The Rise of Remote Work: Possible Legal Implications of Working from Home│North Carolina, USA

Since the onset of the COVID-19 pandemic, attitudes have largely shifted regarding remote work. A majority of employees now believe that significant portions of their job can be performed remotely. That belief, combined with employees’ desire for flexibility, has caused a large number of employers to implement broadened remote work policies.  In other instances, companies have gone “full remote”, allowing employees to reside virtually anywhere, conducting 100% of the company’s business from home offices.

Working from home, however, raises questions surrounding employers’ legal obligations. What “office” rules and protections apply when employees are not physically in the office? What happens if the remote employees are out of state?

Employment in the US is governed by a mosaic of federal, state, and municipal laws and regulations, and because remote employees are generally subject to the laws of the city and state where they are physically located, failure to comply with state and local requirements may result in significant liability. In addition to potential state-by-state issues, employers should remember that even if not physically present in the office, employee conduct may give rise to employer liability.  It is therefore critical that employers consider the legal issues associated with remote work.

Many laws relating to the payment of employees are state specific. Indeed, employee overtime, minimum wage, taxes, and disclosure requirements are governed by the state where the employee is physically located when performing the service. One state-specific instance that employers may face is the payment of final wages to a terminated employee. Under North Carolina law, an employer is required to pay a terminated employee their final wages no later than the next regularly scheduled pay day. Take the same employee working remotely from California, however, and that employee’s final wages would be due immediately at the time of termination.

Another issue that frequently arises with remote employees is the employer’s responsibility for work-related expenses. As of February 2023, nine US states and the District of Columbia require employers to reimburse certain business-related expenses.  A remote employee performing duties in Illinois, for example, may be entitled to reimbursement for their “Instant Ink” and printer paper expenses, among other items tethered to remote work.

Finally, employers should be aware of the location of remote employees because the employer may be required to remit tax withholdings or unemployment taxes to the states where the employees are performing the work.  All told, with the variances in state-by-state obligations, it is critical employers keep tabs on where the work is being performed.

Employers’ general health and safety obligations under state and federal laws remain in place with respect to remote employees. As in the typical office setting, employers are responsible for hazards caused by materials, equipment, or work processes the employer provides or requires to be used in an employee’s remote setup. Employers should ensure items provided to remote employees (such as computers, power strips, or office furniture) meet safety standards, and they must provide proper training on how to use them. Additionally, remote employees should be encouraged to report workplace injuries and unsafe working conditions.

When employees’ homes become their offices, or when employees move across state lines to work remotely, the application of workers compensation laws is impacted. Coverage obligations of employers are oftentimes state specific, requiring an understanding of both where an employee is working and what that state’s workers compensation laws mandate.

Unlike coverage requirements, however, the rules surrounding remote work injuries are not as clear. Injuries that occur while an employee is remote may be work-related if the injury:

For example, an employee who injures their back carrying a stack of file boxes from their front door to their home office may have a compensable work-related injury.  On the other hand, an employee who trips over the curb while walking their dog during lunch would be less likely to prevail on a worker’s compensation claim.

Employers should ensure remote employees know of their obligation to report work-related injuries and understand the company’s reporting process. Moreover, employers should set clear guidelines on both job responsibilities and work hours for remote employees to help determine work-related injuries.

Employers also have a duty to comply with anti-discrimination and anti-harassment laws, regardless of whether an employee is working in the office or remotely. Moreover, employers’ anti-harassment and anti-discrimination policies apply with equal force whether employees are in-person or remote.

An employer may be susceptible to harassment, discrimination, and retaliation claims that arise out of virtual forms of communication. For example, and as one might expect, discriminatory emails or texts sent or received by remote employees constitutes discriminatory conduct. Discriminatory behaviour may manifest in more novel forms, however, such as inappropriate virtual backgrounds or offensive office décor visible during video conferences. Such actions are no less unlawful merely because they occurred off the employer’s premises.

To help prevent discrimination and harassment issues from arising remotely, employers should confirm that their policies specifically address the conduct of remote workers and train their workers to ensure awareness and compliance with these policies.

Compliance with labour and employment laws can be hard work for employers. Throw in the recent dramatic increase in work-from-home arrangements and compliance may appear even more challenging. This article sets forth just a handful of issues that employers are likely to confront and should remain aware of as remote work continues to gather momentum. Employers may want to focus in on the following objectives to monitor compliance issues:

By following these steps, employers can limit their exposure and optimise employees’ experience while working remotely.