Coronavirus National Emergency -- How to ensure your employees can legally work from home

Companies nationwide are being forced to confront some difficult questions

As the novel coronavirus continues to spread across the United States, companies nationwide are being forced to confront some difficult questions. With schools closing and major sporting events being canceled, many company owners and executives are grappling with the decision of whether they should send their employees home as well.

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If working from home is an option, is it an option that companies should consider during the coronavirus pandemic? If so, what are the legal implications involved?

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To be clear, during a public health crisis, ensuring the safety of employees and customers should be any company’s first priority. Yes, this has legal implications; but, more importantly, it can also truly be a matter of life and death.

If an employee is exhibiting symptoms of the coronavirus or has potentially come into contact with the virus, all necessary resources should be devoted to preventing further spread of the virus to fullest extent possible.

Now, with regards to having employees work from home, what do employers need to know?

1. Appropriate Policies and Procedures

All companies should have appropriate policies and procedures in place before authorizing employees to work from home en masse. Sending employees home with company assets and allowing employees to access customer data off-site without the necessary controls in place is a recipe for disaster.

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You have policies and procedures in place at the office, and allowing (or forcing) employees to work from home presents even greater risks in certain respects. So, it stands to reason that your company should establish and enforce standards for the work-at-home environment as well.

2. Anti-Discrimination

When instructing employees to work from home, employers must be careful to avoid making decisions that appear to be discriminatory in nature. For example, if an employer chooses to only send home employees who appear to present health risks to their coworkers, the employer must avoid asking questions or making decisions that interfere with employees’ rights under the Americans with Disabilities Act (ADA) and Title VII of the Civil Rights Act of 1964. Among other things, this means limiting inquiries with regards to employees’ specific health conditions (including inquiries that are specific to COVID-19), and it also means not basing decisions on employees’ nationality or country of origin.

3. Data Privacy and Security

From a risk management perspective, one of the biggest issues that most companies will face is the matter of protecting sensitive and confidential information. This applies to the company’s own proprietary data, vendors’ and customers’ confidential information, and employees’ personally identifiable information (PII).

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Aside from the risk of information being left out in plain view or being lost in transit, there is also the matter of network security. The vast majority of employees’ home internet connections will be nowhere near as secure as the company’s network, and this could present a major issue for companies that have statutory, regulatory, or contractual data security obligations.

4. Notifications and Disclosures

In some cases, companies may have an obligation to notify their clients or customers prior to allowing employees to take data off-site. It could also be the case that some of the company’s customer contracts prevent data from being accessed in an unsecure environment. While there may be an argument for the application of force majeure, the better course of action will most likely be to take the steps necessary to maintain contract compliance.

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On a different note, asking corporate employees to work from home could trigger disclosure obligations for publicly-traded companies. If a company’s preparations for, or response to, the coronavirus pandemic have material implications for investors, then revised Form 10-K, 10-Q, 20-F, and 40-F disclosures (among others) may be required.

5. State-Specific Obligations

Finally, implementing a work-from-home arrangement could trigger state-specific compliance obligations for some employers. For example, if a company in New York has employees who live in Connecticut or New Jersey, the paying employees for work they perform in those states could create new state tax filing and payment obligations. Different states have different paid leave laws and offer other unique employee protections as well, and companies will need to ensure that they are prepared to comply with these laws before authorizing out-of-state employees to work from home.

These are some of the most-important issues, but this list is by no means exhaustive. Ultimately, companies considering work-from-home arrangements during the coronavirus pandemic will need to carefully weigh all of the pertinent health, financial, and legal factors in order to arrive at a sound decision.

Nick Oberheiden, Ph.D., advises corporate clients in the areas of risk management and liability prevention.

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