As a society, Americans are finding more opportunities to work from home. In fact, the work-at-home trend has been growing steadily over the past two decades. While this trend creates opportunities, it also creates problems for both employees and employers.

Have you seen emails claiming to offer work opportunities that provide thousands of dollars of monthly income in your spare time while working from home? Many of those emails are scams. Employees should watch out for offers that make unrealistic claims. Those offers may simply be trying to get personal information to use in identity theft. More likely, the email is simply a disguised sales pitch. Regardless, neither are offers most job hunters welcome.

Some websites try to sift through the at-home work offers to present only the most reliable ones. One of those websites is: http://www.flexjobs.com. Flexjobs makes the top one hundred list of companies who offer the best quality telecommuting jobs. According to the list, some of the top telecommuting industries are: healthcare, sales, marketing, information technology, and education.

Working from home can test how we apply our employment law regulations. For instance, can at-home workers be classified as independent contractors, or are they employees? Generally, employers want to pay workers as independent contractors because employers need not pay for workers’ compensation insurance, withhold taxes, pay overtime, and adhere to break regulations, etc. for independent contractors. The tests that determine whether a worker is an independent contractor or an employee are fairly complicated and fact intensive.

Essentially, an independent contractor controls the manner and method of completing a job. On the other hand, an employer controls how, when, where, etc. an employee does the work. For example, an attorney who has his or her own clients works as an independent contractor. In that case, an attorney can elect to work from home and the client will have no say about that. In addition, the client does not need to worry about whether the attorney is working overtime hours or is taking meal and rest periods. In contrast, an hourly worker who works from home sorting through and organizing emails for several managers of a business is probably a non-exempt employee. In that case, the employer will need to abide by applicable labor laws, such as: break times, minimum wage, overtime premium pay, wage withholding, etc.

Employers, who have work-at-home employees, lose some control over work product because no manager is on site to make sure that the work is getting done. In those cases, a wise employer will have systems in place to monitor work efficiency. In our example above, the employer might require the employee to read and organize 30 emails an hour. Depending on the situation, many other methods of employee monitoring can apply.

Monitoring work schedules and work hours may also be a very important issue. If an hourly employee works more than 8 hours in a day, the employer must pay overtime in California. That same California employee will be entitled to at least two rest periods and a meal period during that shift. If the employee works through those break times, the employer will be liable for additional penalties and wages. One way of helping to ensure compliance with overtime, rest period, and meal period regulations is to have an online time clock. Again, without a manager present, ensuring that an employee is actually working the hours that are tallied in the online program may be a challenge.

Working from home is not the norm, but it is becoming increasingly popular. Commonly, we see good at-home work opportunities, but workers seeking those jobs must be careful of scams. Likewise, employers need to carefully navigate the world of employment regulations after adding at home workers to its roles. Employers need to decide whether those workers are independent contractors or employees. If they are employees, then the employer must put into place systems and policies that will check work efficiency and monitor adherence to employment regulations.

S. Ward Heinrichs, Esq.
Employment Law Office of Ward Heinrichs
4565 Ruffner Street, Suite 207
San Diego, CA 92111
858-292-0792
(858) 408-7543 (fax)