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Risks of a Remote Workforce

Addressing the Risks of a Remote Workforce

Risks for a Remote WorkforceWhen the pandemic began, remote work arrangements were the only option for some companies to stay in business. Now, remote work arrangements—full-time or hybrid—have become the norm, with many companies deferring return-to-office policy until 2022. Telework, as it used to be called, offers benefits for both employers and employees. The pros and cons of remote work arrangements were explored in a blog that predates the pandemic; they remain the same. But there are risks that should not be overlooked.

Here are some ideas for addressing selected risks associated with having employees work remotely.

Physical injuries

Workers are covered by workers’ compensation if they experience injuries in the course of their jobs. If they trip at home and break a leg while on the clock, is that a worker’s comp claim? Is Upper Crossed Syndrome, a condition where muscles of the shoulders, neck, and chest are out of balance (perhaps from excessive laptop use in inappropriate positions) grounds for workers’ comp benefits? If a worker can show that an injury is work-related, a claim is likely to be approved. And greater successful claims (referred to as your “loss history”) means higher workers’ comp costs to you.

What to do:

You must carry workers’ compensation coverage (with the exception of Texas) for employees, even if they work remotely. Set policies that help to limit workers’ compensation claims:

  • Track employee hours. Claims only apply to injuries occurring during work hours.
  • Designate workspace. Employees should be required to work within a set area (of their choosing). If they experience an injury outside of the designated space, that’s not a worker’s comp claim.
  • Discuss safety issues. Wires from computers, etc., lighting, and other physical setups can help to minimize accidents and thus limit workers’ comp claims. OSHA won’t do home inspections, but it’s probably a good idea to follow OSHA’s general guidelines for safety.

Trade secrets

Trade secrets remain business assets only as long as they remain secret. Your company’s trade secrets are always vulnerable to employees’ sharing. Having them work remotely increases this vulnerability; household members may view trade secrets on an employee’s laptop or computer screen. And with so many employees changing jobs (the “Great Resignation”), it’s all too easy for former employees to share confidential information.

What to do:

Check state law to see what’s required to protect trade secrets. For example, Florida’s Uniform Trade Secrets Act requires the company to identify its trade secrets (e.g., customer lists, formulas) and use reasonable efforts to maintain secrecy. Likely you’ve had employees sign nondisclosure agreements when they were hired (or if you haven’t done so, do it now). Remind them of this obligation to protect the company’s trade secrets.

Data security

Your company’s network, and all data, are potentially at risk when employees have access to them. Carelessness may result in malware, ransomware, and data exposure, all of which can cost the company big dollars…and, in some cases, bad PR.

What to do:

Review and then enforce company policies about data security. This includes instructions on how employees can secure their devices. Find more information from the FTC on cybersecurity for small businesses with respect to remote access.


If remote employees are in a state that’s different from where the company is located, determine where to withhold state income taxes if applicable. This may be a difficult matter, depending on the states involved. For example, Massachusetts’ temporary law requires withholding of its state income tax from employees who live AND work in New Hampshire now (during the pandemic) but would have paid the tax but for working remotely. The U.S. Supreme Court refused to allow a bill of complaint to be filed, which would challenge this rule.

What to do:

Your withholding obligation depends on various factors: whether the remote arrangement is required by the company or chosen by the employee, the length of the remote work arrangement, and whether states have compacts with respect to state income tax withholding. Consult with your CPA or payroll company to be sure you are handling things correctly.

Feelings of isolation

While some employees enjoy the solitude of working form home, others may feel bad about being isolated …even to the extent of having mental health issues.

What to do:

Continual communication is essential for keeping in touch and, hopefully, minimizing or eliminating feelings of isolation. Of course, there needs to be a balance between excessive virtual meetings and complete silence. During the pandemic, some companies have introduced social meetings or informal online get-togethers to maintain personal connections among employees. Zoom has ideas for creating a sense of community while working from home.

Final thought

It’s pretty certain that remote work arrangements are here to stay, in some form or another. Review your company policies to be sure they align with a remote workforce. Legal, tax, financial and, most importantly, personal considerations come into play. When in doubt about a particular matter, reach out to experts (e.g., attorneys, CPAs) to be sure you’re handling things correctly.