The global home office: what are some of the legal risks?
For the past six months working from home has become the default norm for previously office-bound workers across the world. The longer the Covid crisis drags on, the more pundits are predicting a permanent shift to global working habits. In the UK, even those employers that previously denied flexible working to their staff by claiming it was not possible to accommodate under UK Flexible Working Regulations may find it hard to push back on post-Covid requests to accommodate such arrangements after proclaiming smooth work from home-based operations for most of 2020 and likely beyond. In Germany, draft legislation is already in the works that would give employees the legal right to work from home when possible, but would include provisions to keep home working regulated while managing provisions such as restrictions on working hours.
Employers may dream of the freedom to access a global workforce through virtual means. For employees, the dream may vary from a better work life balance to the freedom to adopt the lifestyle of a digital nomad, flitting from country to country while maintaining a steady income. The transition to a new working paradigm is likely to prove a lot messier as both firms and employers start to grapple with the legal and regulatory practicalities. In practice, spreading workforces over huge geographical distances, likely crossing multiple legal borders, while managing reduced employer control over the working environment presents a minefield of looming legal issues.
While most employees are unlikely to test the grey area intersection between home and office life quite as spectacularly as the New Yorker’s Jeffrey Toobin allegedly did on a Zoom call, the potential hazards of the mixed home/office environment are manifold.
The cost of shifting from an office to a remote workforce is likely to contain hidden costs and pitfalls for both sides, and the digital dream could suffer similar balkanisation to earlier iterations of the digital economy transition.
Consider just a small number of the issues that arise from employees working from home:
Where are my employees?
In an office-based employment scenario, employee whereabouts manages itself. If not in the office, employees’ absence will normally be documented and managed. In a remote working scenario, the employer loses this control over a basic element management tool. And while an employee may be diligently tuning in for every corporate team engagement on a video call, does his or her whereabouts at the time contain hidden timebombs relating to tax, HR, privacy or other legal issues? This could even be an issue without crossing national lines, such as with employees in the US, where states enjoy significant sway over local corporate, taxation and employment legislation.
Tax and working rights
Tax and working rights regimes are hugely divergent between different national jurisdictions. Should an employee previously based in London, but working from home in Portugal since March, be paying Portuguese income and social security taxes and be subject to Portuguese rather than UK employment law? How are public holidays, sickness or redundancy arrangements managed? How does the employer know that the employee who says he is in Portugal hasn’t strayed into a totally different legal environment in Spain for long enough to matter to the authorities?
Regulated functions
In an office environment controls on the communications channels used in the performance of regulated functions are relatively easy to enforce. A block on the use of personal mobile phones is a common rule across trading floors. This becomes effectively unenforceable once regulated work, whether back or front office, is through necessity pushed into a non-office environment. As the failure of the recent FCA case against alleged insider trading shows, Whatsapp and other mobile instant messaging chat histories are already proving impossible to police, increasing the risk of non-compliant behaviours in staff performing regulated functions.
Confidentiality and security
Pre-covid most companies were already ensuring robust data security and confidentiality arrangements were in place in the office. But what happens when your employee receives highly confidential information while sitting in the kitchen? How do you know his wife who works for a competitor company isn’t looking over at his screen or picking documents from a shared printer? Data protection regulations and confidentiality obligations don’t dissolve because an organisation’s workforce is working from home. So how do companies ensure a culture of compliance continues when they have less visibility and direct control of employees?
Health, safety and well being
Who is responsible for the safety of the employees work from home environment. Should an employer demand access to gauge the safety of a work from home office, or does this represent a gross violation of employee privacy rights? Is it reasonable to ban employees from smoking at their desks when working from home? What about “suitable office attire” when a manager’s office is her kitchen? It seems reasonable for employees to insist that corporate remit over presentation and decorum should run no deeper for an employee working from home than an insistence employees maintain appropriate form and protocol on a Zoom call. Toobin-style Zoom transgressions are likely to be infrequent, but this means judgment calls on suspending employees will often be much more complex when employees display subtle misbehaviours rather than grosser misconduct.
Clients who’ve found the transition to a remote-first organisation has worked really well are those with strong established KPIs and a culture of valuing work product rather than presenteeism. They’ve avoided micromanaging employees working from home with a focus on results.
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