AZBusiness November/December 2020

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Here’s what businesses need to do to reduce their risks as more employees work remotely



he dramatic increase in workfrom-home employees arose from employers’ effort to protect employees from the risks of COVID-19. What those employers didn’t think about was the added risks to their business that sprung from those good intentions. “A myriad of legal risks exist with more employees working from home – in the short term and long-term, if not permanently,” says Nonnie Shivers, a shareholder at Ogletree Deakins in Phoenix. According to Shivers, risks run the gamut of wage and hour claims, including: • Business expense reimbursements due to cell phone and other personal device/equipment/supply usage. • Off-the-clock work because it’s inherently more difficult to define the work day and prevent compensable work from being performed, but not recorded. • Enhanced risk of future disability discrimination and failure to accommodate claims as people seek to avoid returning to physical workplaces due to their and others’ medical conditions and fears of COVID transmission. • R isks of unknowingly doing business in other states when employees relocate to weather the storm or move permanently — sometimes with and often without the businesses’ knowledge, which leads to tax, payroll and paystub exposures. “When employees are not physically in the office and visible to management, it can be challenging to ensure that work time is accurately recorded,” says Coppersmith Brockelman attorney Jill Chasson. “In addition, many employers have allowed flexibility in schedules during


AB | November - December 2020

the pandemic to accommodate situations such as children learning remotely from home. This means employees are more likely to be doing at least some of their work – including responding to emails and handling phone calls – early in the morning, late at night, and/or on the weekends.” Chasson says employers should ensure that they have procedures in place to accurately capture work time, and that they have clearly communicated these procedures to employees. This can be something as simple as having employees self-report their time daily, with a daily or weekly certification that the reported hours are complete and accurate. There are also technology solutions that automatically record when an employee logs into and out of company systems. Chasson says measures like this, and periodic reminders to staff that work hours must be accurately recorded, can help employers refute any later claims that employees are owed additional pay. But that’s not the only issue employers are facing. “While employers must be vigilant to ensure employees have the ability to work safely, one of the biggest risks are decreasing productivity and morale as work from home extends further than expected given the pandemic and its unpredictable — yet incredibly dangerous — trajectory,” Shivers says. TECH TROUBLE The wage-and-hour challenges don’t even scratch the surface of other businessbusting risks. “Employees working from home on personal devices could expose their employers to the possibility of hacking

and other cyber theft,” says Sam Saks, an attorney with Guidant Law Firm. “Business owners should work with their IT teams to revisit information security policies and procedures to ensure any computers or devices accessing company systems are properly secured.” Saks says intellectual property theft is another threat to companies with employees working from home. “Employees working from home likely have increased access to company information, such as by downloading it on their personal devices that may not be as secure as company devices,” he says. “When sensitive or proprietary company information is on a private computer, it can make its way to a competitor if the employee is let go or merely careless.” Experts say companies should ensure their employment and contractor agreements contain language that protects business information, including a confidential information clause. The Arizona Trade Secrets Act protects companies if information is stolen. But to sue for lost profits, a company has to prove, among other things, that the information was truly proprietary and not easily available elsewhere.

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