Remote Working Arrangements are gaining in acceptance but bring new complexities

Conference Board research concludes that more companies are now willing to hire remote workers from anywhere.   The September survey of more than 330 HR executives found that 36%, are willing to hire workers who are fully remote living anywhere in the US or internationally. A similar survey conducted in April 2020 found that only 12% were receptive to that approach.   Receptivity to hiring remote workers has also increased from 52% to 88% although half of respondents still prefer that employees live within commuting distance of the office location. When asked to project the future percentage of workers in a remote environment, more than one-third of respondents expect that at least 40% of their employees will work remotely at least three days per week 12 months post-pandemic.  This shift in thinking is due to the challenge of finding qualified workers despite high unemployment (about 75% of companies report difficulty overall both pre-pandemic and now) and the feasibility of remote work forced by the pandemic.

However, as COVID-19 restrictions continue and remote work environment become increasingly steady state, legal and financial issues are surfacing as states impose different standards.

• States vary in how they draw distinctions between independent contractors and employees. Independent contractors who work remotely may qualify as employees entitled to protection by different work rules.
• Professional licenses can impose state-specific requirements.
• Tax regulations and regulated benefits also differ. A remote worker who performs work in a state may be obligated to pay tax there and might create new tax withholding obligations for the employer. Policies regarding paid sick leave, insurance, data privacy, and workers’ compensation vary by state.

The Conference Board Study indicated that 25% of companies that implemented salary/wage cuts during the pandemic had fully reversed this action by September and another 23% had partially reversed this action.  Despite some wage and salary restorations, future cost-cutting measures are planned. Thirteen percent of surveyed companies plan to restructure the organization by year end and 11% plan to cut bonuses. In addition, 9% plan to conduct permanent layoffs and 8% plan to defer pay increases and bonuses [NOTE: this is inconsistent with similar research conducted by Challenger, Gray and Christmas].

Other studies indicate that employers are also considering incremental cost savings associated with their remote workforces.  A survey of 344 employers in North America conducted By Willis Towers Watson indicates that expect more than half of their employees to work from home through at least the first quarter of 2021 and forecast about a third of their employees will be working from home full time in three years, up from 5% three years ago.  A quarter of these employers said they will reduce pay to reflect lower living costs for relocated workers, and another 9% said they will cut compensation for workers who are not in critical roles.  Only 28% of employers said they had no plans to change their compensation regime to adapt to remote work.

Another area of concern is declining employee well-being. Sixty percent of companies surveyed by the Conference Board in September reported that their employees are experiencing increased work hours with 63% spending more time in meetings, 42% are suffering more burnouts, 46% decreased work-life balance and 40% more mental health problems tied to isolation and increased workloads.