Probably the biggest trend in employers’ approaches to return-to-work protocols is the adoption of hybrid plans—partly allowing continued work from home or other remote work, while requiring or encouraging presence in the office on some regular basis.
Sounds simple, right? Not so much. First, there are virtually an infinite number of approaches employers can take to hybrid work arrangements, which can range from incredibly flexible to quite rigid. Second, hybrid work arrangements give rise to an innumerable set of legal and human resources issues, many of which lack clear answers.
What Is Hybrid Work?
First, what exactly is a hybrid work arrangement? The common element in any hybrid work arrangement is that it allows an employee to work both from the office and remotely on some agreed basis. Beyond that common element, hybrid work arrangements can have a virtually infinite number of variations.
At one end of the spectrum might be an arrangement that allows employees to work in the office or remotely as and when they see fit. Under this approach, some employees may choose to work from the office daily, while others choose to come in only when necessary.
At the other end of the spectrum might be a highly scheduled and relatively inflexible arrangement that requires the employee to be in the office on specific days each week with only occasional, scheduled opportunities to work remotely.
Not surprisingly, early press reports and surveys suggest that most employers adopting hybrid work arrangements are taking a middle path: allowing the employee to split their time between in-office and remote work on something like a 50/50 or 60/40 basis.
But even this middle of the road approach raises questions. For example, will the employer merely encourage, or will it require the employee to be in the office the specified percentage of time? Will the employer dictate the employee’s schedule, specifying the days to be in the office and days for remote work?
The approach selected likely will vary based on the employer’s needs and culture. But whatever approach the employer takes, a hybrid work arrangement presents all sorts of new legal issues for employers. Let’s look at some them.
Providing a Safe Workplace
One often overlooked issue relates to the employer’s duty to provide a safe workplace and the tools employees needs to perform their job. When employees worked remotely only occasionally and for the employee’s own convenience, this was not much of a concern.
But under a hybrid arrangement in which the employee is working remotely on a regular basis the employer’s duty comes to the fore. For example, will the employer need to provide the employee an ergonomic chair for the home office if the employee has back trouble? What about a printer?
In some states, employers violate the law if employees bear any of the expense incurred to perform their job. These laws may require the employer to reimburse the employee for at least a portion of home Wi-Fi charges and telephone bill, not to mention supplies such as printer paper and binder clips.
Paying Taxes
Then, there is the thorny question of taxes: if the employee splits time between working from the office located in one state and working from home in another state, to which state does the employee owe income taxes? For which state(s) should the employer withhold state income taxes? Relatedly, to which state should workers compensation withholdings be paid?
Even more problematic for employers is the question of “nexus” for entity level (e.g., corporate) tax purposes. Generally, businesses must pay taxes in any state in which they do business, and having employees working from the state on a regular business qualifies as doing business.
During the pandemic many states decided not to treat a business as having a nexus subjecting it to tax in that state solely because some of the business’s employees had elected to work remotely from that state during the pandemic. Post-pandemic, there will be a good argument that employees working from home in a state other than that in which the employer’s office is located subjects the employer to taxes in both states.
Similarly, businesses will need to consider whether having an employee work from home in a state other than where the employer has an office will mean that the employer will need to “qualify to do business” and be subject to suit in the employee’s home state.
Managing Performance
Hybrid work arrangements also present new challenges for employee performance management. Will supervisors be able to provide appropriate and timely feedback to employees whom they see only rarely because of their hybrid work schedules? What new approaches will be required to the training and development of employees?
These questions barely scratch the surface; hybrid work arrangements raise many more issues and challenges that space constraints preclude me from addressing here. The key point is hybrid work is very different from our traditional model of office work.
Our laws and HR practices were developed under the traditional model of in-office work, so hybrid work is a brave new world for employers to navigate through. But there is no turning back.
Employees increasingly demand the flexibility and lifestyle benefits afforded by hybrid work, and the competition for top talent demands that employers adapt to the new reality of hybrid work arrangements.
This column does not necessarily reflect the opinion of The Bureau of National Affairs,Inc. or its owners.
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David Barmak is a member at Mintz in Washington, D.C., and chair emeritus of the Employment, Labor & Benefits practice. He represents employers and their executives in a wide range of employment law related issues.