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Watch Out For These Legal Pitfalls When Working With Remote Employees

HR & Compliance

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Updated on:
April 11, 2024
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Updated on :

April 11, 2024
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Watch Out For These Legal Pitfalls When Working With Remote Employees


In the last 12 months, we saw a paradigm shift in the way organizations operate globally. Remote work – a term that was once a part of many perks companies promised, became the new normal in no time. While the world was gradually warming up to the remote work model, the 2020 pandemic forced the immediate acceptance of that culture.

The concept of remote work is not new to organizations worldwide. With constant technological innovations and digitization of businesses, many companies have opted to hire employees who work remotely, often in a different country, or set up remote teams in certain countries. However, employing remote workers or setting up remote teams come with many legal challenges. Therefore, it is important to know those legal pitfalls before you formalize your remote work policy.

Why Do We Need Remote Work Policy?

A firm work policy not only helps in keeping employees disciplined and in sync with the company’s culture, but it also saves you from landing into legal troubles. Similarly, companies need to have remote work policies for the smooth functioning of their employees.

Here are a few points one should be careful of while formalizing the remote work policy:

1. Discrimination or disability-related issues

Companies often forget about their remote employees, leading to non-compliant management and legal trouble. For example, if you have a working mother working remotely for your company, she may need support, flexibility, and time-off to look after her children. If you’re not extending the backing as you would do for your in-office staff, it can lead to a case of sexual discrimination.

Similarly, if you have an employee with a disability who needs to work from their reasonable accommodation under ADA, you need to provide the employee with appropriate support. Ignoring such employees means you can face a disability discrimination lawsuit. So, it is essential to have a remote work policy in place to support these employees.

2. Watch out for the work environment.

When your employees are in the office, you take care of the work environment and ensure it is safe for them to work. Similarly, when employees work remotely, you need to review their work environment and issue approval only when you find it safe. Remember, if they are hurt although working remotely, the onus lies with you, and you may face legal consequences for ignoring your responsibilities.

3. Privacy and security issues

When employees work remotely, all communication and information exchange occurs in a decentralized environment. This means sensitive data and information exchange happen over wireless networks. Thus, privacy and data security should be the topmost concern of your company. Ensure that everyone, including your remote employees, knows your privacy and security policy and follows them. Have a strong Information Security team to enforce the policy across the organization. It is a good idea to have your remote employees use a virtual private network or VPN, which can keep their web browsing secure. Additionally, ensure protection for the data on personal computers by encrypting hard drives. Have strict measures in place so that everyone follows them.

4. Payroll issues

Payroll issues can be another potential area for a legal problem, especially if you have remote employees working in multiple states or countries. Ensure you are following the minimum wage requirement to avoid any legal consequences. Check with your payroll department or your payroll provider to ensure you comply with the laws. Know details about payroll deductions, payroll tax calculation, overtime calculation, payday frequency requirements, etc.

5. Know the international employment laws

If you’re hiring employees from a different country, ensure you adhere to the local labor laws and determine if you need to register in that country to avoid any legal troubles later. Suppose you don’t have an HR department. In that case, it is a great idea to work with a professional employer organization (PEO) or an Employer of Record (EOR) familiar with the local employment and labor laws.

6. Worksite closures

Another issue that you should address in your remote work policy is what is expected of a remote employee if he/she ends up working when the office is closed due to some reason. If an employee has worked during this period, the organization should pay the employees for invested hours. So, make it a point to spell out the organization’s expectations of the employees in a similar situation.

7. Hiring and interviews

Be mindful of the language you are using while hiring or interviewing a candidate for a remote position. Watch out for the usage of words as it might be offensive for a certain section of people. For example, in Massachusetts, employers need to state the compensation figures upfront when hiring. Asking employees about previous salaries can also bring in legal trouble for you.

Additionally, you shouldn’t be asking questions regarding sex, caste, family status, pregnancy, country or origin of birth, ethnicity, color, sexual orientation, or religion. Ensure the interviewers are aware of these elements to avoid any legal troubles.

8. Consider reimbursement requirements

Most countries need to reimburse employees for certain amenities that they need to use for work. The law differs from one country to another, so consider the country’s law where your employee resides. For example, in Germany and France, employers typically need to reimburse the home office set-up and maintenance costs like internet access or access to specific tools. Again, in countries like Switzerland, employers may even need to contribute towards the employee’s house cost if the employee needs to work from home in the absence of any suitable workplace.

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Other things to keep in mind while hiring remote employees

  • Determine the positions that are suitable for remote work and mention them clearly in your remote work policy. State upfront if you don’t have any remote compliant position to avoid future remote work requests.
  • Define clearly how a remote employee is expected to communicate to a coworker and what’s the time limit to do that.
  • If an employee is working remotely, define the work hours and availability clearly. If employees are in different time zones, fix each employee’s schedules or let them fix their schedules. Either way, state it clearly in your remote work policy.
  • Specify how you will measure the productivity of the remote employee.
  • Remote employees need specific tools to complete the task. Mention in your remote work policy whether you will be providing them or the employee needs to procure them, and you will be reimbursing.

The Takeaway

While remote working came as a response to the pandemic, employers consider remote working to bring in flexibility, attract top talent, and manage operational costs. Remember, remote hiring is a long-term strategy and can be a win-win situation for all with careful planning. Knowing about these scenarios and how to avoid them will keep you out of any unwanted lawsuits.

About the author

Catalina Wang is a Human Resource Consultant. She manages recruitment, onboarding, and contract administration staffing for many organizations and remote teams. She’s passionate about efficient HR management and the impact of tech on hiring practices.

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