As many employees have returned to the workplace in the last year, a large portion of the workforce still continues to work remotely. Nearly 40% of employees work in either a remote or partially remote environment. To address the changing employment landscape, employers should ensure that they have the necessary policies to minimize additional risks that may arise with remote employees. Particularly, employers that employ individuals in California are responsible for reimbursing employees for all “necessary expenditures” that an employee incurs in the performance of their job. Such employers should establish clear policies to help ensure compliance with that requirement.
Employer Costs & Expenses
Under California Labor Code Section 2802, an employer is responsible for “indemnifying (reimbursing) his or her employee for all necessary expenditures or losses incurred by the employee in direct consequence of the discharge of his or her duties, or of his or her obedience to the directions of the employer . . . ” Such reimbursable expenses can include expenses that an employee incurs in setting up a remote work situation. For example, employers can be responsible for expenses such as remote office supplies, office furniture, internet service fees, phone bills, and potentially even rent for premises. Recently, the California Courts of Appeal clarified that employers remain responsible for such costs even if there is an “intervening cause” for the work-from-home expenses (e.g. the government issues a “stay-in-place” or “quarantine” order). (Thai v. IBM)
Employers have several options for ensuring compliance with Section 2802 and mitigating risks associated with its requirements. Employers may choose to take on the responsibility for providing as much necessary equipment as possible, such as providing computers, phones, or any other materials that are needed for the employee to perform the job, eliminating any additional “necessary expenditures” that the employee may need to incur. Employers should do a thorough analysis to determine all equipment or services possibly required for an employee to perform their job functions and should detail to the employee how each such expense will be covered by the Employer. For example, an employer may have a policy stating that it will provide a computer and all technical hardware required to allow the computer to connect to the Internet. The same employer may have a reimbursement policy that allows employees to submit for reimbursement expenses related to internet services or other connectivity expenses (e.g. phone bills).
After addressing all necessary expenses, employers may state that no other expenses should be necessary to perform the job. However, employers should still provide instructions for how employees should handle expenses that may not be specifically addressed in the policy (e.g. a request procedure). In response to any such request, the employer may either (i) provide such equipment or reimburse the employee for their expenses to obtain the equipment, or (ii) confirm that the equipment is not necessary and provide instructions for how the employee can conduct their job without such equipment. Such a policy will not reduce all risks under the statute, but employers will be able to adopt a policy and practice that helps avoid circumstances where an employee may claim that the employer failed to reimburse a necessary business expenditure.
As a reminder, “Necessary Expenditures” includes not only costs for remote work, but all costs that employees may incur, including, but not limited to, travel expenses, training, and even attorneys fees that an employee incurs as a result of the discharge of their duties. If you have questions about whether a certain expense is a reimbursable “Necessary Expenditure,” please contact your Kunzler, Bean, & Adamson attorneys.
Other Considerations for Remote Work and Remote Work Policies
In addition to ensuring compliance with Section 2802, employers should also be mindful of some other areas of concern related to remote work, some of which may also be addressed in a Remote Work Policy.
– Remote employees may be eligible to receive workers’ compensation, even if the injury or occupational illness occurs at home. Employers should clearly specify job duties, work hours, and break times to avoid liability for injuries that are not work-related. Employers should specify when workers compensation applies as well as a proper reporting structure. Finally, employers should discuss the remote work circumstances with their insurance broker to ensure that there are no potential surprises when a work-related injury or occupational illness occurs remotely.
– Occupational Safety and Health Administration (OSHA) policies, and comparable state-related policies, should apply to remote workplaces to ensure that the employer provides a healthy and safe workplace.
– Employers should ensure that they account for remote employees properly. For example, in counting employees for purposes under the FMLA, employers should count remote employees toward the worksite they report to or the worksite from which they receive their assignments.
– Employers should implement a Remote Work Policy that will assist the employer in ensuring that both the employer and employee are able to meet the commitments and policies in the Employee Handbook, including policies related to disability and religious accommodation, anti-discrimination policies, and other policies related to wage and hour requirements.
– Employers with a remote workforce are still responsible for displaying all required notices and posters. In addition to postings at any physical worksite, in distributing its policies to remote employees, employers should consider providing electronic notices and sending physical postings to remote employees’ worksites.
– Finally, employers should remember that the USCIS’s temporary rule allowing for remote I9 document verification expires at the end of July. Employers will need to either conduct physical inspections of all verification documents or strictly follow USCIS’s new guidance, which permits E-Verify employers to remotely verify identity and employment authorization documents.
If you have any questions about mitigating risks arising from the remote work environment, or if you would like assistance in drafting your Remote Work Policy, please contact your Kunzler, Bean & Adamson attorneys.
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