The Fraud Examiner

Fraud Considerations for Telecommuting Programs

June 2012

By Jacob Parks, J.D., CFE


Working from home has traditionally appealed to employees more than it has to their employers. Overall, the numbers still support this — a 2011 study by the Telework Research Network found that while an estimated 50 million people in the U.S. want to work from home (and have jobs that are compatible with telecommuting), only 2.9 million of them consider themselves to work from home full-time.  However, this trend appears to be shifting. The same study predicted that the number of regular telecommuters in the United States would increase by 69 percent by 2016.


There are many reasons why telecommuting might start drawing more employers, especially organizations that are just starting up or are experiencing significant changes. Many employees like the idea of telecommuting, and such a policy could give employers the edge for hiring elite job candidates. Additionally, overhead costs like office space and parking fees can be reduced by a telecommuting option. For a company with high startup expenses or many new hires, these benefits might be very attractive. 


There are even broader environmental and economic benefits, such as reduced air pollution and traffic congestion due to fewer people traveling at peak hours or during major events. For example, many organizations in London are setting up telecommuting plans to save their employees’ time during the traffic chaos that will be caused by the 2012 Summer Olympic Games.


The decision to implement a telecommuting system for employees requires considerable planning, however. Many of the popular reasons that employers give for holding back on telecommuting programs are related to decreased productivity or discomfort with employees working without a supervisor physically present. Moreover, there are fraud-related implications that need to be taken into account for this issue. The following are some concerns for employers who are beginning (or potentially revising) their telecommuting program, as well as some suggestions to help prevent fraud in this area.


Compensation and Productivity
Telecommuting programs present obvious questions for both salaried and hourly workers: are the employees actually working when they claim they are, and are they as productive as they would be in the office environment? Employees who submit false reports for the amount of time worked are committing a form of payroll fraud. Additionally, a disparity in productivity between employees who telecommute and those who do not hurts a business’s bottom line and can cause resentment among employees.

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