View source: Jonathan Herpy
The increase in remote labor isn’t a phenomenon restricted only to the 2020 pandemic. More and more enterprises have been employing people remotely in recent years, with a 2019 study showing that 30% of those surveyed worked remotely on a full-time basis.
Given this number has likely only increased over the past several months, it’s important that employers develop sound policies and practices when it comes to their remote employees.
Remote Employees Vs. Independent Contractors
Before diving into some of the best practices for managing remote workers, it’s important to note the difference between an employee and an independent contractor. In my experience as a partner at a Chicago-based law firm, companies often hire independent contractors to handle certain projects or workflows, and those individuals frequently work remotely.
The policies you employ when it comes to independent contractors will differ from those that pertain to your employees. To determine whether a worker is an independent contractor, consider these questions:
- Do you control how they complete their work? You have more control over how your employees complete tasks than what you’d exercise over an independent contractor. That’s not to say you wouldn’t give a contractor instructions on how to complete certain tasks, but they’re ultimately the ones who determine how their work is completed.
- Do you pay their taxes? Employers typically withhold employees’ taxes from their paychecks, and they’ll have a W-2 on record for each employee. Independent contractors, on the other hand, might fill out a W-9, but they are ultimately responsible for handling their own taxes.
- Do you pay them a salary? If you pay a worker a set salary, they’re likely an employee, not an independent contractor. Independent contractors often charge flat rates for projects.
Assuming your remote workers are employees, major areas where sound policy is necessary includes:
Compensation And Payment
- Minimum wage: The Fair Labor Standards Actsets forth a minimum wage for employees, but if a state’s minimum wage is higher, that’s the rate that applies.
- Business expenses: If your remote employees incur business-related expenses through their work, those expenses should be paid, particularly if those costs would drop their weekly earnings below minimum wage. For example, if they use their internet connection for work, you might need to pay a portion of their monthly bill.
- Breaks and paid time off: State and federal laws still apply to remote workers when it comes to breaks and time off. As such, make sure time is properly tracked and that workers are compensated correctly, including when it comes to paid and unpaid breaks.
- Direct deposit: When it comes to working with remote employees, handling payment through direct deposit can be advantageous. However, many states only allow direct depositwith the employee’s consent, so if they need a physical check mailed to them, you can’t force direct deposit upon them.
- Track hours worked. It can be a challenge to track hours worked by remote employees, but making sure your records in this area are accurate is key. In addition, it helps improve accountability for your employees. Requiring remote workers to clock in at a certain time, record time spent on work and so forth can help keep accurate records.
- Keep an eye on overtime. Strict controls should be in place to prevent employees from working overtime without your consent. Even something as simple as checking a work email can be counted toward the total number of hours worked during a week, so make sure you don’t have employees accidentally going over. If they do go over, federal lawrequires you to pay them overtime.
- Maintain employee records. The law also requires you to keep certain information on filefor each employee, including their name, address, hourly wage or salary, hours worked each week, etc. Much of this information should be gathered at the start of employment and kept in a secure repository.
- Security: One major area where policy is important is when it comes to security. Company data should be handled carefully, especially when working with employees who are outside the office. Policies might include requiring the use of a secure network, strict rules on the use of corporate hardware and access control for your databases.
- Communicating policies: Policies on how data is to be kept secure, what hours your employees are supposed to work, how tracking time will function, etc. should all be communicated to your remote workers. In addition, the FLSA and others may require certain notices to be displayedin the workplace or shared with employees. For remote workers, I recommend sending them those items electronically.
- Workplace safety: While home offices aren’t typically dangerous, there may still be a risk of injury to remote workers. Basic workplace safety protocols should be communicated to these workers, with remote work being contingent upon compliance. For instance, you might require home insurance coverage or a dedicated workspace.
- Workers’ compensation: Most workers’ compensation laws cover remote employees. Typically, the requirement for benefits is that an injury is sustained while in the course of fulfilling workplace duties. If your employees can make a case for that, they are most likely entitled to benefits. As such, you need to make sure you carry workers’ compensation insurance, even if your employees all work remotely.
Putting It All Together
Having employees work remotely can be highly beneficial for both them and your own company. However, you still have a responsibility to comply with all applicable standards, so careful planning and sound execution are both needed. Fortunately, if everything is constructed in a way that promotes safety, security and compliance, your company can benefit in the long run.