Transcripts
Welcome to BizFilings Expert Insights.
Greg Corombos: Hi, I'm Greg Corombos. Our guest in this edition of Expert Insights is Barbara Weltman. She is the President of Big Ideas for Small Business, Inc. Today, we're going to get her thoughts on what small business owners need to know about liability issues for employees who work from home. And Barbara, thanks, as always, for being with us.
Barbara Weltman: Well, thanks for having me.
GC: Well, we talked about this issue back in 2019, when you were writing about the liability issue for people working at home — for business owners. And obviously, a lot has changed since then. For example, when you wrote back then you said 17% of workers work from home full time. But 66%, even then, did some of the time. Obviously, those numbers have changed quite a bit, especially on the full-time side. But just how much has working from home skyrocketed as a result of improving technology and, of course, just getting used to the idea during the pandemic?
BW: Absolutely the numbers have skyrocketed, and I don't think that we're going to see a decline. So many more people are working from home full time now, or at least a good part of the time. I know many companies are requiring employees to come in, but maybe just a day or two a week, a day or two a month. And so, I think remote work arrangements are here to stay, and employers have to deal with it.
GC: Absolutely. Yeah. Some were prepared for it. Some learned on the fly. Some are still resistant and are now finally getting around to it. But, let's talk about the area of liability though now. You've written about three critical areas of liability for employers to consider when it comes to remote employees. The first one is what happens if someone is physically injured while at home. Overall, what responsibilities does the employer have on that front during working hours?
BW: All of the things that we're going to talk about are kind of murky. Everything is not crystal because there's not a whole lot of guidance here. So, workers’ comp would cover an employee who was injured during work time. What does that mean for somebody who's working remotely? Does it meanwhile they're on the clock? What exactly does it mean? So potentially, there is workers’ comp coverage for such an employee. The good news appears to be some old guidance from the Department of Labor that employers don't have to go into employees’ homes and inspect them and make sure they're safe.
But certainly, because there is potential liability, it would be a great thing for employers to advise employees about making their workspace safe. They don't want wires hanging around that they can trip over and that sort of thing. So, there could be potential liability and it's just something to think about. And you do need to have your workers' comp policy cover your remote workers.
GC: Barbara, you mentioned the Department of Labor. Is there any expectation that this issue is going to get addressed and updated anytime soon?
BW: Who knows. There was no inkling of this throughout COVID. So, I guess there are more pressing issues for the DOL, but it's something certainly to watch out for. What will happen, in my opinion, is that there could be some dramatic case that arises. And that will draw attention to the issue. And then we'll find out.
GC: Yeah, that's going to get sorted out through lawsuits. I have a feeling. So I'm just wondering whether you throw your back out trying to install the printer or carry a printer somewhere across your office or cut yourself badly making a sandwich for lunch? Are there certain activities that are closely related enough to work that they count?
BW: It would have to be work-related just as if you were in the office. So if you're out on your lunch hour, you're probably not covered. But again, if you are driving for work and there's an accident, that could be considered for workers' comp. Again, the rules are a little different from state to state. Every state other than Texas has mandatory workers' comp. And so, you really have to check the rules in your state.
GC: So it's really up to the states then to set these policies. It's not necessarily the Feds, and in most cases, businesses don't have a ton of flexibility. Or do they?
BW: No they don't, and the complication here is that the business may be located in one state, but the employees are working remotely from another state. And so you have to check what your workers' comp responsibilities are with respect to the remote workers, and it may mean getting workers’ comp in a different state.
GC: A lot of different angles to focus on there. We're talking with Barbara Weltman, President of Big Ideas for Small Business, Inc. Barbara, you mentioned that business owners don't have to check on their employees' homes. But what can they do? What conversation should they have to make sure that they're not going to have to deal with this?
BW: Well, as I mentioned, I think that they want to encourage employees who are working remotely to have a safe work environment. And this means having the right equipment, having the right space, and making sure that it's as safe as possible. So the reality is, many employees are probably working at the kitchen table. And how safe is that with, you know, food preparation going on in the same space? It's hard to even envision how safe it could be. But clearly, as to a conversation, you want to encourage a safe workspace
GC: Definitely. Getting on the same page. Setting common expectations, I think, is a helpful way to avoid a lot of problems. The next area of liability that you worry about — and I know my IT team does, too — is data security. The cyber threats are getting more sophisticated every day. And it's hard enough keeping the office servers protected. But what about having a number of remote workers on their own wireless connections and so forth? How much does all of that complicate data security?
BW: Well, absolutely it does. I think that a number of businesses have gone the route of providing workers with dedicated laptops so that they're using their laptops just for work and to hook up to the company servers and limit the possibility of using those laptops for surfing the web, which could bring people to unsafe locations and issues. So that would be, certainly, a good strategy for companies that can afford to do that.
For companies that can't, and employees are just their own personal computers, you have to educate them about safe work strategies online. In other words, passwords, password protection, two-step authorization where needed, and firewalls, and such. So, there's a lot that can be done to protect yourself.
Look, we know that hackers can get into the U.S. Defense Department. They can get into any place they want. Really. And unfortunately, small businesses are quite vulnerable. They're kind of easy pickings for hackers and bad actors out there. So again, do whatever you can do. There are a lot of resources available to help train your remote workers to be as safe as possible.
And then, of course, another thing to consider with all of this is cyber liability insurance for added protection for costs that you may incur if you are hacked and do incur ransomware, or whatever, that could be triggered from remote workers to pay for data. To pay the ransom where if that’s your choice. Or reconstruct your data, or pay for identity theft protection for customers and employees whose information may have been accessed.
GC: You mentioned the insurance, Barbara. What tips do you have for picking out the right policy for yourself?
BW: Well, the good news is that a growing number of companies are offering this kind of coverage. And some may be just an add-on to your business owner’s policy. So it could just be another layer of coverage that goes onto your existing policy and may not be as expensive as it used to be. When cyber insurance first debuted, it was super expensive. So it's still a cost. I don't want to minimize what the cost might be. But again, it's available now through major insurers, and may just be an add-on to your existing business owner’s policy.
GC: Barbara, I think what you mentioned before is also critical, of course, and that’s that, if you can, keep your work on your work device and your personal stuff on your personal device. Another thing that at least my IT department pummels into our heads on a regular basis, and I think rightly so, is be careful what you're looking at in your email. What looks like from a reputable source, somebody you do business with, but these phishing expeditions get pretty sophisticated and they can look a lot like the real thing when they're not. And so just be really careful about whatever links are presented in an email, and make sure that you're actually clicking the authentic thing. Because once you go down that road on a work device, your entire life network could be in trouble.
BW: Absolutely, absolutely. I happen to use a service that monitors my email and catches a lot of that kind of stuff. And it's available for me to review before I would even consider clicking on it. And that kind of thing is helpful and the cost is modest. But all of these things can add up as the cost of doing business. So I'm not saying people should do it, but just be aware that this is an option out there.
GC: Absolutely, right. Again, we're speaking with Barbara Weltman. She is the President of Big Ideas for Small Business, Inc. And then the third area of concern here, Barbara, when it comes to employer liability for at-home employees is clocking in and clocking out. Most of us don't have the punch clocks at work anyway. But people do, still, you know, log in and log out to their accounts. And that's fairly easy to track. But what additional challenges does working from home bring when it comes to accurately figuring out how much time somebody is actually spending on the job, particularly for an hourly employee?
BW: When we're done with talking about this third point, I want to add a fourth point. We'll start with that.
GC: Absolutely!
BW: But you have to kind of trust your employees and see, are they doing the work? Are they getting the work done? I've seen reports that have found that people who work remotely are more productive than people who work on site, perhaps because they're not distracted by conversations at the watercooler or excessive meetings and such. And they have more time because they don't have to commute.
And so I think, to some extent, there's an element of trust here. And I think you can know if employees are doing what they're supposed to do. So as you know, you can log on, you can log off, and there are all kinds of ways to—I hate to use the word—but just spy on your employees and know what they're doing. But the bottom line comes in, and are they doing what they're supposed to do? And that that would be the safest kind of check that you'd want to employ.
GC: Barbara being on or off the clock is also more complicated at home. And you talked about, you know, trusting people, as long as they're getting the work done, you can take them at their word on the time they're putting in as well. But, you know, other things can take up time during your day. Maybe you’ve got a repairman coming. I had that happen today. And of course, after you're done working for the day, you might get an urgent message to finish something or send something and employee may not think to clock in or clock out for those things that don't take that long. So is it just common sense here or are there some best practices to make sure that everybody ends up happy at the end of the day?
BW: One of the things that you can consider is having a conversation with your employees about this. About their work habits. In other words, some employees who perhaps have young children and childcare responsibilities may prefer to work after what we might consider after business hours, and that's their most productive time. And, again, a conversation can help figure out the best way to work with your employees. And it might not be one size fits all. And so maybe certain employees will have more flexibility as to how they account for their time, and maybe they don't have to account for their time just that they account for their work, while other employees need to account for their time. Maybe they’re hourly employees, and you need to know that the exact hours that they've put in because you have to have minimum wage and overtime rules observed. So again, it depends on the situation, the employees, the kind of work and such.
GC: Barbara, you mentioned a fourth topic of concern, what is it?
BW: The fourth topic of concern is taxes. When you have remote workers, now you have to think about taxes in locations other than way your business is. And not only taxes, but benefits and—I should expand it¬¬¬¬¬¬—taxes and employment rules. Because the employees are subject to the rules where they're located and it's kind of complicated in terms of withholding income taxes, state income taxes, there are different rules in different situations. There are different states where they have compacts and where reciprocity for withholding and such. So it's really quite a complex area.
And again, also with respect to employment law, is a worker in one state eligible let's say for family and medical leave under state rules versus the federal rules. And so, I think it's highly advisable for employers to know where their staff is located and review the tax and employment law responsibilities in each location.
GC: How does this work when you have people who are partly in the office or partly in a different jurisdiction? Are those people just under the umbrella of being in the office? Or is what you're talking about mainly for people who are, you know, out of state, almost never in the office and that sort of thing?
BW: There's no good answer, I will tell you. They've tried to pass a federal law with a 30-day rule, saying that if you're not in the office for 30 days—in a state for 30 days—then that state has no claim on income taxes and such. Nothing's happened at the federal level. It's, again, I can't emphasize how complex this area is. And it's essential that businesses sit down with their CPAs or other tax advisers to determine what has to be done. It may be important for businesses to work with a payroll service that can deal with this and an organization, a co-employee or a professional employer organization that can manage the employment law and taxes in the various locations.
Again, it's so hard for small businesses. I feel so bad for small businesses that have to deal with, look, the core of your business is selling your products and services. And that's where business owners want to focus their attention. That's what's going to bring in revenue. But you have to think about all these other areas to avoid liability. And so, you can't just ignore the problem. You have to address it. And the more outside help that you have to make sure that you're doing things right, the better off you'll be.
GC: Four big areas to consider there. Personal injury, data security, punching in and out, and then of course the tax issue as well. And for more information on all those topics, and much more, you can head over and read more of what Barbara has written. Barbara, where can folks find your content?
BW: At bigideasforsmallbusiness.com.
GC: Barbara Weltman is the president for Big Ideas for Small Business, Inc. I'm Greg Corombos reporting for Expert Insights. For more information on this topic, please visit bizfilings.com.
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