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Littler Mendelson P.C.

Time Off In California: 
State And Federal Laws On Employee Leave, 
Vacations And Holidays

By Tyler M. Paetkau   Bio   email
Littler Mendelson P.C.  

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V.        TIME OFF ISSUES UNDER THE CALIFORNIA "EIGHT HOUR DAY  RESTORATION AND WORKPLACE FLEXIBILITY ACT OF 1999"

Background And Overview Of AB 60

        1. Name and Purpose of Law

        "AB 60" misnamed the "Eight-Hour Day Restoration and Workplace Flexibility Act of 1999." It is the opposite of "flexible": It is restrictive, cumbersome and costly.

        In AB 60, the Legislature declared that the eight-hour workday should be protected and reaffirmed the state's commitment to upholding the eight-hour workday as a fundamental protection for working people.

        AB 60 was organized labor's reaction to the Industrial Welfare Commission's elimination of "daily" overtime in 1998. The supreme irony is that most union employees covered by a valid collective bargaining agreement that pays premium wage rates are not even covered by AB 60. Unions now use AB 60 as an organizing tool.

        2. Definitions

(a) "Workday" and "day" mean any consecutive 24-hour period beginning at the same time each calendar day.

(b) "Workweek" and "week" mean any seven consecutive days, starting with the same calendar day each week. "Workweek" is a fixed and regularly recurring period of 168 hours, seven consecutive 24-hour periods.

(c) "Alternative workweek schedule ("AWS") means any regularly scheduled workweek requiring an employee to work more than eight hours in a 24 hour period

        3. New Overtime Rules

        Any work over eight hours in one workday; any work over 40 hours in any one workweek; and the first eight hours worked on the seventh day in any one workweek must be compensated at no less than one and one half times the regular pay rate.

        Any work in excess of 12 hours in one day and any work over eight hours on any seventh day of a workweek must be paid at a rate that is not less than twice the regular pay rate. "An employee may be employed on seven (7) workdays in one workweek when the total hours of employment during such workweek do not exceed thirty (30) and the total hours of employment in any one workday thereof do not exceed six (6)."

        These overtime requirements do not apply to employees working an alternative workweek schedule ("AWS") adopted under AB 60 (see Sections V(A)-(B) below).

        4. Ridesharing Is Not Time Worked

        When an employee commutes in a vehicle owned, leased, or subsidized by the employer for the purpose of ridesharing, it is not considered part of a day’s work.

        5. Exemptions

        The Industrial Welfare Commission ("IWC") may establish exemptions from the overtime provisions for executive, administrative and professional employees. The employee must be engaged in duties that meet the test of the exemption and the employee must earn a monthly salary equivalent to no less than two times the state minimum wage for full-time employment to be exempt. The IWC must conduct a review of the duties that meet the test of the exemption. Based upon this review, the IWC may adopt or modify regulations pertaining to duties that meet the test of exemption by July 1, 2000. On January 1, 2001, the IWC adopted revised Wage Orders incorporating in the changes to the State’s wage and hour laws effected by AB 60; most of the Wage Orders have been updated as of January 1, 2002, and are available for downloading from the website of the California Department of Industrial Relations, which includes the Division of Labor Standards Enforcement (“DLSE”), also known as the California Labor Commissioner.  See www.dir.ca.gov/DLSE.

        The IWC may establish additional exemptions to hours of work requirements if it finds the hours or conditions of labor may be detrimental to the health and welfare of employees in any occupation, trade or industry. AB 60 does not require the IWC to alter any exemption from the provisions regulating work hours that was contained in any valid wage order in effect in 1997. The IWC may review, retain, or eliminate any exemption from the provisions regulating work hours that was contained in any valid wage order in effect in 1997.

(a) Registered nurses and pharmacists not exempt

        Registered nurses and pharmacists shall not be exempted from coverage under any part of the orders of the IWC (used to be covered under "professional" exemption), unless they individually meet the requirements for established for executive or administrative employees. 2001 Wage Order, Section 1(A)(3)(f).

(b) New definitions of "administrative," "executive" and "professional" exemptions in New 2001 Wage Orders

        New 2001 Wage Orders contain more detailed definitions for each of these three oldest exemptions, including some exempt duties.

(c) Public employee exemption

        All public employees previously exempt from California wage-hour laws and regulations are exempt under AB 60. California Labor Code 515, added by AB 60, provides that nothing in AB 60 requires the IWC to alter any exemption that was contained in any valid wage order in effect in 1997.

(d) Outside salesperson and "inside sales" or "commissioned" salesperson exemptions

        Outside salesperson exemption applies if employee "customarily and regularly works more than half the working time away from the employer’s place of business selling tangible or intangible items or obtaining orders or contracts for products, services or use of facilities." 2001 Wage Order, Section 2(M).

        "Inside" salesperson exemption applies if employee’s "earnings exceed one and one-half (1) times the minimum wage if more than half () of that employee’s compensation represents commissions."

(e) Unionized Workforce Exemption

        AB 60 does not apply to employees covered by a valid collective bargaining agreement if the agreement expressly provides for wages, hours of work, and working conditions of the employees, and if the agreement provides premium wage rates for all overtime worked and a regular hourly pay rate of not less than 30 percent more than the state minimum wage.

6. Meal Breaks

        Any non-exempt employee that works over five hours per day must take a meal break of not less than 30 minutes. If the total work period per day is no more than six hours, the meal break may be waived with consent by both the employer and the employee. A non-exempt employee that works more than 10 hours per day must take a second meal break of not less than 30 minutes. If the total hours worked is no more than 12 hours, the second meal break may be waived by mutual consent of the employer and the employee, but only if the first meal break was not waived.  Unless the employee is relieved of all duty during a 30-minute meal period, the meal period shall be considered an “on duty” meal period and counted as time worked.  An “on duty” meal period shall be permitted only when the nature of the work prevents an employee from being relieved of all duty and when by written agreement between the employee and the employer an on-the-job paid meal period is agreed upon.

        If an employer fails to provide a meal period in accordance with the applicable Wage Order, the employer shall pay the employee one (1) hour of pay at the employee’s regular rate of compensation for each workday that the meal period is not provided.

        In all workplaces where employees are required to eat on the premises, a suitable place for that purpose shall be designated.

        Exception for health care workers: Those employees in the health care industry who work shifts in excess of eight hours in a workday may voluntarily waive their right to one of their two meal periods. To be valid, the waiver must be in writing, signed by both the employee and the employer. The employee may revoke the waiver at any time by providing the employer at least one day’s written notice. The employee shall be fully compensated for all working time, including any on-the-job meal period, while such a waiver is in effect. 

        The IWC may adopt or amend working condition orders regarding break periods, meal periods, and days of rest for any workers in California consistent with the health and welfare of those workers and AB 60.

         7. Other New Burdens on Employers (Final 2001 Wage Order)

a.      Record-keeping

b.      Meal periods from 10:00 p.m. and 6:00 a.m.

c.       Reporting time pay

d.      Licenses for disabled workers

e.      Cash shortages and breakage

f.        Uniforms and equipment

g.      Meals and lodging Change rooms and resting facilities

h.       Seats, temperature, elevators, DLSE discretionary exemptions, and posting requirements

         8. Penalties

        Any employer or person acting on the employer's behalf who violates, or causes to be violated, a section of this chapter or any provision regulating hours and days of work in any order of the IWC will be subject to a civil penalty as follows:

(a)    For any initial violation, fifty dollars ($50) for each underpaid employee for each pay period that the employee was underpaid in addition to an amount sufficient to recover underpaid wages.

(b)  For each subsequent violation, one hundred dollars ($100) for each underpaid employee for each pay period that the employee was underpaid in addition to an amount sufficient to recover underpaid wages.

(c)  Wages recovered pursuant to this section will be paid to the affected employee.

        The new civil penalties in AB 60 are in addition to any other civil or criminal penalty provided by law, e.g., "waiting-time" penalties under California Labor Code Sections 201-204.

A. Using Alternative Workweeks To Provide Employees With Time Off

        "Upon the proposal" of the employer, employees may adopt an alternative workweek schedule ("AWS") that authorizes them to work up to 10 hours per day within a 40-hour workweek without overtime pay.

        The alternative workweek may be a single work schedule that would become the standard work schedule for all workers in the unit, or several work schedule options that each employee of the unit would be able to choose.

        Work beyond the hours scheduled under the adopted AWS, up to 12 hours in a day, or beyond 40 in a week, must be paid at one-and-one-half (1) times the employee's regular rate; work over 12 hours in a day or any work in excess of eight (8) hours on those days worked beyond the regularly scheduled AWS must be paid double the employee's regular rate of pay.

        The IWC is required to study the costs and benefits of AWSs and report its findings and recommendations to the California Legislature by July 1, 2001. 

        1. "Interim" And "Final" Wage Orders

        Proposals for AWSs must designate a regularly scheduled alternative workweek in which the specified number of workdays and work hours are regularly recurring, e.g., "4-10." The actual days worked within that AWS need not be specified. "If the employer proposes a menu of work schedule options, the employee may, with the approval of the employer, move from one menu option to another." 2001 Wage Order 4, Section (3)(C)(1).

        A work unit may consist of an individual employee as long as the criteria for an identifiable work unit are satisfied.

        Any AWS adopted under AB 60 must provide for not less than four (4) hours of work in any shift.

        "Nothing in this section shall prohibit an employer, at the request of the employee, to substitute one day of work for another day of the same length in the shift provided by the alternative workweek agreement on an occasional basis to meet the personal needs of the employee without the payment of overtime." (Emphasis added; note IWC uses the term "agreement," but it is actually a written "proposal" by the employer, which the work unit must "adopt" through a two-thirds vote, secret ballot election procedure.)

        If an employer, whose employees have adopted an AWS, requires an employee to work fewer hours than those that are regularly scheduled by the AWS, then the employer shall pay overtime at one-and-one-half (1) times the employee's regular rate for all hours worked in excess of eight (8) hours, and double the employee's regular rate of pay for all hours worked in excess of twelve (12) hours for the day the employee is required to work the reduced hours.

        2. AB 60's Effect on Prior Alternative Workweek Arrangements

        Any AWS that is authorized by AB 60 and was in effect on January 1, 2000, may be repealed by the affected employees. (This provision is unclear because AB 60 did not "authorize" any alternative workweek until January 1, 2000; probably means any AWS adopted under AB 60 after January 1, 2000 may be repealed.) Any AWS that was previously adopted pursuant to Wage Order Numbers 1, 4, 5, 7, or 9 of the IWC is automatically null and void, unless the AWS is no more than 10 hours work in a workday and was adopted by a two-thirds vote in a secret ballot election pursuant to wage orders of the IWC in effect prior to 1998.

        Any employee that is voluntarily working an AWS of no more than 10 hours in a workday as of July 1, 1999, may continue to work that alternative schedule without daily overtime, if the employer approves a written request of the employee to work that schedule.

        3. Alternative Workweeks - Health Care Industry

        Employees in the health care industry that have adopted an AWS by two-thirds vote in a secret ballot allowing for workdays that exceed 10 hours a day, but not over 12 hours in a day pursuant to Wage Orders 4 and 5 in effect prior to 1998, will be valid until July 1, 2000. Employers in the health care industry must make reasonable efforts to accommodate any employee who is unable to work the AWS established as a result of a valid election.

        Any employer that operates a licensed hospital or provides personnel for the operation of a licensed hospital who creates a regularly scheduled workweek that includes no more than three working days of no more than 12 hours each within any workweek, must make a reasonable effort to find an alternative work assignment for any employees who participated in the vote that authorized the schedule but are unable to work 12-hour workday schedule. Employers will not be required to offer an AWS if there is no AWS available or if the employee was hired after the adoption of the 12-hour, 3-day schedule. This section remained in effect until July 1, 2000, and as of that date was repealed.

B. The Alternative Workweek Election Procedure

        1. Adoption of an AWS

        An AWS may be adopted only if it is approved in a secret ballot by at least two-thirds of the affected employees (or the single employee if applicable) in a "work unit." The employer must report the results of any election for an AWS to the Division of Labor Statistics and Research ("DLSR") within 30 days of the results being final:

    • Reporting election results to DLSR: (a) Mail to the Chief, Division of Labor Statistics and Research, Attention: Alternative Workweek Election Results, P.O. Box 420603, San Francisco, CA 94142; or (b) may be filed in person at 455 Golden Gate Avenue, 5th Floor, San Francisco, CA 94102.
    • The report to DLSR "shall include the final tally of the vote, the size of the unit, and the nature of the business of the employer." Furthermore, the report of election results "shall be a public document."
    • Election must be held during regular working hours at the employees' work site.
    • Employers "shall bear the costs of conducting any election held pursuant to this section." (Includes both elections to adopt and to repeal AWSs.)
    • "'[A]ffected employees in the work unit' may include all employees in a readily identifiable work unit, such as a division, a department, a job classification, a shift, a separate physical location, or a recognized subdivision of any such work unit. A work unit may consist of an individual employee as long as the criteria for an identifiable work unit in this subdivision is met."
    • Prior to secret ballot vote, employer must disclose the effects of the proposed AWS in writing to the affected employees, including effect on wages, hours and benefits.
    • Such disclosure "shall include meeting(s), duly noticed, held at least fourteen (14) days prior to voting, for the specific purpose of discussing the effects of the alternative workweek schedule." 2001 Wage Order 4, Section (3)(C)(3).
    • Employers must provide the disclosure in non-English language if at least 5% of the affected employees "primarily speak that non-English language." 2001 Wage Order 4, Section (3)(C)(3).
    • Employers must mail the written disclosure to employees who do not attend the meeting.
    • Failure to comply with the above requirements "shall make the election null and void." 2001 Wage Order 4, Section (3)(C)(3).
    • Upon a complaint by an affected employee, and after an investigation by the DLSE, the DLSE may require the employer to select a neutral third party
    • Employees affected by change in work hours resulting from adoption of AWS may not be required to work those new work hours for at least thirty (30) days after the announcement of the final results of the election.
    • Note that AB 60 prohibits an employer "from intimidating or coercing employees to vote either in support of or in opposition to a proposed" AWS. But new provision adds: "[N]othing in this section shall prohibit an employer from expressing his/her position concerning that [proposed] alternative workweek to the affected employees." 2001 Wage Order 4, Section (3)(C)(8) [emphasis added].

        2. Repeal of an AWS

    • Upon a "petition" of one-third of the affected employees, a new secret ballot election shall be held and a two-thirds vote of the affected employees shall be required to reverse the AWS. 2001 Wage Order 4, Section (3)(C)(5).
    • The repeal election must be held not more than thirty (30) days after the petition "is submitted to the employer."
    • Repeal election cannot be held within one year "after the date that the same group of employees voted in an election held to adopt or repeal" an AWS. (Employees cannot change their minds more than once per year.)
    • Generally the same election procedures for adoption of AWSs apply (see Section B(1) above), such as the requirement that the vote take place during regular working hours at the employees' work site.
    • If AWS is "revoked," the employer shall comply within 60 days, but the DLSE may grant an extension "[u]pon a proper showing of undue hardship," a phrase that is not defined either in AB 60 or in Final Wage Order 2001. 2001 Wage Order 4, Section (3)(C)(5).

C. Make-Up Time For Personal Obligations

        If an employer approves a written request by an employee to make up time missed due to a personal obligation, the make up work, if performed in the same workweek as the time lost, may not be counted as overtime, except for hours that exceed 11 hours of work in one day or 40 hours in one workweek. 2001 Wage Order 4, Section (3)(M).

    • An employee must provide a signed written request for each occasion that they wish to make up time.
    • An employer may, but is not required to honor the employee's request for make-up time.
    • An employer is prohibited from "encouraging or otherwise soliciting" employees to request this approval to take personal time off. An employer may, however, "inform an employee of this make-up time option."
    • "If an employee knows in advance that he or she will be requesting make-up time for a personal obligation that will recur at a fixed time over a succession of weeks, the employee may request to make-up work time for up to four (4) weeks in advance."
    • Careful policy drafting and documentation.

D. The Duty To Provide Reasonable Accommodation Under AB 60

        The employer may not reduce an employee’s regular hourly pay rate as a result of the adoption, repeal or nullification of an AWS.

        The employer must make a reasonable effort to find a work schedule not to exceed eight hours in a workday that accommodates an employee who was eligible to vote in the AWS election but is unable to work the AWS. The employer is permitted to provide a work schedule not to exceed eight hours in a workday, to accommodate an employee who was hired after the election and is unable to work the alternative schedule.

        The employer must explore any available reasonable alternative means of accommodating the religious belief or observance that conflicts with an adopted AWS, in the manner provided by subdivision (j) of Section 12940 of the California Government Code, also known as the "Fair Employment and Housing Act" ("FEHA").  2001 Wage Order 4, Section (3)(B)((4).

E. Time Off Requested By Exempt Employees

        Primary danger is the employer risks losing the benefit of an exemption for entire class of employees if the employer treats them as non-exempt. For example:

    • Docking an exempt employee's salary for absences from work of less than one day, even if the exempt employee has exhausted vacation and sick leave.
    • For certain other leaves that are legally required (e.g., jury duty), employers arguably cannot deduct pay from an exempt employee's salary for absences of less than one full week without risking reclassifying the employee as nonexempt.
    • Unlike federal law, DLSE takes the position that deductions from the salary of an exempt employee for the infraction of any rule are impermissible.  
    • Requiring exempt employees to keep timecards and/or paying them on an hourly, as opposed to salary, basis. (Note: AB 60 changed California "remuneration" standard to a "salary" standard: In addition to satisfying the "duties" test for the particular exemption, exempt employee must also earn a monthly salary equivalent to no less than two times the state minimum wage for full-time employment.)
    • “Recission” of Miles Locker letter regarding “salary basis” test for exempt employees, and update on pending litigation against the IWC regarding its adoption of FLSA “weekly” salary basis test.

 F. Recent California Legislation On Employee Sick Leave (AB 109) And Other Recent California Time Off Legislation

        1. Use of sick leave to care for ill spouse, child or grandparent

        AB 109, effective on Jan. 1, 2000, does not require employers to offer sick leave to employees. It also does not prohibit policies that restrict sick leave to employees who fall into specific classifications (e.g., full-time, exempt) or who satisfy eligibility conditions (e.g., a probationary period or six-month waiting period).

        However, AB 109 applies to all employers who provide sick leave. If an employer provides sick leave, it must allow employees to use a portion of their annual leave entitlement to attend to an illness of a child, parent or spouse.

    • The amount of sick leave that is available in any calendar year may not be less than the sick leave that would have accrued over a six-month period at the employee's then current rate of entitlement.
    • The calendar year is the 12-month measuring period used to compute the amount of sick leave that is available.
    • Equivalent to one-half of the annual sick leave accruals.
    • If employee already has used all of his/her accrued sick leave, the employer need not advance sick leave that the employee is expected to earn in the future.
    • Employers can impose restrictions and conditions on use of sick leave to care for family members (just as employers may do with use of sick leave to care for employee's own illness). E.g., employees must satisfy a waiting period or provide a medical certification of illness, reasonable notification rules.
    • Based on broad definition of "sick leave" in the statute, one could argue that paid time off and combined leave programs (leave "banks") that allow employees to use paid leave benefits for a variety of different absences, such as sickness, vacation and personal days, would be subject to the sick leave rules of new Cal. Labor Code 233.
    • No extension of maximum leave under the California Family Rights Act ("CFRA") or the federal Family and Medical Leave Act ("FMLA"), regardless of whether the employee receives sick leave compensation during that leave.

         Prohibitions against discrimination and remedies.   

            Note new legislation affecting “domestic partners.” New AB 25 affects employers in a variety of ways. For example, domestic partners can now use up to half of their accrued sick leave to care for a domestic partner. Employers are not required to offer sick leave. However, if they do, they must allow employees to use up to one-half of their accrued sick leave to care for a sick child, parent or spouse, and now, a registered domestic partner or child of a registered domestic partner.  Cal. Labor Code  233.  AB 25 does not, however, extend to domestic partners rights under California Family Rights Act to care for the serious health condition of a domestic partner.  See Cal. Gov’t Code  12945.2.

        2.   Other Recent California “Time Off” Legislation

California bill-tracking website:  http://www.leginfo.ca.gov/

G. Recent Wage And Hour Law Changes

        1. Computer software exemption

       New exemption (SB 88) for employees in computer software fields who:

(a) earn hourly rate of $41.00 (now increased to $42.64, tied to increases in Consumer Price Index);

(b) are primarily engaged in work that is intellectual or creative and requires the exercise of discretion and independent judgment; and

(c) are highly skilled and proficient in the theoretical and practical application of highly specialized information to computer systems analysis, programming and software engineering.

        2. Recent Bell v. Farmers Insurance Exchange "Administrative" Exemption Decision

        Narrows application of the administrative exemption and relies on the "administrative/production worker dichotomy" from federal law under the FLSA.

        For more information and updates, check the IWC's website: www.dir.ca.gov/Iwc.

       3.  Update on Wage-Hour Class Actions

        Recent developments, including Sav-On Drugs appellate opinion reversing trial court order granting class certification in a wage-hour exemption case.

      4.   Lactation Accommodation (AB 1025)

        AB 1025 adds Sections 1030 through 1033 to the California Labor Code.  The bill requires every employer (private and public) to accommodate a lactating employee.  Employers must provide a reasonable amount of time to allow employee to express milk.  The break time shall run concurrently with the rest period already provided to the employee under the applicable Wage Order, if possible, and any additional break time shall be unpaid. However, employers are exempted from the break time requirement if the break would seriously disrupt the employer’s operations. Employers must make reasonable efforts to provide the employee with a room or other location, other than a toilet stall, near the employee’s work area, for the employee to express milk in private.  The employee’s regular work area is acceptable if it otherwise meets these requirements. Finally, employers are subject to a $100 penalty per violation, and the Labor Commissioner may issue citations.

VI.  USING TELECOMMUTING AS AN ALTERNATIVE TO TIME OFF

A. Advantages And Disadvantages

        Employees enjoy the privilege, convenience and flexibility of telecommuting. Allowing it can be good for employee morale. An estimated 10% of the U.S. workforce now telecommutes, and the percentage is expected to increase over the next few decades. There are many reasons for this trend, including employee retention issues, technological advances that have made working from home more feasible, crowded freeways and the lack of suitable parking near work sites, and the increasing numbers of working parents who require more flexible work arrangements.

        Even the government has joined the telecommuting revolution, as last year a Senate bill proposed giving telecommuters a $500 tax credit, mostly to cover furnishings and electronic information equipment needed for telecommuting. The Governor of Virginia also proposed $10 million in tax incentives for employers who permit telecommuting. Recent studies have suggested that telecommuting arrangements have improved employees’ productivity and efficiency.

        By virtue of technology alone, employers may be swept into telecommuting arrangements without first assessing the business and legal implications, including potential liability issues that arise primarily in the context of employee work hours, home safety and accommodations.

B. Issues All Employers Should Consider In Conjunction With Telecommuting

        Telecommuters are protected by most labor and employment laws, including the federal Fair Labor Standards Act ("FLSA"), the California Labor Code and the Occupational Safety and Health Act ("OSHA").

        Under the FLSA, for example, an employer may not refuse to pay a non-exempt employee for overtime worked on the grounds that work was performed at home. Employers must comply with the FLSA without regard to an employee's place of working. This means that employers must be careful to collect accurate data from non-exempt telecommuters regarding the number of hours worked at home. Employers should not allow employees who they do not trust to telecommute, as the employer is to some degree relinquishing control over record-keeping, overtime and the like by allowing employees to work from home.

        Although OSHA withdrew one of its advisory letters, employers should take care to assure themselves that employees are working in a safe environment at home. OSHA is not precluded from regulating home offices by statute. In keeping with its purpose, OSHA officials have indicated that the agency will inspect home offices in the case of serious injury or death, especially if manufacturing work is conducted at home.

        Employees are entitled to workers' compensation benefits for injuries "arising out of and in the course of employment." There is no requirement that the employee be located on the employer's premises to sustain a compensable injury. More than 20 years ago, a California appeals court permitted a college professor to recover workers' compensation benefits when he slipped on his lecture notes while preparing his class syllabus at home. Similar cases are likely to arise in the future as more and more employees perform work at home. To prevent injuries and minimize liability, employers should be keenly interested in the safety of an employee's home office. Periodic home-office inspections are advisable. Employers should also consider requiring telecommuters to complete a self-certification safety checklist.

        In addition to liability under labor and employment laws, telecommuting raises other legal issues. For example, telecommuting may involve the use of employer-owned equipment and the storage of the employer's proprietary information at home offices. These circumstances may require review of employer and employee insurance policies to confirm whether employer-owned equipment and other information are covered in case of loss. Such confidential information use and storage also makes it difficult to protect the employer's "trade secrets," such as customer lists, billing history, key contacts, data and preferences. Furthermore, employers should assure themselves that employees would return equipment and information upon demand.

        Recent case law suggests that an employer should offer telecommuting as a form of "reasonable accommodation" for disabled employees under the ADA and FEHA. Employers should consult with their legal counsel regarding these issues, including the important legal issue of whether the employee is a "qualified individual with a disability."

        Employers can minimize the potential liability associated with telecommuting arrangements by creating a telecommuting agreement or adding telecommuting provisions to an existing employee handbook. Such provisions should clearly set forth the terms of any telecommuting arrangement and might include provisions such as the following:

    • Define telecommuting and make it clear telecommuters are still subject to all of the employer’s policies and procedures even though they will be working off-site.
    • Agreement by the employee to return any employer-provided equipment upon termination of the telecommuting arrangement or termination of employment.
    • Agreement by the employee to return all of employer's proprietary information upon demand.
    • Acknowledgment by the employee that he or she received a home office checklist to ensure that the home working environment is safe. Any safety checklist for the home office should comply with current OSHA guidelines and should be designated as derived from those guidelines.
    • Set out the work hours and days for telecommuters.
    • Advise telecommuters that the employer retains the right to terminate the telecommuting arrangement at any time, without cause or advance notice.
    • Grant the employer the right to inspect the telecommuter’s home office and state when such inspections can occur.
    • Agreement by non-exempt employees to work no more than 40 hours per week without the express permission of a supervisor and to keep accurate time records.
    • Non-discriminatory standards for a telecommuting arrangement to protect employers from claims that telecommuting was denied to particular employees for discriminatory reasons.
    • Agreement by the employee to promptly report any accidents that occur while he or she is working in the home office.
    • Specific guidelines regarding reimbursement for expenses related to the home office.
    • Detail what equipment telecommuter will be using, who will be providing it, who is responsible for maintenance, damage, loss, etc.
    • Consider confidentiality and protection of trade secrets policies.
    • Agreement as to liability insurance for accidents that occur at an employee’s home office. Consider defining/limiting work space for which employer will assume some responsibility, e.g., no employer liability if someone drowns in the employee’s home swimming pool.

        Every employer who allows employees to perform work from a home office, during or after normal business hours, should be aware of the legal issues raised by telecommuting. Employers should adjust the telecommuting arrangement with these issues in mind so that they may minimize potential liability while allowing employees to take advantage of the benefits of telecommuting.

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