A Complete Guide to Homeworking the Legal Requirements

Employer Obligations For Employees Working from Home

Homeworking is on the rise. According to the Office of National Statistics, by 2020, 50% of the UK workforce will be working flexibly and working from home.

Right now, 4.2 million people call their house their office and the expectation for flexible working is becoming more and more in demand. Is your business ready?

Before you can offer such a benefit, you need to understand the legal requirements for working from home. You also need to make sure that your staff have the tools they need to work effectively while out of the office.


Legal Considerations for Homeworkers

  • Employment contracts
  • Staff Benefits
  • Public Liability Insurance
  • Health & Safety
  • Data Security & GDPR
  • Tax
  • Reporting & Performance
  • Working Time
  • Mortgage Provider Consent
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Employment Contracts – These Must Reflect Homeworking

A standard employment contract will not cover homeworking arrangements. To protect your staff and your business, you need to outline:

  1. Place of work
  2. Hours of work
  3. Expenses
  4. Tax exemptions
  5. Confidentiality & data protection
  6. Rights to enter
  7. Trial periods & review


1. Place of work

If the employee will be working from home, the normal place of work will be the employee’s home. However, include a provision that the employee can be required to attend the office. This gives you the flexibility to call them in when you need them.

You should also include a provision that homeworking is subject to change if the employee moves house. As an employer, you are responsible for your staff, so changes in the place of work must be given due consideration.


2. Hours of work

As well as how many hours they should work, specify when the employee will need to be available for work. Many homeworking employees work flexible hours, so outline their “core hours” and never assume they are doing a normal 9-5.


3. Expenses

Working from home means that employees will be using their internet, electricity and phone for work purposes. So be explicit with expenses.

As an employers, will you cover…?

  • Home upkeep costs (Lighting, internet etc.)
  • Courier/postal costs
  • Stationery
  • Printing
  • Travel

Outline the things your employee can and cannot claim for in their contract. In certain circumstances, payments by employers to reimburse employees for reasonable costs incurred as a result of homeworking can be tax-exempt.


3b. Tax exemptions for employee expenses

To be eligible, the employee must be working under homeworking arrangements. Employers can pay £4/week and the employee doesn’t have to record expenses. Alternatively, employees can choose to seek tax relief arrangements.


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4. Confidentiality and data protection

To protect your business, your staff and your intellectual property, make sure your employee contracts set clear provisions for data security.

These should cover:

  • Use of devices
  • Means of access
  • Your commitments to security

If the employee is using their own computer/phone, ensure you have a right to monitor work communications on those devices.

Make sure they have a password in place to limit access. Also, include in the contract terms that allow you to provide them with any security equipment you deem necessary (shredders, CCTV, filing cabinets etc.)


5. Rights to enter

Consider whether you need to include a licence to enter the employee’s home. You may need to install, maintain or service company equipment, or retrieve it on termination. A right to enter will also allow you to carry out risk assessments for health and safety purposes.


6. Trial periods & Review

Homeworking might not be a good fit for you or your employee. A set trial period and review baked into the contract will give both parties an opportunity to be flexible about homeworking.


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Staff Benefits & Homeworking

If you offer on-site benefits as part of your employment contracts you must offer those benefits to homeworkers too. Failure to do so can result in discrimination allegations and breach of contract.

Ensure, for example, that they have access to work related benefits (such as the staff canteen or workplace gym) even though they may not use them regularly.


Public liability insurance

Check your employer’s liability insurance covers employees working from home. Make sure that any lack of action does not invalidate the insurance.


Health and safety at work extends to the home

As an employer, you are responsible for the health, safety and welfare of your employees. You must exercise all reasonable means of ensuring this.

  • Conduct risk assessments on homeworking environments
  • Create a policy for regularly reviewing home environments


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Data protection and security

Most homeworking employees move data (or devices that can access that data) into public spaces. That opens up the risk of data being mislaid. Many breaches have occurred from documents being left on trains, USB sticks falling out of pockets, or laptops being stolen.

But you can’t just monitor all your employees’ personal dealings. They have the right to privacy.

As the Article 29 Working Party states: “Technologies that monitor communications can […] have a chilling effect on the fundamental rights of employees.”

Stay compliant by setting clear boundaries and responsibilities for all parties. Carry out a risk assessment of the data protection implications of homeworking. This would include consideration of the following:

  • Access to the employee’s computer and home
  • Encryption and data transfer
  • Storage of data



Employees working from home does not change their tax status. You still deduct income tax and national insurance contributions as normal.

However, you may advise the employee:

  • to check any potential council tax liability due to homeworking;
  • that some of their homeworking expenses may be tax-deductible;
  • if computer equipment provided by the employer is used for anything more than “insignificant” private use, a tax charge may arise.


Reporting and performance reviews

Out of sight does not mean out of mind. If you are implementing homeworking, you need to review performance and quality policies. Employees working from home can feel isolated and without support. This can affect morale and company culture.


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Working time

Under the Working Time Regulations 1998, time spent travelling to work does not count as “working time”.

However, where the employee’s normal place of work is their home and they travel to their employer’s premises or to see clients/customers, this could count as “working time”.

You will need to ensure that homeworkers do not exceed the 48-hour limit on their working week when travel is taken into account (or that they have opted out of the maximum hours’ cap).


Mortgage provider consent

Remind your homeworker that they must have consent from their mortgage provider to work from home.


Remember…Equip your staff

There is no legal obligation on an employer to provide the equipment for homeworking. But it only benefits your business to make sure your staff have the tools they need to do the job.

Most employers will provide basic equipment at least. This usually means providing a phone and computer.

If the employee will be using their own computer equipment, agree on whether or not you will pay for maintenance, repairs and software updates.


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Benefits of letting employees work at home

Being able to work at home isn’t just handy for employees. It has can benefit your business, too.

20% of employees that work from home find themselves more productive. With no commute and fewer workplace distractions, your staff get more work done. Giving them the flexibility to choose where they work is considered a benefit. You can attract and retain critical skills and talent.

No commute also means a lower overall carbon footprint for your business. The average commute is 15 miles to work and the same back. If your employee drives an average car, that commute puts 4.6 metric tons of carbon dioxide into the atmosphere every year.

That doesn’t include the cost of heating and lighting a workspace. Letting employees work from home reduces your overheads and frees up office space. In places like London where office space is at a premium, many businesses are opting for hot desking and getting rid of permanent desks altogether.

In order to gain these benefits, you need to make sure you meet certain legal requirements. This includes changes to employment contracts, setting policies for health and safety, data security, tax, public liability and making sure you’re meeting the training and development needs of your staff.


  • Higher productivity
  • Skill retention
  • Better work-life balance
  • Lower carbon footprint
  • Reduced overheads
  • More space in the office