As your favorite employee walks in an hour late, looking a little haggard from his nightmarish commute, he looks at you and says, "Either I work from home, or I quit." You hope he's not serious. Isn't working from home an oxymoron?

Actually, no. In fact, telecommuting grew at a rate of over 20 percent from 1999 to 2000, according to the International Telework Association and Council (www.telecommute.org), a nonprofit that provides education and research about telecommuting.

Some people, especially ones who primarily work with information - analyzing, writing, or editing - are often able to work more productively on their own time, without the distractions of the office.

And if your staff begins to outgrow your office space, allowing a couple of employees to work from home on alternate days and to share their in-office workspace could ease the congestion. You may also have an easier time hanging on to valuable employees and attracting job candidates if you offer them the flexibility of working from home.

If you're ready to implement a telecommuting program, here's what you need to do to get started. Ask your employee to set up a separate work area at home so he or she is not working off the kitchen table or the sofa.

While there are no government policies about who pays for the initial setup of a home office, which generally includes a desk, ergonomic office chair, computer, Internet access, printer, phone, and perhaps a file cabinet, you should address this with your employees from the outset.

Except when hazardous materials, equipment, or processes are involved, the Occupational Safety and Health Administration (OSHA) does not hold you liable for work activities and work conditions in employees' home offices, nor does it expect you to conduct inspections of home workspaces.

Nonetheless, as a responsible employer, you should educate your employees on how to construct an ergonomic workspace. Draw up a telecommuting agreement that covers health and security concerns so both you and your employees are clear about each other's responsibilities.

If you expect employees to dial in to the company network or to take work calls at home, explore paying for a second phone line and for Internet service. See if your company phone system can automatically forward calls to workers' home numbers on days they work remotely.

If corporate security is an issue, consider getting a Virtual Private Network (VPN) connection, which lets off-site workers connect to the company network securely through the Internet. A VPN appliance that can handle up to 50 users simultaneously costs about $3,500.

Typically, letting an employee telecommute one to three days a week works best. Otherwise, there may be an overall drop in productivity and effective communication if the employee doesn't have a couple of days to meet face to face with co-workers.

Given the rising popularity of telecommuting, it may be wise not to clutch certain employees too close to your chest - and let them work out of their homes on occasion.