Remote work is now the way of life for many employees and businesses. But the physical nature of manufacturing means the industry has been impacted by the growing trend in unique ways.
Insight on Manufacturing caught up with attorney John Haase, a shareholder in the labor and employment and litigation practice groups of Godfrey & Kahn law firm, to discuss legal challenges associated with out-of-state workers, accommodation requests and minimum wage implications of a remote workforce.
Insight: As someone who works with many manufacturers, how prevalent is remote work in the industry?
John Haase: Most of my clients are in the manufacturing space, and remote work is all across the board. I have several clients who take the approach that if we’re going to have our production people on site, then everyone else is going to come into the office, too. They’re concerned about the team-building issue. There are some that have a little bit more flexibility and will allow for one or two days a week remote. And then I’d say the minority of them went remote during the pandemic with most of their non-production functions, and they’ve left it that way. I’ve seen firsthand their struggle. People got used to working remotely, and then there was pressure to bring people back to the office. So now businesses are working through it to find the right balance.
What is one of the biggest pitfalls of a remote workforce that you see from a legal standpoint?
From a legal standpoint, I think probably the biggest one is legal risk under the wage and hour laws. Both state and federal law have rules about minimum wage and paying overtime. And while they’re conceptually pretty easy to understand, there’s many, many little details where employers can trip up. With remote workers, there’s challenges making sure you’re correctly tracking everyone’s time and that it’s getting recorded, they’re taking appropriate meal breaks and so on. For example, in Wisconsin [breaks] have to be at least a half hour long to be non-compensable. Let’s say you’re not accounting for the 10 minutes it takes to boot up an employee’s computer and that may be compensable time. If you have 200 employees, they can all get joined in a class action lawsuit and then you face back pay for up to three years, plus a penalty equal to two times the back pay. There’s just lots of litigation in this area right now, so you have to have a very good policy that describes the rules of the game. This would be a work hours and timekeeping policy that would be in your handbook that would describe to remote employees when they’re expected to be working, when they’re not to be working, how to record their hours, that sort of thing. If they have to work outside their regular shift, what do they need to do to report that? Things like reviewing emails outside of your regular hours should not be allowed for hourly, non-exempt employees. And make sure your supervisors are checking to ensure employees are following the policies.
Have you seen legal issues from employers with out-of-state employees?
Yes, compliance with state and local laws is another big area. What I’ve seen happen as employers go into more of a remote workforce, they end up hiring employees in a lot of different states. There are all sorts of state-specific laws that are different from Wisconsin that you might need to be aware of when you’re considering terminating an employee in another state. That can also affect areas like family medical leave. Some states have a state-specific family medical leave law that requires even more than the federal law, so you need to be aware of that. There are different rules on what’s referred to as “ban the box” — can employers refuse to hire somebody because they have a criminal conviction? Some states have rules about that; some states don’t. The degree to which you can exclude someone from work because they test positive for marijuana use is a big issue. It becomes a compliance risk that particularly HR teams need to be aware of. If a remote worker is in another state, they need to check with that state’s law before they take action.
Can you legally allow remote work for some employees and not others?
The people on the floor who are producing products need to be there to do that work, but all these manufacturers have employees in various support roles — administrative staff, engineers, designers, accounting, HR — who may be working remotely. It is permissible to allow remote work for some employees and not others so long as you’re consistent among the roles. Where danger might come up is if, without any rationale, you let some people in accounting work remotely but tell others in the same department they can’t. That can create a risk of a discrimination claim. Having different expectations of distinct task categories is acceptable, but you want to be consistent within those functional areas. And then there are certain circumstances where you might have to allow someone to work remotely as a disability accommodation. Employers have to go through the steps of determining if the person is disabled and what are the possible accommodations. Is what they’re asking for reasonable? Does it cause undue hardship? You have to go through that analysis sometimes. So even if you don’t allow remote work, you might have to make an exception for people due to disability accommodation.
