David Harmon: Hi, I’m David Harmon.
Mariya Gonor: And I’m Mariya Gonor.
David Harmon: And we are the Employment Strategists. Today’s episode, our third episode, is called How Remote Will You Go? where we discuss a lot of issues related to remote and hybrid work.
Mariya Gonor: The hybrid work situations continue to be a hot topic for employers and employees, and we will get into the statistics on this issue in a little bit. But what inspired this conversation was a recent article that came out where a Texas man was faced with charges of insider trading. When he traded on the information, he learned by eavesdropping on his wife’s calls.
David Harmon: Yes, his wife was on a Zoom call for work, working remotely from their dining room, and he walked by, listened, and then traded on the information. She was in the financial services sector.
Mariya Gonor: As a result when he told her that he made about, nearly, I want to say, two million dollars from listening in on her phone. phone calls. He told her and explain that he felt that she worked really, really hard and he wanted to make the money so that she wouldn’t have to work as much.
David Harmon: Well, it didn’t work out so well for the two of them in that the SEC went after him. and she divorced him.
Mariya Gonor: Yes, she got fired and then she divorced him. So aside from the fact that we’ve learned that work from home causes divorces, we now also understand that certain precautions need to be taken by employees when they work from home. So, in today’s episode, we’re going to cover the considerations that are present for employers and employees as we typically do and discuss the future and some strategies in connection with it.
David Harmon: So, the current landscape right now in the workplace is that employees are working fully on-site in the office. Employees are working in a hybrid arrangement where they come in for a day or two. And they work remotely. Or another is a complete remote arrangement where they are essentially working from home. or in some remote location. And the statistics show that that has been increasing over time. Where the variation of the different arrangements has really gone up and there has been much more hybrid and remote work arrangements. Although today, there are many companies that are now requiring their employees to come back. to come back into the workplace and be on site full-time.
Mariya Gonor: It’s a big shift from, obviously, as a result of the pandemic. Pre-pandemic in 2019, about 7 percent of all employers offered fully remote work and then offered some remote work arrangement. Nowadays, only right under 60 percent of employers are fully back on-site. So, it’s a big difference. The tension though, we discover comes when we look at job seekers, 87 percent of workers looking for a job, prefer some kind of work-from-home arrangement, obviously due to its flexibility and the cost savings that result for employees.
David Harmon: In addition, 28 percent of all new job postings in January 2023. We’re advertised as remote.
Mariya Gonor: And at the end of 2023, what we saw was a significant push by various companies to bring employees back into the office. And now that we’re in March of 2024, we see that that hasn’t quite happened that way. Some of the companies don’t have a lot of teeth with these policies, and Lots of employees are giving a lot of pushback.
David Harmon: I think there’s also been a very interesting, it’s somewhat comical, in that Zoom has required employees to come back to the workplace. Zoom, the very means by which remote work is conducted in many instances, right? All the meetings and discussions over Zoom.
Mariya Gonor: So, you’re saying even Zoom employees are tired of Zoom meetings? Is that what we’re at this point?
David Harmon: I think that that’s where we’ve, that’s where we’ve arrived.
Mariya Gonor: Well, what we see from this is that remote work, hybrid work, some form of it is continuing to be a prevalent issue. I think it’s here to stay and it’s going to continue to create challenges for both employers and employees.
David Harmon: We’re going to cover some of the challenges that employers are confronted with as a result of remote work-from-home arrangements. Those include jurisdictional confusion, what law will apply. harassment policies in the digital era, worker classification and Fair Labor Standard Act concerns, privacy and confidentiality, security concerns. And then, of course, there’s the practical engagement and team building, as well as supervision, accountability, and mentoring. That’s a lot. But there are, it really covers a wide swath of the working arrangement.
Mariya Gonor: So, let’s dive right in into the jurisdictional issues.
David Harmon: So, the adage, in real estate that, that governs this is location, location, location.
Mariya Gonor: You have to know where your workers are. And if you don’t know, you can get in a lot of trouble with the governing entities in the various jurisdictions. But it’s not something that employers in the traditional sense had to think about all that much. I suppose if you’re in a tri-state area, you might have some employees that they work in New York while living in New Jersey, Connecticut, PA. But now you may have an employer located in New Jersey, employing people out in California or an employer in Illinois, employing people out of Texas. So that all raises very significant and expensive questions for employers. For instance, if you have one employee in a faraway state, do you need to qualify to do business in that state?
David Harmon: Employers should consult with their corporate counsel to determine whether there is sufficient nexus to require qualification registration in that jurisdiction, So, that the company is fully authorized to conduct business in that jurisdiction. So, it’s a matter of does it rise to the level that of requiring qualification in that state.
Mariya Gonor: Whether it has sufficient nexus, yeah. And the complicating issue arises for employers because you have to look into that forum state’s rules to determine what it is that you need to comply with. For instance, and we’re going to cover that in a little bit, but each different states have their own workers compensation laws. And you have to look to those states laws to determine whether one employee is sufficient trigger to require you to add an endorsement to your workers compensation policy in that state.
David Harmon: In addition, you have pay transparency laws as well as job posting requirements. New York City has a job posting requirement that involves a salary range. And this varies from state to state, municipality to municipality. And if you’re going to be deemed to be conducting business in that jurisdiction, wherever it may be, you need to comply with the requirements.
Mariya Gonor: And it becomes a very expensive question for employers for two reasons. Any employer who is multi-state has an option to either try to comply with the most stringent legal requirements in the state where they operate, for instance, if you have offices in California and also operations in Texas, you may look to California’s laws because they’re extremely pro-employee and extremely tough on the employer and comply with those. And then by default, you would then comply with many of the provisions in Texas, New York, New Jersey, or what have you, or engage in a very frequent and detailed analysis in each of the jurisdictions to make sure that you conform with the laws in those jurisdictions.
David Harmon: I mean, all of this is, is, uh, in the direction of managing the risk, managing the exposure. If you are an employer, you need to comply with the applicable employment laws. And so it’s an analysis of where you’re operating, the level of operation, and again, it’s the word nexus.
Mariya Gonor: It’s important to remember that we live in a federalist country, so we have laws on federal level, the control, employment, relationships. We also have laws. And I think those issues have never been more prevalent in employment law as they are now, because as an employer, you have to look to make sure that you’ve complied with federal law, but then also the state laws in your home state, as well as, um, the states where your employees are located whenever that’s triggered. So, to help with these complicated issues, what David and I have done for our clients is we put together a checklist. I am a huge fan of checklists.
David Harmon: Yes, you are.
Mariya Gonor: I love my checklist. And you know what, I have support for it. I am a big fan of the Atomic Habits book by James Clear. And he has a whole section about how important it is to have checklists. So, I have totally adopted that in my practice, but anyways, after that shout-out, we’ve put together a checklist that identifies some of the issues that the employer needs to look at when they’re a multi-state or have employees working remotely in various states. So, some of the items on those checklists are, one, are you complying with the hiring practices? Do you have to comply with hiring practices? That’s The ban the box rules that may prohibit background checks or inquiries about a potential employee’s criminal past before they get the first interview. That’s a thing that exists in some states and may not exist in others. David already talked about paid transparencies. Are you complying with the paid transparency laws in the states of about 10 states at this point have paid transparency laws, while many others do not. If you are on the forefront of A.I usage, you have to be mindful that some states have specific requirements as to when employers are permitted to use A.I and whether employers are doing the proper monitoring slash auditing of their A.I practices. The next item on our checklist is Withholdings and payroll taxes. Another item is whether you’re complying with the worker’s compensation requirements, as I’ve stated a few minutes ago. And the final one is the anti-harassment laws and discrimination. Are you adjusting Your practices, or do you have state-specific practices for anti-harassment and discrimination? Those are just a few checklist items that you need to be mindful of when you are practicing out of state.
David Harmon: So, on the federal versus state law issue an example of the need to consider which law applies And how best to engage with employees on that very issue is in the non-compete space. There is a wide range of rules and regulations regarding non-competes across many different states. California has one. New York has different ones. And there are different, status of those laws are also ever evolving. In addition, the Federal Trade Commission came out with a proposed ruling to outlaw non-competes. We don’t really know where that’s headed. But yet we’re expecting a new ruling coming out in April of this year. And so that’s an ever-changing factor in the landscape regarding, non-competes. Which really ties into this issue of where are your employees located?
Mariya Gonor: I think I’m gonna get either a mug or a t-shirt that has that question. Do you know where your employees are? Just because I’m a little bit of a law nerd, and I feel like that’s just So, so on brand for me, you know,
David Harmon: that’s good. I’ll take a large.
Mariya Gonor: Okay, you got it So the non-compete is actually such a hot button issue. I think there’s so many clients that consult with us about whether or not their non-compete is enforceable on both sides, employers and employees. And if the FTC does adopt their proposed rule that they’ve published last year, which also was extremely controversial, I think they got like thousands of comments on that rule. So, if they do adopt that in March, in April, I’m sorry, that’s going to It’s going to take away a lot of our business, David.
David Harmon: Well, I don’t know. I think there’ll have to be a lot of, uh, changes made to the non-competes or to agreements, whether they’ll be excised from agreements. For example, California is now requiring employers to send notices to employees who were subject to non-competes to notify them that their non-competes are no longer enforceable So there’s going to be compliance requirements as the laws are changing.
Mariya Gonor: Yeah, it’s definitely a very burdensome project for employers. So, let’s take an example. If you’re an employer who is based in California, and then you have an employee who is located in Texas. Texas allows, and I don’t know why I keep picking on Texas, let’s do another state, let’s do North Dakota. North Dakota allows non-competes, right? So now you’re a California employer with an employee who is a high-level employee for you in North Dakota. Do you have to notify them that their non-compete is no longer valid?
David Harmon: Well, the issue is what the, uh, the state we are operating, what the laws are regarding the non-competes and whether, where you are actually located, your bases, are you in a position, are you able to enforce a non-compete or not enforce a non-compete, depending upon where the worker is located.
Mariya Gonor: Yeah, so I think in this case, the North, did I say North Dakota? See, the reason I pick on Texas is because I can remember Texas, but all right, North Dakota will allow these non-competes. So that’s what the effect of the non-compete is going to be felt. So, I would argue, yeah, that North Dakota law would apply to this specific employee.
David Harmon: Another, another thing to consider is that it, it all depends also on what the agreement states. Uh, from jurisdiction to jurisdiction. So, I have recently completed a transaction where there was an employment agreement. The employment agreement was from a, an East Coast state and California was where the employee resided, was going to work, was not going to leave California, was going to work there consistently and, in that agreement we were able to negotiate that only California law that would apply California would have jurisdiction. And so, the rules and regs related to non competes was going to be California-centric.
Mariya Gonor: And the employer agreed to that? I’m pretty impressed.
David Harmon: The employer did agree to that.
Mariya Gonor: Wow. That’s impressive.
David Harmon: Yes. Well, this was a person that they really wanted to bring in. And it was worth it for them to compromise that.
Mariya Gonor: Yeah, so I think you make a very good point that a lot of the things that we discussed could be altered by agreement. Not everything, but a lot of the stuff could be amended. All right, moving away from the very dense jurisdictional issue, we’ll go into another acronym, because as employment attorneys, we love our acronyms, and that’s FLSA, the Fair Labor Standards Act Compliance. When you have remote employees who are not exempt, meaning you have to pay them overtime, you have to keep track as an employer, have to keep track of their hours. And it is actually a significant enforcement priority for the Department of Labor for this year is misclassification of employees and also making sure that all of the overtime is properly paid. So, for your remote nonexempt workers, an employer must make sure that there is some process by which the hours worked is being tracked. In connection with that, you also have to make sure that the employees are provided with their appropriate rest breaks, which is extremely hard to do in a work-from-home scenario.
David Harmon: While we’re on the topic of determining whether employees are exempt or nonexempt, we also have to address the classification issue of whether employees are actually employees or independent contractors and that’s becoming a very significant separate body of law.
Mariya Gonor: Absolutely.
David Harmon: Where companies are treating employees for all intents and purposes as independent contractors and that’s only going to wind up in a situation where the employers are subject to payroll taxes that they’re not paying, as an example. And many other employee-related benefits and requirements that are not being complied with and blow up that arrangement So on this classification issue, it’s important for employers to consult with counsel to do a proper assessment of whether you are actually engaging with independent contractors or employing true employees.
Mariya Gonor: And it’s not to self-advertise, I promise, but this issue is immensely complicated and could be immensely expensive. Again, that’s another enforcement priority for the DOL. It is being enforced on the federal level and the state level. And if you watch the news, there have been a lot of cases involving Uber, Lyft. Just focusing on gig economy type of companies and real complicating factor for this is that states.
David Harmon: Mariya, that’s the IRS inserting itself into our podcast indicating don’t forget about us. There’s the 20-part test and other tax analysis that has to be done on the independent contractor employee [00:17:00] differentiation. I think that’s important to consider.
Mariya Gonor: That’s the additional complicating factor. Yes, that it’s an IRS also state that have all different tests amongst themselves, well some follow the ABC tests, other follow their common law. And there’s also a test on the federal level that’s promulgated by the DOL, which was just updated this year. Yes, the IRS rang and also this is to wake everyone up who fell asleep as soon as I said FLSA.
David Harmon: Oh, I hope no one fell asleep, Mariya. This is too stimulating.
Mariya Gonor: Okay, I think we’re done with our acronyms, what do you think?
David Harmon: I’m gonna reserve on that.
Mariya Gonor: Okay, fair. All right, moving on right into another complicating factor for work from home, which is Anti-harassment policies and harassment in the workplace in the digital world. So quick question for our listeners and you can answer either aloud in your cars or in your own heads. Can you regulate what an employee has on their workstation in your office? Let’s give everyone a second to answer, come up with their answer. David, you can answer for me.
David Harmon: Well, provided that you’re using a company-issued device, and it’s running through the company server. Yes.
Mariya Gonor: Absolutely. So, our work has changed. Our office has changed. Maybe 10 years ago, we were talking about how appropriate or inappropriate it is to be having corporate, Meetings and Hooters or other restaurants that might have some things that employees might be offended by now we’re having a discussion as to what an employee can have visibly on camera in their home office. So, an example could be you get on a zoom call with somebody, and in the background there is a Confederate flag.
David Harmon: Or someone who lives with you is, um, just out of the shower and walking through the room on their way from the shower to get dressed. We all know stories about these types of Zoom errors.
Mariya Gonor: Somebody, yeah, somebody who’s done that. So now other employees on your call might potentially have harassment claims. In fact, in my prior example with a Confederate flag in the background, an employee could certainly have a valid harassment claim. So now it is important that employers issue specific policies and specific checklists, back to my checklist, but specific policies to their employees instructing what is permissible or not permissible, appropriate or inappropriate in their new workspace, which means that you’re regulating what’s in their home, but that’s what the law is right now.
David Harmon: It’s the regulations that are applicable, uh, are also varied state by state. So that ties us back into that analysis that an employer has to conduct.
Mariya Gonor: And I totally lied about being done with the acronyms because the EUC has promulgated guidance that takes effect this year. That’s specifically addresses that very issue. What is visible on camera when you work from home, out of your home?
David Harmon: So, employers have to look at their policies and employees have to be mindful of those policies and make sure that their workspace and what is visible on the laptop uh, when they’re on these calls, to make sure that they’re not tripping the wire on those policies, which are linked to requirements under the law.
Mariya Gonor: So, this segways us quite nicely into a discussion of professionalism in the workplace when you are working from home. David if you recall early in the pandemic there was a scathing report that published by the judiciary, basically, the judge’s complaint that attorneys were wearing God knows what and judges could hear flushing toilets in the background, crying babies, barking dogs and how that was entirely unprofessional for the workplace. So, I think we’ve gotten away from that somewhat. But we still see employers complaining that sometimes employees have crying babies on their laps during Zoom calls, or, are dressed inappropriately, or just are acting in a way that is not the kind of conduct that you would allow in the office.
David Harmon: So, within employee handbooks there are dress code policies and that’s been a typical practice, but now there should be dress code policies for the remote working space and how employees should be dressed while on Zoom calls. It doesn’t necessarily mean that you have remain in a suit while you are working off-camera. But while you are going on camera and engaging, whether it’s with clients, colleagues, anything that has to do with appearing in the workplace, a more formal attire. And that can be business casual as well. But other sweat suits or gym attire is more appropriate.
Mariya Gonor: A prudent employer could also consider having a professionalism policy, a written policy in the handbook, or a standalone work-from-home professionalism policy that sets forth the expectations that they have of employees while working from home, while appearing on calls. And when you have a written policy like that, there is nothing wrong with the employer then enforcing this policy and reprimanding employees who are deviating from these expectations, whether it be through their conduct or attire.
David Harmon: I think these employees also have to be mindful that they’re representatives of the company. And the company is mindful of what their quality assurance is in their presentation. And the presentation also includes how one is attired.
Mariya Gonor: Oh, absolutely. The other day we were on a Zoom call with an adversary who was wearing a t-shirt with a pretty inappropriate slogan on it. And then.
David Harmon: I was on one where the attorney on the other side, for some reason thought that it was okay to look as though he had just woken up in a bed and he was in a bathrobe slouched in a chair.
Mariya Gonor: Yeah. And so, you don’t take people like that as. Seriously as you would people who are dressed professionally and I think if you weren’t gonna wear something like that to an office Probably not okay to wear the same on a call, but unfortunately not everybody exercises good judgment so this is what when employers can come in and mandate that employees do, in fact, exercise good judgment.
David Harmon: So again, it’s important for employees to know what’s in the handbook, what the policies are, and for employers to have the appropriate policies governing the workplace, both in the workplace and remotely.
Mariya Gonor: Okay, the final acronym that I’m going to use today, and you can hold me to it, is the accommodation under the Americans with Disabilities Act. In the past, this was a hot topic discussion because employees would seek work from home as an accommodation for their ADA condition. And very frequently, employers would take the position that the essential function of the employee’s performance was to be in the office. Now, as a result of being forced to work from home over the two years or so of the pandemic, we have seen that for many, many office workers, that is no longer so. So, prudent employers should take a look at their job descriptions and job requirements to ensure that if truly working in the office is a key function of someone’s job, that’s reflected in their job description in your policies.
David Harmon: Looking for strategies, as we do, for employers and employees, we’d like to talk about, just to conclude, the best practices. So, best practices, one is for employers to do a comprehensive work from home remote policy analysis and review and make sure those policies and agreements dovetail with the requirements for this changing work arrangement.
Mariya Gonor: Same really goes for the employees. You should review whatever the policies that the employers have in place to the extent your employer has such policies in place and ensure that you comply with that. Because as we’ve talked about before, unless there is a contract, most states, most employers are at will, and non-compliance with the policies could be a reason for termination. As we started at the top of our episode. Confidentiality is an important one. So, if you have a permanent work-from-home situation, you got to make sure no one is truly is dropping on your calls and you’re not just inadvertently disclosing private confidential information of the employer.
David Harmon: Another thing to do is to make sure that the device policies are up to date and contemplate the remote working arrangement. Very important to have those policies. Phones, laptops, any other devices, and recordings.
Mariya Gonor: And this again goes to the employer policy, but you absolutely have to keep track of where your workers are. You also have to keep track of This is a very rapidly changing area of the law. As we were doing research for this topic, I’ve come across a couple of articles that were written back in 2020 or 2021 where the recommendation was that the employer really sticks their head in the sand with respect to the location of their employees.
David Harmon: Now though, It’s really the opposite because we should be hitting our stride. It’s been four years. We should be hitting our stride with how we handle work-from-home requests, accommodations, and policies. One of the topics that we mentioned earlier, but I think is a good topic to address as we conclude our episode is that this remote and hybrid working arrangement has put additional pressure, and or perspective on the engagement of employees, the ability to mentor. Establishing and maintaining a sense of community where you have people who are not together physically, are working remotely, and come together on a more limited basis. So, it’s very important for the policies and the practices to address that and consider that, whether that means having events that are either by Zoom or in person. When those workers are in the office or otherwise.
Mariya Gonor: So as far as an employee strategy goes, when you are selecting a job that permits work from home, do your due diligence, and make sure that the employer actually embraces this type of work environment versus tolerates it.
David Harmon: Employees should be aware that once they receive the offer, it is perfectly appropriate to ask questions. What are the opportunities for promotion? Is there a disparity in advancement of those who work in the office versus those who work remotely? Fully assess the culture of the company that you’re going to work for.
Mariya Gonor: As we said, again, in the beginning, work from home is here to stay. It offers such flexibility, such benefits for the employees. And we see statistically that employees essentially demanded in some way, form or fashion. And we also knew that it is extremely hard to recruit and retain true talent. So, this is one of those things that an employer can do quite easily to ensure that you get. The best crop of employees coming in, accommodating them with these hybrid requests or work-from-home requests. So, take a close look, consider what makes sense for your business. And we want to thank you for joining us today. We hope that you found our time together educational and at least somewhat entertaining. But please remember that nothing that we’ve discussed should be deemed legal advice, and you should consult with counsel of your choosing to get that.
David Harmon: And if you’d like to continue the discussion, you can feel free to contact us on the employment strategist at norris-law. com.
Mariya Gonor: If you’re interested in any of my checklists, we’ll be happy to share them.