Remote Work and Potential Employment Practices Liability Perils

Remote Work and Potential Employment Practices Liability Perils
September 12, 2024 5 mins

Remote Work and Potential Employment Practices Liability Perils

Aon analyzes employee perception about return to office policies following the COVID-19 pandemic, as well as recent actions one organization took for alleged lack of remote employee productivity. 

Key Takeaways
  1. Efforts to have employees return to the office following the COVID-19 pandemic increased tensions between some employees and employers.
  2. A financial institution recently implemented monitoring technology to track employee productivity, ultimately resulting in several employee terminations.
  3. Understanding employee perception of your organization can be a first step to mitigate EPL risk and to align an organization’s goals with employee expectations.

During the COVID-19 pandemic, various state and federal mandates normalized remote work. As restrictions eased, organizations started implementing return to office protocols and some employees sought to stay at home, increasing tensions. Subsequently, some companies started monitoring remote employees using technology.

Recently, a large financial institution using monitoring technology terminated several employees for faking keyboard strokes. As there is no report that these employees sued their former employer over their termination, any potential coverage under an EPL policy is hard to predict. Coverage would be highly dependent on how the workers allege that they were wronged.

Nonetheless, we can make assumptions about whether the employee terminations would trigger a defined peril and constitute a claim.

Many EPL policy definitions of Workplace Tort include “invasion of privacy” language. Clarifying language is sometimes added to specify that an invasion of privacy includes, but is not limited to, violations of the Health Insurance Profitability and Accountability Act (HIPAA), the Fair Credit Reporting Act (FCRA), background checks and screenings. This type of employee tracking does not run afoul of health and credit laws or pre-employment tests, but it fits within the plain meaning of ‘invasion of privacy.’ In addition, most, if not all, policies include the broad defined peril of Wrongful Termination. If workers were being monitored without their consent, it is possible that a potential allegation could trigger a wrongful act under an EPL policy.

The implementation of employee monitoring technology is not the only way companies can monitor employee productivity within hybrid work environments. There are multiple studies linking employee productivity to workplace sentiment and perception of company culture, with more positive sentiment tending to result in more productive employees.

Aon provides insights into recent trends in employee sentiment and has looked at the range of employee reactions following return-to-office or other working style announcements. We find there are three central determinants of employee perception:
  • Role of middle managers: a strong middle management function is the most common predictor of positive employee perception of leadership decisions and company culture. Inconsistency within this group typically translates to feelings of confusion or frustration among employees, sometimes even leading to employees perceiving the company as having outdated, biased, or discriminatory intentions when implementing new working styles.
  • Importance of communication channels: in the absence of clear and comprehensive communications about the changes, employees tend to fill this information vacuum with feelings of anxiety and scrutiny. There is no one-size-fits-all approach to communication, but some best practices include providing opportunities for employees to interact with senior leaders (typically via town halls), setting clear expectations around compliance and sharing how exceptions will be determined, and providing opportunities for employees to share feedback (typically via survey or working style selection).
  • Flexibility in approach: while companies must be careful to not make too many changes, employees are usually receptive to shifts in approach if the initial rollout is not going well. This demonstrates active listening by the company’s senior leadership and results in more buy-in from employees.

Defining Effective Culture

How companies can redefine a 2024 workplace culture that creates alignment between business goals and employee expectations:

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Taking the time to identify the overlap between the needs of an organization and employees is crucial to fostering positive employee sentiment. This creates better transparency and accountability for both parties and provides a larger buffer of positive employee perception that may help mitigate EPL risks.

If you have questions or are interested in coverage, please contact your Aon broker or a member of our Human Capital team.

Aon's Thought Leaders
  • Samantha Manfredini Look
    Vice President, Employment Practices Liability Insurance
  • Thomas Hams
    Managing Director and Employment Practices Liability Leader
  • Katie Hill
    Director, Human Capital

General Disclaimer

This document is not intended to address any specific situation or to provide legal, regulatory, financial, or other advice. While care has been taken in the production of this document, Aon does not warrant, represent or guarantee the accuracy, adequacy, completeness or fitness for any purpose of the document or any part of it and can accept no liability for any loss incurred in any way by any person who may rely on it. Any recipient shall be responsible for the use to which it puts this document. This document has been compiled using information available to us up to its date of publication and is subject to any qualifications made in the document.

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