Telecommuting: The Future Office or an Insurance Nightmare?

Telecommuting can be defined as the practice of employees working out of their private residences on a regular basis (once a week, twice a week, or more). With advances in technology (e-mail, computer networks, fax modems/machines, phone systems, etc.) telecommuting continues to increase at a steady rate. This virtual office atmosphere (being able to be connected essentially anywhere) has significantly increased the number of employees who can perform their jobs effectively from home. Tens of millions of Americans work at home on a regular basis. Some employers view telecommuting as the cure-all to reduce fixed costs associated with real estate and to lure prospective employees to their workplace. Questions have persisted in the minds of some about the pros and cons of telecommuting. From the risk management standpoint we need to ask: Do we really understand the potential risk ramifications of telecommuting?|

Dirk Duchscherer

April 20, 2011

Some employers view telecommuting as the cure-all to reduce fixed costs associated with real estate and to lure prospective employees to their workplace. Questions have persisted in the minds of some about the pros and cons of telecommuting. From the risk management standpoint we need to ask: Do we really understand the potential risk ramifications of telecommuting? Telecommuting can be defined as the practice of employees working out of their private residences on a regular basis (once a week, twice a week, or more). With advances in technology (e-mail, computer networks, fax modems/machines, phone systems, etc.) telecommuting continues to increase at a steady rate. This virtual office atmosphere (being able to be connected essentially anywhere) has significantly increased the number of employees who can perform their jobs effectively from home. Tens of millions of Americans work at home on a regular basis. The Benefits

Millions/billions saved in real estate costs including heating/cooling/electrical, etc.
Increased productivity to the company -- employees are allowed to work at their own pace/environment with fewer interruptions.
Environmental benefits from less fuel consumed and less pollution.
Shorter commute times for those who still go to offices as a result of fewer vehicles on the road.
“Flex” time for family commitments and increased employee satisfaction.

It is also necessary to provide work-at-home employees with the same safe environment given to office employees. Each employer is required by OSHA to provide employees with a safe work environment regardless where the “work” is located. There was a proposal by OSHA to require home-office inspections but it was quickly dropped. Challenging Insurance Issues

When are (are not) employees working?
If an employee slips and falls, was the employee working or taking out the trash?
What happens if an employee goes to the grocery store during the workday and becomes involved in an auto accident?
What if the employee is attacked in their own home during working hours?
Who pays for equipment and furniture?
Who pays for equipment and furniture if it is damaged in a fire or stolen?
What if a fire is caused by excessive electrical requirements of computers, fax machines, copy machines, and other business equipment?

Many of these issues are handled on a case-by-case basis depending on jurisdiction. While it seems clear that there is liability associated with injuries that occur in the home office, it is less clear how you can prove work-relatedness or non-work-relatedness. When accidents happen there are rarely any witnesses. Case law is being developed to address some of these issues but most cases are still decided based on the individual circumstances. The property damage/loss issues need to be established as company policy. Most employers do not provide deluxe home offices for their employees. Many do provide an assortment of equipment (computers, phones, fax machines, etc.) to help the employee stay connected with the workplace. These items are business equipment and probably not covered by the employee’s insurance policies. Employee Perceptions Some employees are very comfortable telecommuting and being away from their fixed, corporate office. Others are concerned about their ability to work with the constant distractions of their home and family. Still others do not have or want to make room in their homes for a home office environment. There are valid concerns about staying visible to their co-workers and their management. Many employees feel isolated and not “part of the team.” The flexibility that telecommuting allows is unquestionably of great value to many employees but it is not for everyone. The positive goodwill generated by the telecommuting environment often encourages employees to work longer and have a better opinion of the company. Ergonomics A majority of telecommuters are computer users. After all, it is technology that has enabled many employees to become telecommuters. The ergonomic concerns for home office workers must be addressed to minimize this significant risk factor. Employee education and training is the most effective tool. Home office inspections by trained ergonomists are usually not completed due to the cost involved and the perception of invading the privacy of the employee. Many employees are not inclined to personally spend the money required for the proper equipment. If their employers do not provide the equipment, the employees use whatever equipment they have. This includes working at fixed height tables with non-adjustable chairs .... generally an ergonomic nightmare. Educational efforts should be focused on the importance of having a good chair and adjusting the chair and workstation surface to minimize awkward postures. Excellent ergonomic training materials are readily available. The issue of laptop computers must be addressed in your ergonomics program. A laptop is not designed for regular use – the keyboard is too small and either the keyboard or monitor screen will be in a poor position with respect to allowing neutral postures. Laptop uses should be provided docking stations with separate monitors and keyboards. At a minimum, employees should have a separate keyboard and mouse such that the laptop monitor can be raised to an appropriate level to allow for neutral postures. The importance of exercise and stretching can not be overstated for computer users. The affects of non-occupational activities (such as additional computer use or video game playing) must also be stressed during educational efforts. Security Issues From a risk management perspective, another important aspect to consider is network security. Dial-up connections are inherently less secure than the network connections in the office. Remote users often neglect back-up storage of critical information. These issues need to be addressed through your business continuity and information technology plans. Also, business interruption exposures may exist at home and between office networks from undetected viruses or lack of anti-virus protection programs. Telecommuters can be a significant component of your business continuity plan (BCP) . If your central office location is destroyed it typically does not impact the telecommuters workspace. Alternate computer networking arrangements are still critical. To be truly effective, your BCP must include a risk assessment at each home office location. Telecommuting Safety Program No matter how small or large your organization may be, every employer needs to establish a Telecommuting Safety Program. Such a program might include the following: Objective To reduce the frequency and severity of work-at-home accidents and incidents by informing telecommuters of their safety and health rights and responsibilities. Program Elements A. Employee training B. On-site hazard assessment C. Safety and health consultation D. Accident investigation E. Provision of appropriate safety and health devices F. Contract with employees authorizing home visits Employee Responsibilities A. Conduct in-home inspections B. Complete training C. Report all incidents Evaluation Mechanisms A. Incident rates B. Incident report forms C. Workers’ compensation claims D. Employee feedback Specific Questions to Consider Home Inspections

Is there a functioning smoke detector in the employee’s home?
Are there two or more means of exit/egress from the work area?
Are aisles/passageways in the work area clear at all times?
Are work area properly illuminated?
Are electrical cords/wiring adequately loaded/grounded?

Ergonomics

Is the workstation properly adjusted?
Have employees been trained on ergonomics?

Air Quality

Are gas fired appliances provided with exhaust vents?
Has indoor air been tested/evaluated for humidity, moisture, radon, carbon monoxide/dioxide, etc.?

Incident/Accident Investigation

Have company policies been established and implemented stating who will perform home inspections and incident investigations to address potential “invasion of privacy” issues?

Company Responsibilities

Has training been provided in home inspections, ergonomics, fire hazards, trips/falls, etc.?
Are computer equipment and office furniture provided and set up to meet employee needs?

Employee Responsibilities

Have employees completed all work-at-home training programs?
Do employees follow all established policies regarding home inspections and incident/accident reporting?

Evaluation

Has an annual evaluation of the Telecommuting Safety Program been performed?
Does comparison of telecommuting vs. office incident rates justify continued telecommuting?

Conclusion Telecommuting is here to stay. There are too many benefits for employers and employees. As risk management and insurance professionals we need to acknowledge the risks presented by telecommuters and identify and implement corrective actions to minimize our exposure. Authors Dirk Duchsherer collaborated with Steve NyBlom (CSP, CPEA, ARM, ALCM) in writing this article. Steve is the Assistant Administrator of the Risk Management/Insurance Practice Specialty and is a Vice President with Aon Risk Services in Los Angeles, CA.