Telework: Opportunity or Threat? | DCR Workforce Blog

Telework: Opportunity or Threat?

Till recently, HR analysts were busy exploring the exciting opportunities offered by innovative technological developments and the flexibility offered contingent workers. Their enterprise led to crowdsourcing and telework assisted by social media and other equally heady developments. Workforces today have gone mobile, remote and flexible with no offices other than their laptops, tablets and mobile devices.

These developments have caused various impressive predictions to be made about the growth of contingent workforce:

  • The U.S. Bureau of Labor Statistics estimates temporary employment at 2.3 million in December 2011.
  • Staffing Industry Analysts projects that staffing employment will reach 3.1 million by 2018.
  • MBO Partners estimates that over 70 million of the private workforce in U.S. will be working independently by 2020.

According to the current trends and developments in the HR space, a not-so-inconsiderable part of this growth in the workforce is expected to go the telework way.

Leading Users of Telework:

The federal government created plans for a teleworking program way back in 1990, offering employees the option to work from home if they wished to. Many congressional programs, including the Telework Enhancement Act (2010) stand testimony to the fact that this trend is supposed to grow; though research shows that some agencies, like the Patent and Trademark Office & the Dept. of Agriculture, are implementing the policy aggressively while others like Treasury are lagging behind. On the whole, the country was geared up to accept telework into its normal work routine. At the last count taken at the Telework Week in 2012, the numbers stood at 69,390 of which 62,450 were federal workers, with 7% of them using tablets.

On the other hand, we have the various freelancing sites of which the major ones like oDesk, Elance, Guru, Freelancer and vWorker have thousands, if not millions, of registered contractors working telecommuting from across the globe.

Why Telework?

Among the benefits counted by federal agencies in using telework is the ability to face budget cuts by achieving cost reductions and boosting productivity. Telework offers the following advantages provided one feels confident about one’s ability to meet the challenges when choosing it as an option.

Advantages:

  • Reduced traffic and commuting at the community level and a reduced carbon footprint.
  • Cost savings on infrastructure at the organizational level.
  • Freedom to achieve better work-life balance at the individual level.
  • Resilient with smart office spaces risk from disasters, natural or otherwise.
  • Opportunity to use office spaces innovatively through hoteling and sharing.

Challenges:

  • Identifying work that can be telecommuted, suitably apportioning and assigning tasks and assembling them back, and solving all glitches that may arise in between.
  • Requires a changed mindset, high levels of trust and a major culture shift away from proud association with smart office spaces and belief in employees’ ability to stay engaged remotely.
  • Loss of direct supervisory control requiring better performance management and accountability.

Recent Developments:

Just when everyone was factoring in the growing use of telework into their projections for the future of contingent work, the law has reared its menacing head in the recent case of Telebright Software Corp. in Maryland. The company was held liable for state taxes in New Jersey just because one employee of theirs teleworks from that state and calls it home!

When the case went up for appeal, even the New Jersey appeals court held the company liable for New Jersey’s Corporation Business Tax! This tax is levied as an annual franchise tax on foreign corporations to afford them the privilege of doing business in New Jersey, while defining business as activities occupying people’s time or labor for profit. The work of the single New Jersey-based employee involving software coding fitted this definition and brought Telebight under the CBT Act. Some look upon this as an attempt by the state to improve revenues without increasing taxes; but the state justifies its action by claiming that the company benefits from the various protections afforded by the state to its single employee.

It boggles the mind to think that the same rationale may be applied to other telecommuters (who may face summary retrenchment on account of this) as well as the thousands of freelance workers registered with the various freelancing sites referred to above. No one really knows how many contractors work remotely to complete tasks of varying complexity and duration for small and medium employers, who seek to obtain quality work while saving on infrastructure and recruitment costs.

Do tell us if you think New Jersey is justified in taking this approach and also if you expect the ruling to stand up in federal court.


Disclaimer:
The content on this blog is for informational purposes only and cannot be construed as specific legal advice or as a substitute for competent legal advice. They reflect the opinions of DCR Workforce and may not reflect the opinions of any individual attorney. Do contact an attorney for advice specific to your issue or problem.
Lalita is a people/project manager with extensive experience in operations, HCM and training and development across industries like banking, education, business consulting, BPO and information technology. She believes in a dynamic approach to life and learning as change is the only constant.