Teleworking The New Normal Opportunities Challenges and Risk

Teleworking: The New Normal? Opportunities, Challenges, and Risk Avoidance Measures

Speakers Adam T. Pankratz Shareholder, Ogletree Deakins adam. pankratz@ogletree. com Cathi Hunt VP and Associate General Counsel, Labor & Employment and Litigation, Vontier Corporation Cathi. hunt@vontier. com

Circa February 2020

Roadmap – Teleworking Today • • COVID-19 Teleworking - The New Normal? Business Expense Reimbursement Ergonomics 101 Analysis of Ergonomics Complaint ADA and Telework Intersection Workplace Safety and OSHA Regulations Teleworking Tax Implications

Shift to Telework Continues into 2021 and Beyond …

Home Office Stipends

Work from Home Business Expenses • • • Home computers or laptops Printers Scanners Internet service Wi-Fi connections and routers Smartphones Pens and paper Office equipment Other miscellaneous office supplies (staplers, paper clips, etc. )

Expense Reimbursement Overview • Consider reimbursing employees for expenses incurred due to telecommuting • Maintain open communication with employees to learn about the challenges involved with remote work and the equipment necessary to maintain productivity • Employers may not require employees to cover these expenses if telecommuting is an ADA accommodation • Employers may not require employees to cover these expenses if doing so would violate the FLSA

Fair Labor Standards Act (FLSA) • Employers must pay employees a minimum wage for all hours actually worked • Employers may not require an employee to pay for additional business expenses (mileage, equipment, tools, etc. ) that reduce an employee’s wages below the federal minimum wage • Otherwise, there are no federal requirements for reimbursement • DOL reiterated the existing federal requirements in July 2020 in response to COVID-19 • BEWARE CA and other state law deviations

State Business Expense Requirements • Few states address reimbursing employees for business expenses – (CA, CT, DC, IL, IA, MT, NH, ND, SD) • California has the most employee-protective law, requiring employers to reimburse employees for “all necessary expenditures” – “All necessary expenditures” is arguably broad enough to cover everything necessary to recreate an employee’s office workstation at home – Herrera v. Zumiez, Inc. , _ F. 3 d _, 2020 WL 1301057, at *11 (9 th Cir. Mar. 19, 2020). • Most states are silent and give employers discretion • Consider company culture – Was payment for expenses routine before COVID

Sample Policy Remote Work Expense Reimbursement Policy [Company] employees working under a remote work arrangement should use company provided work cell phones, computer phones, company-issued personal data devices and company systems to complete their work. Employees are expected to use their personal phone, as a last resort only. Employees will be expected to use their equipment, including all phones in an appropriate manner when conducting Company business, and are expected to comply with all Company policies and procedures. These policies include but not limited to policies concerning information security, code of ethics, equal employment opportunity, and anti-harassment. Confidentiality and security of [Company] information is paramount and employees are expected to maintain the confidentiality and security of [Company] information on their personal phones (including text messages and voicemails). To comply with government requirements or litigation obligations, or to conduct an internal investigation, employees may need to temporarily provide their personal cell phones to the Company for inspection and retrieval of relevant information, should the need arise. The Company reimburses [insert applicable states] employees for all necessary and reasonable business expenses in accordance with state laws. Employees are provided a monthly flat sum reimbursement of [insert amount]. This reimbursement is subject to the necessity of continuing the remote work arrangement. [Company] may require employees to return to the regular, in-office work at any time, and discontinue the reimbursement stipend at any time. This reimbursement is intended to include a reasonable percentage of the your monthly phone or internet cost that is used for company business. If an employee incurs business-related expenses in excess of the amount listed above, the employee must contact their manager within 60 days of the charges. Employees who incur reasonable and necessary excess expenses for business-related reasons will be reimbursed the additional amount. To receive reimbursement, employees must submit a copy of their invoice, provide a listing of the business usage, and submit a completed reimbursement form for approval.

Tips for Minimizing Wage and Hour Risk from Remote Work • Understand what constitutes “hours worked” in applicable jurisdiction • Review and comply with applicable state and local laws • Research software options for tracking hours worked • Have clear policies re: overtime, off-the-clock, and meal & rest breaks • Include safe harbor provision in policies regarding erroneous deductions • Conduct training on all wage and hour policies

Tips for Minimizing Wage and Hour Risk from Remote Work • Require all employees (exempt and non-exempt) to record their hours worked • Conduct periodic audits to ensure accurate recording • Provide employees with a laptop and cellphone, if needed, for business purposes, and comply with state and local requirements for business expenses • Field Assistance Bulletin No. 2020 -05 (Aug. 24, 2020) – If you know work was performed but not reported, pay for it – Establish a reasonable process for employees to report uncompensated work – Employee fails to report, employer is generally not required to investigate further and is not required to undertake impractical efforts to determine employee work hours

What Does a Home Office Really Look Like?

Ergonomics 101 • OSHA: “Ergonomics is the science of fitting the job to the worker” • No specific OSHA provision, Think General Duty Clause • Ergonomics focuses on limiting the risks and dangers of musculoskeletal disorders (MSDs) • Common MSDs include: – Carpel tunnel syndrome – Tendinitis – Rotator cuff injuries (shoulder) – Epicondylitis (elbow) – Trigger finger – Muscle strains and – Lower back injuries

Ergonomics 101 • According to OSHA, work-related MSDs are one of the leading causes of lost work time • About 1/3 of all worker injury and illness cases are due to MSDs • In a traditional office workspace, ergonomics typically involves: – Adjustable computer monitor height – Adjustable (“standing”) desks – Chairs with appropriate lumbar support – Adjustable arm rests – Foot rests – Arrangement of furniture and objects on the desk to minimize reaching/turning

Best Practices for an Ergonomics Program • Regardless of whether employees are working in an office or remotely, the basic foundation of an ergonomics program should include the following: – Involve employees in the assessment process to identify existing hazards and concerns – Provide training on both the benefits of ergonomics and risks of MSDs – Identify ergonomics problems before MSDs occur – Encourage the early reporting of MSDs – Reduce existing hazards that cause MSDs – Evaluate the progress of the ergonomics program

Transitioning Ergonomics into the Home Office

Preliminary Review of Home Offices • Study by the University of Cincinnati College of Medicine received survey responses from 843 university employees who transitioned to remote work due to COVID-19 • Common issues identified – 41% of chairs were too low, and 2% were too high – 53% of employees have armrests on chairs, but 32% don’t use them – 18% of employees had armrests that were incorrectly adjusted – 73% of employees’ chairs had no lumbar support – 52% of computer monitors were too low, and 4% were too high

How to Analyze an Ergonomics Claim • At this point, there isn’t enough determinative case law regarding ergonomics in the home office • EEOC would likely analyze a home office ergonomics request under an undue hardship analysis, if a disability is present • Like accommodations, no unreasonable and unduly burdensome accommodations • Instead, employers owe a duty to engage in an interactive process • This analysis further hinges on whether a telework assignment is temporary or permanent and at the company’s request/order or the employee’s request

Analysis of an Ergonomics Complaint IF THE REMOTE WORK IS TEMPORARY: • Then the employee’s “workstation” is not the employee’s home, but rather in the office/traditional workspace • Employers should supply all of the equipment necessary for the employee to continue working, and cannot make the employee pay for business expenses that will decrease the employee’s pay below minimum wage • As long as the assignment is temporary, a court would likely find that it is unreasonable for an employer to outfit both the traditional office and a home office with ergonomics-friendly equipment

Analysis of an Ergonomics Complaint IF THE REMOTE WORK IS PERMANENT: • Then the employee only has one workstation: the employee’s home • EEOC and courts will likely be more aggressive in enforcing ergonomics requests and determining whether a request results in an undue hardship • Really no difference between providing an employee a standing desk or ergonomic chair in the office or providing the same chair to an employee working from home permanently (or for an extended period of time)

But. . . Accommodations Have Limits • Even if permanent (or long-term) and even if an employer has a duty to provide ergonomic office furniture, the accommodation must be reasonable • Not required to provide the equipment or furniture of an employee’s choice • Accommodations need not fit home office design scheme • Not required to tender the cost of a piece of furniture to employees to choose their own ergonomic equipment • Only provide reasonable accommodations, and prioritize open communication and the interactive process

ADA Best Practices for Telework • In all COVID-19 guidance, the EEOC continues to stress that the ADA continues to apply to in-person and remote work • Continue to utilize existing policies and procedures regarding the interactive process • Employers are still entitled to ask questions, receive documentation, and ultimately decide whether a requested accommodation is reasonable • Again, accommodations need not need to be what the employee chooses

Is the COVID-19 Teleworking Trend Temporary? • Company-specific • Announcements extending telework through the middle of 2021 make the assignment look more permanent, while other companies are transitioning back to in-person functions • Factors to consider regarding ergonomics request: – CDC and public health agency guidance on safe to return to work – State and local orders regarding staying home, essential work, and safe return to work – Company-specific considerations such as the cost of continued telework compared to in-office operations and realistic expectations of when employees will return

Return to Work Checklist • Detailed checklist to be completed by site • Cleaning standards (shared equipment, daily procedures, timeclocks, vending machines, 4 x per day for common touch areas) • Physical plant (ventilation, conference rooms, space between desks, cafeterias, directional pathways, elevators) • Signage (hygiene, social distancing, masks) • Entry requirements and supplies (touchless options, health check, approach to visitors) • Training • Waves by % of customary population • Status of community spread, public transportation, testing availability considerations • Local government orders • Employee sentiment • Checklist items by department Facilities/EHS HR Supply Chain Marketing/Sales/Service Privacy/Legal IT Comms Finance

What if an Employee Refuses to Return to Workplace • Inquire as to why they do not want to return: – Underlying medical condition or pregnancy ? Go through ADA interactive process, consider FMLA (if applicable) – Concern over safety practices in the workplace? Employees with particular safety concerns may be protected from retaliation under OSHA and, if shared with other employees, protected under the NLRA for raising safety concerns – Prefer to collect unemployment? No job protection – Generalized fear? No particular job protection – Need to care for children off school? State or Local Paid Sick Leave? If not, no job protection. But consider available leave • Consider PR and morale issues

Applicable Laws to Consider • Americans with Disabilities Act • Title VII / Pregnancy Discrimination Act • State and local laws protecting individuals with disabilities or requiring remote work • NOTE: Courts have found physical attendance is an essential function – What does your job description say? – What are the employee’s true job functions? – What other accommodations are reasonable?

EEOC 2003 Guidance • Changing the location where work is performed may fall under the ADA's reasonable accommodation requirement of modifying workplace policies, even if the employer does not allow other employees to telework • Employer is not obligated to adopt an employee's preferred or requested accommodation and may instead offer alternate accommodations as long as they would be effective.

Accommodation Reminders • Request for accommodation may be formal or informal and does not need to expressly refer to a “reasonable accommodation” – Oral or written requests stating that a change is needed is enough to trigger the interactive process • Employers may request medical documentation to determine: – Whether the employee has a disability; and – If a reasonable accommodation can be provided without undue hardship • If an employer knows the employee is high risk but does not request an accommodation, the employer is not required to take any action, unless it becomes apparent the employee may require an accommodation and then the employer may need to engage in the interactive process.

Interactive Process Questions • How does the disability create a limitation • Does requested accommodation effectively address the limitation • Would another form of accommodation could affectively address the issue • How with the proposed accommodation enable the employee to continue performing the “essential functions” of the position – the fundamental job duties

Reasonableness / Undue Hardship • • Same factors considered for Reasonableness and for Undue Hardship Burden of Proof on Employer for Undue Hardship “Significant difficulty or expense” In the pandemic, may be significant difficulty to – Reassign marginal functions – Provide employees with temporary assignments – Hire temporary workers for specialized positions • In assessing significant expense, “the sudden loss of some or all of the employer’s income stream because of this pandemic is a relevant consideration” (EEOC Guidance)

EEOC Guidance – Factors to Consider • Employer's ability to supervise the employee adequately • Whether any duties require use of certain equipment or tools that cannot be replicated at home • Need for face-to-face interaction and coordination of work with other employees • Whether in-person interaction with outside colleagues, clients, or customers is necessary • Whether the position in question requires the employee to have immediate access to documents or other information located only in the workplace.

EEOC Guidance & Practical Considerations • Don’t deny a request to work at home as a reasonable accommodation solely because a job involves some contact and coordination with other employees • Consider meetings by telephone or Zoom, Teams or other platforms • If you have been allowing employees to work remotely for months due to COVID-19, you will have to show why it is an undue hardship to offer it now – Were essential functions removed/excused due to emergency COVID response? – Did productivity suffer? – Was work quality diminished? • EEOC says offering remote work due to COVID-19 does not necessarily mean it is a reasonable accommodation in the future, but employers must articulate why not

Accommodation Documentation • Document all accommodations considered with reasons any ruled out as unreasonable / cause undue hardship • Implement the selected accommodation ASAP • Document the scope and duration of the selected accommodation • Communicate the alternate work assignment or other measures to the employee (and manager), including any schedule or location change, anticipated end date, and any other requirements • Make clear that additional discussion will occur if at the end of the accommodation period the employee still requires accommodation • Communicate expectations to employee

Ogletree COVID-19 Litigation Tracker • • Ogletree. com COVID-19 Resources LITIGATION (Green Button) Interactive COVID-19 Litigation Tracker • Sort by State, Type of Claim, Allegations, and Industry • Case Summaries

Ogletree COVID-19 Litigation Tracker

Workplace Safety and Minimizing Risks • The federal OSHA statutes impose requirements on employers and impose various posting and recordkeeping requirements • How does OSHA come into play with remote work? • For home offices: • No inspections • Employers not liable and not required to inspect home offices • If OSHA receives a complaint, complainant will be advised of OSHA’s policy

Workplace Safety and Minimizing Risks • For home-based worksites: • OSHA will conduct inspections (e. g. , of home-based manufacturing facility) only when receives a complaint of violation that threatens physical harm or imminent danger exists • Scope of inspection limited • Employers responsible for hazards caused by materials/equipment that employer provides or requires • Inspections will follow set procedures • States may impose additional restrictions or requirements

Workplace Safety and Minimizing Risks • Ensure telecommuting employees are included in any applicable training • Instruct employees to immediately report any work-related accidents or injuries • Consider requiring employees to maintain a safe working environment at home • Consider maintaining the right to conduct home workplace visits in Remote Working Policy • Educate on Home Office Safety: – Example: federal government’s safety checklist for federal teleworking employees: https: //www. telework. gov/federal-community/telework-employees/safety-checklist/

Teleworking Tax Implications • State Income Tax Withholding – Driving factor – where services are performed – Certain exceptions for bilateral reciprocal agreements – If temporary working arrangement – state-by-state analysis • Some states have non-resident thresholds (i. e. , AZ is 60 days; NY is 14 days) • Most states are Day 1/Dollar 1 – Enforcement lax – If employee relocates on a permanent basis because they can work remote • New state becomes domicile state for state income tax purposes • Is the employer registered to do business in that state because permitting employee to work remotely may create a sufficient corporate nexus • Other social taxes, premiums and benefits – Paid family and medical leave, disability leave, unemployment benefits – Generally determined based on where services are localized (majority of services performed)

What Might the Future Look Like? Considerations: • • • Productivity and Engagement? Director of Remote Work “Zoom towns” Larger talent pool options Rethinking of pay based on market/cost of living Changed nature of office space Impact on diversity efforts Disparate impact Return of remote work stigma? Potential impact on promotion Remote work savings for employers $11, 000 per year for every person who works remotely half of the time

Thank you! Adam T. Pankratz Shareholder, Ogletree Deakins adam. pankratz@ogletree. com Cathi Hunt VP and Associate General Counsel, Labor & Employment and Litigation, Vontier Corporation Cathi. hunt@vontier. com