By Laura J. Maechtlen

Many employers are exploring the idea of flexible work environments; indeed, some would argue that they are the “future” of the modern workplace.  The reasons are obvious:  technological advances, an increased millennial population, demands for work-life balance from employees, and an ever-competitive global marketplace, require corporate America to re-think methods and manner of performing work.   

State and local legislators are also interested in the issue of flex work.  Recently, Vermont became the first state in the nation to pass a law allowing employees to request flexibility at work, and San Francisco recently passed similar legislation.   Both laws are effective January 1, 2014.  Comparable federal legislation was introduced in 2009 and referred to subcommittee last year.

What Is A “Flexible” Work Arrangement?

The definition is broad, and can include:  

  • Results Only Work Environment (“ROWE”):  a corporate culture initiative under which employees are empowered to work whenever and wherever they want, as long as the work gets done.   
  • Flex time:  flexibility in the time employees work, including different start/end times, compressed workweeks, short-notice schedule changes, changed seasonal hours.   
  • Flex location:  flexibility in work location, including telecommuting or other work location options.   
  • Flex scheduling:  flexibility in how employees manage time, including self-scheduling, shift trading, and allowing periods of uninterrupted time.    
  • Flex hours: changing employees typical schedule to reduce, amend or alter the number of hours worked, including reduced hours, gradual return to work, and job sharing.
  • Flex careers:  variety of career options to advance within a company or industry, including career “lattice” (e.g., employees are allowed to move in several directions rather than just upward), sabbaticals, and phased retirement.   

Top Ten Issues Faced By Employers Instituting Or Managing Flex Work

Employers are often vexed with the multitude of legal issues they face instituting or managing flex work environments or arrangements.   We summarize some of the top issues here, and propose some solutions for employers. 

Issue One:  Ad Hoc Administration Of Flex Work Arrangements       

In many cases, employers lack policies or procedure for administering flexible work arrangements, believing that they are an immaterial change in work assignment, or a temporary solution.  However, the informal nature of some flex work arrangements can lead to inconsistency in granting requests for flex work, or in the management of employees.  More importantly, flex work is arguably a term and condition of employment.  Without consistency, employees could perceive that flex work arrangements are administered in a discriminatory fashion.

Proposed Solutions:  Flex work arrangements should be thought of as a job assignment.  There should be legitimate, objective business standards clearly articulated for eligibility, either in a written policy applicable to work groups, or in agreements with individual employees (or both).  Employers should clearly communicate to all employees how they can request flex work, the employer’s ability to change or discontinue flex work “at will,” and how flex work arrangements impact other company policies or provision of benefits.   To the extent the employer uses participation in flexible work assignments as a criteria on which other employment decisions are based (e.g., employees on a flexible work schedule are not eligible for one or more benefits), the employer may be susceptible to a disparate impact claim if that policy adversely affects a group of employees in a particular protected status.

Issue Two:  Timekeeping For Non-Exempt Employees

The basic rule that often impedes non-exempt workers from using flexible work arrangements is the fact that non-exempt employees are subject to weekly—and sometimes daily—limitations on the amount of hours they can work, without earning overtime.  In addition, employers are required to accurately record all time worked by non-exempt employees.  Without direct supervision, it can be more common for non-exempt employees to work overtime.  In the worst case scenario, non-exempt employees who are not carefully managed can work unauthorized overtime or off-the-clock, and without accurate records maintained by the employer.  

Proposed Solutions: Structure flex work so that employees do not work overtime and, if they do, ensure the time is accurately recorded.  Ensure your timekeeping procedures are clear, published and acknowledged by employees.  If non-exempt employees have flexibility in work location, ensure your policies are clear about when they are allowed to work, how to obtain authorization to work overtime, and that off-the-clock work is prohibited.  A process whereby employees with flex work locations certify their time records each pay period, including an attestation that of the accuracy of those records, is recommended.  Finally, employers should consider whether to conduct periodic audits to ensure the accuracy of time records. 

Issue Three:   Scheduling For Exempt Employees 

Exempt employees present a different set of problems when on flex work arrangements, because they must be compensated on a salary basis.  Their earnings are based on the quality of their work rather than the hours.  By the nature of exempt work, exempt employees should be allowed to work in a flexible manner, as long as they get the job done.  For flex work arrangements, however, some employers may be tempted to track the hours worked by exempt employees, or place these employees on a specific “schedule.”  To do so in some situations could imply that exempt flex workers are non-exempt, and the exemption can be lost.

Proposed Solutions:  Ensure that you know beyond a doubt whether the employee who is planning a flexible arrangement is truly exempt (or not).  Remember that tracking the hours of exempt employees can be risky.  It could imply that they are hourly employees, and they may be legally treated as such.  Therefore, track exempt employee hours for business reasons only (e.g., to bill clients for time spent on projects, or to ensure employees are present during key meetings or core hours).  Ensure that your policies do not contain language implying that a salaried employee may be docked wages if they fail to work a set schedule or certain number of hours.  Closely follow federal and state laws when reducing exempt employees pay for time spent away from work.   

Issue Four:  Reimbursement For Legitimate Business Expenses

Employees with flex work locations do not perform their work in the office.  Accordingly, issues can arise regarding whether the employee has all the supplies (s)he needs to fulfill his or her duties.     

Proposed Solutions:  Employers should take care that the an employee who works out of the office has all the supplies that he or she needs to fulfill his or her duties.  In most cases, employers need not reimburse telecommuting employees for expenditures that are solely for personal use.  Employers may provide the necessary supplies (e.g., laptop, printer, paper, pens) or some sort of allowance or reimburse the employee for supplies purchased.  Employers should provide a mechanism by which employees can submit business expenses for reimbursement for work performed out of the office, and should be careful to stay aware that some employees may not work from solely one location.     

Issue Five:  Reasonable Accommodation For Employees Living With A Disability 

Employers who allow employees flexible workplace arrangements may establish a precedent that flex work is—per se—a reasonable accommodation for employees living with a disability.   Likewise, if an employee has been allowed to work from a home office, an employer may be responsible for providing the same reasonable accommodations for the employee’s home office as it would for the employee’s workplace office (e.g., providing ergonomic improvements). And, regardless of whether your company has a formal flex work program or policy, be aware that some laws may explicitly recognize certain forms of flexible work arrangements as a form of reasonable accommodation.  For example, according to the Equal Employment Opportunity Commission, reasonable accommodation includes allowing an employee to work at home.  In addition, some states law expressly recognize reduced schedules, and work from home arrangements as forms of reasonable accommodation.  

Proposed Solutions:  Employers should carefully review all requests for accommodation while keeping in mind available and applicable flex work arrangements the company has provided to other employees.  Be consistent.  Of course, an employer is not required to provide any form of work arrangement that is unreasonable, or that would constitute an undue hardship.  Indeed, not all essential job functions can be performed out of the office.  Many jobs require that employees interact face-to-face, to share information, collaborate or ensure the work is completed.  And, even if the essential functions do not require face-time, some flex work may not be the most “reasonable” accommodation offered.   Keep in mind, however, that allowing flex work may be a reasonable accommodation if the person’s disability prevents successfully performing the job on-site and the job—or parts of the job—can be performed at home without causing significant difficulty or expense.

Read more later this week on the Employment Law Lookout for the rest of the “Top Ten” flex work issues and tips on how to solve them!