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In brief

Tech companies are using their own technology to make remote work easier and re-imagine the future of work. Many are considering a more flexible workplace with some or all employees permitted to telecommute for some or all of the time even after the pandemic ends. These companies will maintain their physical office space (potentially with a reduced footprint) and employees remain tied to their current employer and office location (but gain greater flexibility). Others are looking at more radical change, minimizing or even eliminating physical office space and allowing employees to work permanently remote, whether in countries/states in which the company already has operations or anywhere in the world.

Permanent remote working brings many potential benefits to TMT employers including: savings in real estate, access to a wider talent pool, increased productivity, and increased retention. Of course, it also brings challenges including how to maintain culture, collaboration and engagement as well as preventing remote workers feeling isolated and digitally fatigued. Recognizing that there are many integrated legal considerations and drivers, including employee compensation and benefits, data privacy and trade secrets, corporate law, and corporate tax, what follows is a basic 5-step blueprint of the employment law considerations for building out your company’s remote work plan.

Step One: Define “Remote”

First, companies must define what they mean by “remote.” Most employers are familiar with the concept of telecommuting and have allowed certain employees privileges to work remotely from home on occasion. What we are seeing now, however, is a different trend towards “temporarily remote” work and “permanently remote” work. Temporarily remote work typically refers to employees who are either working from home now due to a local shelter-in-place order, or employees who are working from locations other than their primary residence (because they have been “stranded” at various borders, need to care for family members, etc.), but who do expect to eventually return to the office. Permanently remote work refers to employees who could work from home, or anywhere else, “forever” with no expectation of ever coming into an office.

There may be yet another group of employees who desire flexibility, and would like to come into an office a few days a week. How a company lands on one (or several) of these scenarios, contemplates embracing them or looks at limiting options, depends on a number of factors, including the industry, business model, location of the offices / workforce, footprint and internal company technology and resources.

Step Two: Set the Guardrails by Choosing Locations and Monitoring Headcount Triggers

While the simplest approach for determining locations for remote work is to limit employees to working from their primary residence only (i.e., working from home which is theoretically in the same location as their office), that is rarely the reality. Even then, there will be various employment law issues to consider, including ensuring that telecommuting employees remain subject to company rules and expectations; implementing a compliant office expense reimbursement policy; clearly defining the workspace and work time to establish some reasonable limits on the employer’s responsibilities for accidents and illnesses that may occur; and more.

More often, however, the decision point is whether to allow employees to relocate to states or countries where the company does not yet have a legal presence. If employees will only be allowed to work remotely from locations where the company already has a corporate presence and ability to payroll, that raises issues more akin to “scaling up” activities. If employees will be allowed to work remotely from locations where the company has no corporate presence or ability to payroll, then all of the legal issues raised when expanding into a new location are triggered. Consider that the mere presence of employees working from home in a particular state or jurisdiction may constitute a presence of the employing entity in that location for corporate tax purposes.

Step Three: Design an Application Process with Established Criteria

As with any new program, set out a clear policy on the application process and eligibility criteria. A few key tips to mitigate legal risk and preserve flexibility are: develop template application requirements, such as minimum seniority, excluded positions, interview with management in the new location, whether a justification is required; determine which job positions can be performed productively in a remote setting; define eligible locations and decide whether to implement headcount limits by qualifying location; establish objective criteria for accepting and rejecting applications; consider that once the remote work policy is implemented, it will be difficult for the company to reject remote work requests outside of the policy (e.g., as a reasonable disability accommodation) on the basis of business hardship. The communication related to this application process should make clear that the applicant is responsible for all changes in the individual’s tax consequences as a result of relocations made in connection with the program.

Step Four: Craft Policies to Support the Remote Model

There is a laundry list of issues to address when implementing a remote work program, all of which can be rolled into a Remote Worker Policy. For example, consider the following:

  • Salary / cost of living adjustments may be appropriate depending on the transferring employee’s new location;
  • Costs / equipment: address how the employer will provide remote workers with the equipment necessary to perform their jobs and whether the employer will cover certain costs of remote working;
  • Timekeeping: the company is required to track hours / overtime for remote workers in accordance with applicable local law;
  • Rest periods: the company is required to provide mandatory rest breaks to remote workers in accordance with applicable local law;
  • Update business travel policies;
  • Information security: remote working carries increased risks of misappropriation of confidential information and loss of trade secret status.

Step Five: Communicating Expectations and Compensation

Given the importance of clearly communicating expectations of working remotely, as well as potential changes in compensation, best practice includes providing employees with an individualized Remote Work Agreement. In addition to communicating the effective date of the arrangement, expected hours of work, home office inspection agreement, use of equipment, reimbursement / stipends and insurance requirements, oftentimes, companies will align compensation with the local market / workforce. Likewise, it is essential to confirm the work location (to document the employee’s representation of which state they are actually working — and paying taxes in), and remind employees that they continue to be responsible for the tax consequences.


Susan Eandi is the Chair of Baker McKenzie's North America Employment and Compensation Practice Group, head of the Global Employment and Labor Law Practice for North America, and a member of the North America Regional Management Council. She also serves on the Firm's Antiracism Legal Impact Board. Susan speaks regularly for organizations including ACC, Tech GC, Silicon Valley AGC and World Business Council for Sustainable Development. Susan publishes extensively in various external legal publications in addition to handbooks/magazines published by the Firm. Susan is a recognized leader in employment law by International Employment Lawyer, The Daily Journal, Legal 500 PLC and is a Chambers-ranked attorney.


Caroline Burnett joined Baker McKenzie in March 2016 and is a senior knowledge lawyer for the North America Employment & Compensation Practice Group in San Francisco. Caroline is responsible for knowledge management for over 100 lawyers in the Firm's North America offices. She is focused on enhancing technical standards and improving efficiency, as well as producing pragmatic and commercially minded thought leadership for the Firm's clients. Before joining Baker McKenzie, Caroline spent a decade in private practice.