Wall Street Journal. She is a tax and business attorney, small business consultant, speaker and author. Among her top-selling books are J.K. Lasser's 1001 Deductions & Tax Breaks and The Complete Idiot’s Guide To Starting A Home-Based Business.
Greg Corombos: Our guest this week on Expert Insights is Barbara Weltman. She's an author and speaker, a small business expert, and a longtime tax and business attorney. Today, we want to get her insights into liability concerns that business owners need to consider, concerning their employees who work from home. And Barbara, thanks very much for being with us.
Barbara Weltman: It's a pleasure to join you today.
GC: Thank you, and it's good to have you back with us. And you have recently written about this and you get into some very specific areas that business owners ought to pay attention to, and we'll get to those in just a moment. But first of all, how big of an issue is this liability concerned becoming, now that we have so many more people working from home.
BW: I saw a recent statistic that said something like about 17% of employees work from home full time; they’re full-time remote workers. But 66% of all employees work sometime from home. So it really touches just about every business.
GC: Any questions that you think that employers need to be asking? Maybe they already are and more folks need to be doing it, or maybe most folks aren't doing this. But what are some questions that are specific to working from home that employers should be asking before hiring people to protect their business in terms of liability?
BW: There are a number of areas that businesses need to address when they allow employees to work from home. There are great benefits to the company for doing it. You can save on overhead, you can get talent that's remote. You're not limited to the workforce within your area. And technology makes it easy for remote employees to collaborate and meetup and all of that. So there really are great benefits to encouraging the relationship, especially since workers like it because it helps their work-life balance.
But with that said, I think you have to go in with your eyes open and recognize that there are certain issues that you have to think about. So one would be, what happens if an employee is injured at home? They trip over a child's toilet, say, and they injure themselves, but they're on the clock. Can an employer be held liable for this? Does an employer have to come in and inspect every employee's home? I mean, these are just issues to think about.
There have been court cases that have held that when employees are on the clock, then they can collect workers comp for on the job injuries. And so there is that concern to think about.
But with that said, I mean, you're not going to be going into your employees' homes and check out if they're all their wires are buried. I think just make sure that you have good insurance coverage, that whatever policies you have, your workers' comp policy and other liability coverage, that you protect yourself in that way. So injuries at home, accidents at home, that's one thing.
GC: Let’s stay there for just a second because are there any specific laws that all businesses have to abide by? Or is it really up to each business to kind establish its own policy?
BW: Well, it is pretty clear that in all the states where there is work-required workers comp that you do have to cover employees who work from home. So that's pretty clear cut. And so you are required to do that. But in terms of anything else, like OSHA or any...there's nothing on this yet, but I wouldn't be surprised if OSHA--that's the federal agency that is that oversees workplace safety--if we don't see something in the future about what employer responsibilities are with this in this regard.
GC: All right, I rudely cut you off after talking about accidents, what are some other areas that liability needs to be front and center for business owners?
BW: Sure, not rude at all. Another area and this is at the time for October being data security, cybersecurity month. It's a hot topic these days about data security. When you allow an employee to log on to the company server, you're opening yourself up for a whole mess of trouble.
I mean think about it. If an employee uses a home computer to log on to the company server, and then the employee’s children jump on and play games and go to sites that may be questionable, it could really infect the company's computers and expose the data to breaches and all kinds of bad things that that you don't really want to think about. But you should.
And the way to protect yourself as a business is to implement a data security plan. And this would include perhaps encrypting, what goes on. Requiring more, better password protection. And certainly educating employees about what they can and cannot do with respect to their computers, so they don't infect the company computer.
And finally, you might want to think about getting cyber liability insurance to either add on to an existing policy or a separate cyber liability policy to protect the company, just in case.
GC: And then there's another one, too, in terms of actually clocking in and out and keeping close track of what hours are actually being worked.
BW: Yeah, we're talking about having a...it's kind of easy in one sense to know when an employee is or is not working because they log on to the company computer.
However, just because they're logged on doesn't necessarily mean they're at the computer working. I mean, it's a little more challenging to know the exact time, but it's so essential to do this. Because besides the liability issue that we just talked about with being injured, I mean, if they're not on the clock, then you have no liability if there's an injury at home.
You also have to know the precise time that they're working for purposes of the Fair Labor Standards Act, the FLSA, which controls over the minimum wage and overtime rules. And we're facing a new overtime rule that takes effect January 1. And so it's more vital than ever to carefully know exactly the hours that employees are working. I think you have to check federal and state law to know what hours count and don't count you know--break times and things and whether they're they're considered hours worked. And make sure that you again, work with employees who are remote and make sure that they're logging on and off the company server appropriately.
GC: Barbara, I know, the law can get very particular here. Is there any room for common sense? I guess that's the question. Because if I'm headed back to the kitchen to get another cup of coffee, and my kid left a toy out, and I fall over it, that's pretty hard to blame on the company. But if I break my leg because it's slippery outside, and I'm going to the post office to mail something that’s related to work, well, that takes on a different connotation. So is there a window for common sense or just common sense have to be spelled out in official policy?
BW: Well, I wouldn't leave things to chance because cases you wouldn't believe.
GC: Do tell.
BW: Yeah. There was a firefighter who, in fact, was on call. He wasn't even actually on the job. He was just on call. And he fell off a ladder at home and was injured. And he was covered because he was on the clock.
And so don't assume that common sense prevails here. You know, we really need, I think, to stay up on developments in this area and to work with an employment law attorney if you have any questions. And be sure to talk to your insurance agent to make sure your coverage is appropriate and sufficient.
GC: You mentioned the pluses of folks working remotely--lower overhead, you got a much greater breadth of talent if you don't have to have them in a local area. But given some of these concerns, and all these different workplaces instead of everybody congregating into one, is it still a net positive?
BW: Well, I think it's a reality. You're not going to get the toothpaste back in the tube now that people know they can work from home and they like working from home. You're not going to reverse the trend. I think I know...I can't remember the big company...but they ended their telework policy because they wanted everybody on site.
But I don't think that's the norm. I think we're going to see more and more telework, especially...not only all the positives we already mentioned but look at the benefit to the environment with people not commuting and the cost savings to employees to not have to commute, to not have to buy lunch at work and all of that. So I think that there are so many positives involved and big dollar savings for companies, that it's just a matter of addressing the negatives.
GC: Barbara, fascinating insights. As always, thank you so much for your time today. We greatly appreciate it.
BW: Oh, it's been great. Thank you.
GC: Barbara Weltman, author, speaker, small business expert, longtime tax and business attorney. I'm Greg Corombos reporting for Expert Insights.
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