Authors: Sanjana Ahmed, Justin Di Liello
This blog post was prepared with the assistance of MLT Aikins LLP summer student Emily Stolz.
As businesses begin to transition their workforces back into the workplace, many companies are considering keeping some, if not all, of their operations remote.
The pandemic has highlighted technology’s critical role in keeping us all connected and, while some businesses are eager to return to work as soon as possible, many companies in the science and technology sector can easily pivot to permanent work from home models without impacting day-to-day workflow. For some of these companies, “returning to work” after the pandemic might mean never returning at all. Some of the tech giants in Silicon Valley, such as Twitter and Facebook, have recently announced that their employees will have the option to continue working from home once all pandemic-related restrictions are lifted.
While we previously discussed considerations for temporarily implementing effective remote working policies, this blog post outlines the main considerations that science and technology companies should consider when implementing permanent work from home models. A shift to permanent setups creates the need for robust workplace policies and an overhaul of the policies temporarily implemented during social distancing efforts.
First, science and technology companies need to inquire if working from home is an appropriate model for their employees. Employees whose roles are largely independent and require minimal physical resources and/or interaction with colleagues will transition into permanent work from home models more effectively than those who work inter-dependently. This is why the recent trend in the science and technology sector to implement permanent work from home protocols has been coming out of companies whose work forces are composed mostly of programmers and developers.
However, employers must also consider whether work from home setups are suitable for their other employees whose roles require regular co-ordination with their colleagues or whether a socially distanced workforce fits into the culture they are trying to achieve. Further, some employees may find that they are not as productive when working from home or may benefit from periodic meetups with colleagues and/or managers. Companies may want to offer their employees the opportunity to work from the office or, if the company does not have a physical office, provide funding to allow employees to meet up in person (as an example, the company could obtain a membership to a co-working space). Companies may also want to keep newly-hired employees in the office with experienced peers to ensure that employees benefit from the mentorship and learning opportunities that arise in a face-to-face environment. This also provides experienced members with opportunities to assess newly-hired employees to ensure that they are suitable hires for the company.
Companies that offer remote work policies are likely to attract candidates due to geographic flexibility. If an employee chooses to work out of a different city than their employer, will that impact their pay? Facebook CEO Mark Zuckerberg recently announced that employees could move to new locations and work remotely, but their salaries may be adjusted based on the cost of living in the area that the employee moves to.
If a company adopts the same approach as Facebook and it results in a reduction in an employee’s pay, the employee may argue that they are being constructively dismissed as their employer is changing the terms of their employment without their input. If your company is considering implementing a reduction in pay for employees who choose to work from other cities, we recommend obtaining legal advice and would be pleased to offer assistance to ensure any change in employee compensation is done with the appropriate legal considerations in mind.
Performance evaluation and privacy
Many companies will want to take steps to monitor how employees are spending their days to ensure that their productivity levels are not impacted by working from home. While there is a vast array of technology available to employers to track the productivity of their employees, special attention must be paid to the employees’ right to privacy. Federal and provincial privacy laws can be difficult to navigate: employers must ensure they have informed consent where necessary and satisfy all legal requirements when monitoring employee work stations and network use. Science and technology companies making an extended or permanent pivot to work from home setups should consult with a legal professional to ensure that, in the pursuit of maximizing efficiency and performance, they are respecting their employees’ right to privacy.
Cybersecurity and confidential information
If an employee is using their own computer/laptop/tablet or an employer-issued device when working from home, the employer will need to take steps to ensure any confidential information regarding the company is protected. Precautions should be taken to ensure that the ownership and acceptable use of a company’s devices, data, and information is clearly communicated to employees.
As science and technology companies frequently engage with confidentiality and non-disclosure agreements, they should make sure that the employees’ ability to access data and information from home is not a breach of any agreements. A well-drafted cybersecurity policy can be an effective tool for ensuring that employees use and transmit data and confidential information appropriately when working from their homes or shared workspaces.
Health and safety
Alberta’s Occupational Health and Safety legislation requires employers to take reasonable steps to protect the health and safety of their employees, including providing a workplace that allows employees to carry out their work in a healthy and safe manner. The employer’s ability to supervise employee health and safety is significantly reduced with employees working home. It is important that employers regularly communicate with their employees to make sure that the employees are working in a safe and healthy environment that complies with occupational health and safety requirements. This includes, but is not limited to, taking steps to confirm that the employee has ergonomic office equipment that promotes safe posture, suitable screen position, and eye fatigue avoidance; the employee has access to fire safety equipment and a first aid kit; there are emergency procedures in place in the event of an accident; and the employee is taking regular work breaks to maintain their physical and mental health.
As more science and technology companies opt to shift to permanent and extended work from home setups, they may find that their employees are deciding to move to lower cost of living areas, or perhaps opting to move closer to family in other provinces or territories. As discussed above, newly recruited employees may no longer work in the same jurisdiction as where their employer’s offices are located. When these companies pay employee salaries, wages or commissions, they must determine the employee’s province or territory of employment in order to ensure that income tax is properly deducted. For companies operating out of physical office spaces where their employees report every day, this is fairly straightforward – generally, deductions are calculated based on where an employee physically reports for work. If an employee reports to an employer’s establishment, the employee’s jurisdiction for income tax deduction purposes is the one in which the establishment is located. But what happens when employees are working from home?
The rules for deductions may change when companies start rolling-out permanent work from home protocols and find their employees are dispersed throughout Canada. If a work from home employee is still required to report in-person from time to time at an employee’s establishment, income tax would be deducted based on where they occasionally have to report. For an employee who never has to report in-person to an employer’s establishment, income tax would be deducted based on where their salary is paid out of, which is generally where the employer’s payroll department or payroll records are located.
Employers pay attention to ensure that other source deductions, such as Canada Pension Plan contributions and Employment Insurance premiums, are appropriately calculated for employees living in other territories and provinces in Canada. Furthermore, science and technology companies may find themselves with globalized workforces that extend beyond the borders of Canada. As these source deductions and international tax considerations are vital to the success of a company, we recommend that companies in this position consult with a tax professional when determining appropriate deductions for these employees.
Implementing a work from home policy
The issues identified in this blog post address some of the key concerns that arise in the context of working from home arrangements. To ensure your company is properly addressing these concerns, we recommend implementing a clearly worded policy to ensure both the company and the employees are aware of their obligations and expectations in maintaining a successful remote working relationship.
An effective work from home policy will address the issues outlined in this blog post and also contemplate if the work from home arrangement can be canceled or amended by the parties at any given time.
The MLT Aikins Science and Technology team would be pleased to discuss work from home arrangements with you in more detail and assist you with drafting policies that address the concerns raised in this blog post.