Dr. Jekyll and Mr. Hybrid: Navigating the hybrid work environment
While some industries have already returned to the office, other employers globally are considering hybrid work schedules as part of their return-to-office plans.
While some industries have already returned to the office, other employers globally are considering hybrid work schedules as part of their return-to-office plans. In some cases, employees can opt into such a schedule at their own volition, while other employers require that employees must be present in the office on certain days or for a certain percentage of time. Here are some items employers in the United States should keep in mind as they continue to welcome more employees back into the workplace.
Masks
The CDC recently issued renewed guidance suggesting that even fully vaccinated employees resume wearing masks in the workplace. State and local governments have issued renewed directives as well. OSHA continues to recommend social distancing in the workplace, even with masks or facial coverings. Employers should be mindful of employee health conditions that may require an accommodation under the ADA if the employee cannot wear a mask or facial covering. Employers should continue to monitor changes in government and agency guidance and requirements in jurisdictions where they have employees.
Sick leave
Returning to the office may mean that more employees require sick leave for themselves or to care for their family members as a result of contracting COVID-19 or for other reasons. The American Rescue Plan Act, which went into effect on March 1, extended paid sick time and family leave credits that were originally provided in the Families First Coronavirus Response Act and were set to expire on March 31. It allows employers with fewer than 500 employees to claim up to $12,000 (an increase from the previous limit of $10,000) for eligible sick and family leave provided to each eligible employee in a tax year. The credit can be claimed for time necessary to receive and recover from the COVID-19 vaccine and may be used if employees contract COVID (including the Delta variant).
After March 31, the credit will be structured as a refundable tax credit against the Medicare payroll tax.
Expense reimbursement
Hybrid work schedules allow employees to work in the workplace part of the week and from home for the balance of the week. In a number of jurisdictions, such as California and Illinois, employers are required by state law to reimburse employees for at least some work-related expenses that are necessary for conducting the employer’s business (and which benefit the employer), such as cellphone costs, internet costs and office supplies.
Even in jurisdictions where reimbursement is not mandated by law, employer best practices have included payment to employees of the reasonable costs that reflect the mandatory business usage. Where working from home is optional, however, employers may not be required to reimburse employees for these expenses in many jurisdictions. These reimbursement requirements may pose a burden for employers whose equipment costs are duplicated in the hybrid work model. Regardless, employers should understand the reimbursement requirements in the jurisdictions where they have employees and decide how they want to address employee expenses as part of a hybrid work schedule. Then, employers should provide employees with a detailed policy explaining which expenses will be reimbursed, under what circumstances, for what amounts, and reporting requirements for reimbursement. In the alternative, employers may want to provide a stipend to compensate employees for these costs, or some portion thereof.
Reimbursable commute
It may seem counter-intuitive to reimburse an employee for what seems to be the employee’s commute, but that could happen. When an employee travels from home to the work location, the commuting time is usually not a reimbursable expense under employer expense policies, and state laws that require business expense reimbursement do not extend to commuting costs. In contrast, when employees travel from one work location to another work location, the time or mileage is generally reimbursable under company polices and state laws that require business expense reimbursement.
Working from home can change this dynamic. When employers allow employees to work from home, they should decide whether and how often the employee may be required to come to the office. When providing offer letters, employment agreements, remote work agreements or the like, employers— particularly where the plan is for a hybrid work schedule—should consider what work location will actually be the employee’s primary work location. Designating the home location as the primary work location may create a reimbursable travel expense under an employer policy or even state law when the employee is asked to come to a physical work location outside their home.
Taxable fringe benefits
Employers may decide to provide employees working at home with perks like delivering food for meetings or company events. As a general rule, these types of fringe benefits will be considered taxable income. Under some circumstances, however, there may be a position that food provided for a business meeting may be tax-free, even when delivered to the employee’s home. Similarly, although paying for an employee’s commute from home to the office is generally taxable to the employee, there could be work-from-home situations where the employee’s tax home is their residence, resulting in tax-free reimbursements of travel expenses. Employers should consult their tax advisors when dealing with these types of benefits and reimbursements.
Dependent care flexible spending account changes
Employees who work hybrid schedules may have changing childcare needs. Employers who provided on-site childcare may consider implementing dependent care flexible spending account programs for employees if they do not have these programs already. In addition, under the Consolidated Appropriations Act, 2020 employers who already offer dependent care flexible spending accounts to their employees may allow employees to change their election in 2021 for any reason provided that the employer’s cafeteria plan is amended to allow such changes.
Security and data protection concerns
As employees go back and forth between the workplace and their home, there is an increased risk that they will be accompanied by confidential information. Therefore, it is important that employers put the requisite security safeguards in place to ensure that any confidential data is protected. Such safeguards may be fashioned in various forms, such as cybersecurity measures, restrictions on what kind of paperwork can be taken out of the office, and telecommunication and data transfer policies.
Privacy concerns
Against the backdrop of the pandemic, employee health and safety have been spotlighted in an unprecedented manner. Employers have supplemented hybrid work models with various initiatives, including an increased focus on mandatory vaccinations, mandatory testing for non-vaccinated individuals, and interactive applications that allow for self-certification of fitness and exposure to infections.
However, as employers gather such data, they should also put privacy measures in place to both comply with state privacy law requirements and avoid any residual risks such as media fallouts. For example, the California Consumer Privacy Act, if applicable, requires notice of the data collection. New York mandates cybersecurity measures to protect such data. Therefore, any efforts by employers to tighten workplace safety will have to be colored by consideration of such privacy legislation.
Employers may decide that allowing their employees the flexibility to work in the workplace or from home may be the most productive return to work plan while the pandemic lingers and beyond. They should be continue to be vigilant to changing workplace requirements, however, and unexpected implications of the new arrangements. Appropriate policies and training for employees are a best practice to implement these new strategies.
Michael Hepburn is a partner at Eversheds Sutherland (US) in Washington, D.C., and he counsels clients on a broad range of compensation, employment and benefits issues. Experienced in employee benefits, executive compensation and employment law, he advises clients on the design, administration and termination of retirement and welfare plans.
Bonnie Burke is a staff attorney at the firm in Atlanta, and concentrates her practice on federal, state and local employment laws, wage-and-hour matters, employee classification, workplace policies, including remote working, return to work considerations, hiring and termination issues, cross border employment arrangements, assessment of litigation and regulatory risk, employee health and safety matters, furlough and layoff matters, employment issues related to mergers, acquisitions and other business transactions.
Deepa Menon is an associate at the firm in Washington, D.C. She focuses her practice on federal, state and local employment laws, cross border employment arrangements, employee privacy matters, employment issues related to mergers and many other topics.
Laura Taylor is an associate in the firm’s Washington, D.C. office. She focuses her practice on employee benefits and executive compensation matters.
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