Technically, they can monitor you if you have installed any software from the employer or are using a VPN.

I personally use VMware in such cases. It creates a simulated PC inside your own computer, called virtual machine. All employer-specific or suspicious software goes into the virtual machine. This way, even if the employer is spying, they are only going to see what is going on inside the virtual machine.

I also surf the Web from a virtual machine, so that any worms/malware I might catch would not infect my PC or damage any data.