Gas Prices Prompting Employers to Rethink Telecommuting, Compressed Work Weeks

With gasoline costs taking a big bite out of employees' paychecks, companies may want to take a second look at where and when employees work, according to CCH, a provider of human resources information and software and a part of Wolters Kluwer Law & Business (

Programs such as telecommuting and compressed work weeks can be effective ways to attract new hires and retain current employees, and may be particularly effective in easing some of the financial pressures employees are feeling today. Employers, however, also need to be aware of possible legal concerns that may go along with these more innovative practices.

"Currently, over 22 million U.S. workers telecommute at least once a week and that number will continue to rise due to high gas prices," said CCH Employment Law Analyst Brett Gorovsky, JD. "Telecommuting offers a win-win solution by reducing the amount of money employees spend on transportation costs, while at the same time allowing employers to reduce costs of their own."

Companies adopting telecommuting programs can achieve cost savings in total office overhead, while the positive effects of increased productivity, reduced turnover and improved morale contribute further to the bottom line. According to a CCH nationwide survey conducted by Harris Interactive, 53 percent of U.S. companies offer telecommuting programs.

The federal government could be the next major employer to make telecommuting the norm, rather than the exception. In June, the House of Representatives passed the Telework Improvements Act of 2008. The legislation would help improve the cost-efficiency of the federal government and the lives of families by allowing federal agency employees to work from home on a full- or part-time basis depending on eligibility. It mandates that the heads of each federal agency establish a policy under which "eligible" employees may be authorized to telecommute. The Senate Homeland Security and Governmental Affairs Committee has already approved a counterpart bill, the Telework Enhancement Act of 2008.

Companies thinking about starting a telecommuting program should be aware of possible legal concerns. Gorovsky identified disability issues, wage and hour issues and safety concerns as three areas that employers will want to consider, and address, in formal telecommuting policies.

"The Americans with Disabilities Act of 1990 does not require an employer to offer a telecommuting program to all employees, but if an employer does offer such a program, it must allow employees with disabilities an equal opportunity to participate," Gorovsky said. "While courts are split on the matter, the ADA's reasonable accommodation obligation, which includes modifying workplace policies, might require an employer to waive certain eligibility requirements for someone with a disability who needs to work at home, even if the employee's presence in the workplace is an essential function of their job."

Wage and Hour Issues

Employees working from home are subject to the same wage and hour laws as employees working onsite. Nonexempt employees' hours must be recorded by an employer regardless of where the work is performed and the employer must pay employees for all hours they "suffered or permitted to work." Overtime is due when hours exceed 40 in any work week regardless of whether the employer approves the extra hours worked.

"Concerns have been raised as to the employer's ability to sufficiently monitor its employees' hours worked," Gorovsky observed. "This is certainly an area that should be addressed in a company's telecommuting policy."


OSHA requires private employers to provide a place of employment that is free from recognized hazards. A February 2000 OSHA policy directive stated that OSHA would not inspect home offices, hold employers liable for the safety of telecommuters or require employers to inspect home workplaces, CCH stated.

"Nevertheless, some employers remain concerned that this internal policy could be reversed in the future, exposing employers to workplace safety violations and requiring them to complete costly home office inspections," Gorovsky warned. "Some employers are proactively offering telecommuters guidance on home office safety and design, and providing them with ergonomic furniture."

Generally, work-related injuries are covered under state workers' compensation programs, as long as the injury occurs in the "course of employment." There could be increased fraud and abuse in this area of the law because the telecommuting employee both works and lives at home. It might be difficult to determine whether the telecommuting employee's injury, which occurred in their home, actually occurred in the "course of employment."

"So far, the courts have not tried to expand employers' liability to cover all the in-home injuries of telecommuters, even when they aren't directly job-related, but this is an area to watch," Gorovsky said.

Compressed Work Weeks Can Reduce Commutes

Telecommuting is not the only option employers can implement to help with high gas prices. Employers also can encourage the use of public transportation, provide carpooling and financial assistance or offer a compressed work week.

A compressed work week is one in which a full-time job is completed in fewer than five days by increasing the hours worked each day. An example of this is the four-day work week. If this option is chosen, the extra "day off" typically is staggered (e.g., half of the employees have Monday off and the other half have Friday off) so that an employer's operations are not completely shut down on any single work day.

According to a CCH survey, 45 percent of employers offered a compressed work week, option.

"In some cases, though, a company may allow employees to work nine hours Monday through Thursday and then take off after four hours of work on Friday," Gorovsky observed. "Such a schedule may be attractive for other reasons, but it does not address commuting costs, since employees still make five round trips each week."

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