Legal Alerts

DOL Issues Guidance Summarizing Employers’ Obligation to Use Reasonable Diligence When Tracking Remote Employees’ Hours of Work

(August 28, 2020) - Although there are many advantages associated with remote work arrangements, wage & hour compliance is not one of them. It is one of the reasons this type of work arrangement has been adopted more broadly for exempt rather than non-exempt employees. Not surprisingly, however, COVID-19 has dramatically changed how employees work. More employees than ever before are now working remotely, including many non-exempt employees, and this trend likely will continue after the public health crisis subsides. According to research conducted by Global Workplace Analytics, approximately 25-30% of the workforce will work from home on multiple days of the week by the end of 2021.

On August 24, 2020, the United States Department of Labor (DOL) Wage and Hour Division issued Field Assistance Bulletin (FAB) No. 2020-5 to help employers better understand their obligation under the Fair Labor Standards Act (FLSA) to track compensable hours of work performed by remote employees. Although the FAB does not break new ground, it does provide a useful summary of the existing rules and highlights the need for employers to develop policies, procedures, and practices to capture all hours worked, including those that are not scheduled or requested.

The basic rule is well known. Employers are required to pay employees for all hours worked. If an employer knows or has reason to believe that compensable work is being performed, the time must be counted as hours worked. This is required even if the employer did not ask for the work to be performed, even if the employer did not want the work performed, and even if the employer has a policy prohibiting unauthorized work or overtime. Why? As noted by the FAB, “[t]he employer bears the burden of preventing work when it is not desired, and '[t]he mere promulgation of a rule against such work is not enough. Management has the power to enforce the rule and must make every effort to do so.'” This rule applies regardless of whether the employee works remotely or not.

An employer is not, however, required to pay for work that “it did not know about, and had no reason to know about.” The key consideration is whether, through reasonable diligence, the employer should have had actual or constructive knowledge that compensable work was being performed. “For telework and remote work employees, the employer has actual knowledge of the employees’ regularly scheduled hours; it also may have actual knowledge of hours worked through employee reports or other notifications.” Given the challenges presented by remote work arrangements, the FAB noted that “one way an employer may exercise such reasonable diligence is by providing a reasonable reporting procedure for non-scheduled time.” If an employee fails to report unscheduled hours through such a procedure, the employer generally is not required to “undergo impracticable efforts to investigate further to uncover unreported hours of work and provide compensation for those hours.”

The FAB cautioned, however, that “consultation of records outside the employer’s timekeeping procedure” may be relevant and, in some cases, could constitute constructive knowledge of compensable hours. For example, work related emails sent outside of regularly scheduled or reported hours could form the basis of constructive knowledge of hours worked.

The key takeaway for employers is not to stick their heads in the sand and hope for the best. Instead, employers must exercise reasonable diligence by establishing clear expectations regarding an employee’s remote work schedule, including whether a flex schedule is being adopted. They must also develop written timekeeping policies and procedures that address how employees should accurately record hours worked, including how to report unscheduled hours. Other best practices include:

  • Utilizing employee timesheet acknowledgments that require employees to certify that they have completely and accurately reported all hours worked, and that all meal and rest periods were timely provided without interruption. State meal and rest period requirements apply to remote work as well.
     
  • Training employees and managers on how to avoid unscheduled hours. For example, managers should avoid communicating with non-exempt employees outside of regularly scheduled hours. If that is not feasible, then a process should be implemented so that employees know whether they are permitted to read and respond to emails or other requests (e.g., only if an email is marked urgent).
     
  • Training managers on how to identify and report unscheduled work. If an employee is producing work that is unattainable during regularly scheduled hours or emailing on weekends, do not ignore what may later be deemed constructive knowledge of hours worked.
     
  • Promptly investigating “off-the-clock” or unauthorized work, taking corrective action where warranted, and coaching or disciplining employees who fail and/or refuse to follow established policies and procedures. Although unauthorized time must be paid, an employer is not prohibited from correcting behavior and ensuring compliance with its timekeeping policies.
     
  • Reviewing and complying with minimum wage and state expense reimbursement requirements for equipment or supplies used in connection with remote work.
     
  • Updating employee handbooks and establishing remote work policies that not only define the wage & hour compliance requirements, but also address performance expectations, adherence to company standards of conduct, health and safety requirements, electronic monitoring and data privacy issues, and the protection of confidential company information.

If you have any questions on wage & hour compliance for remote employees, and tracking employee work time, please contact the authors of this alert or visit our Labor & Employment Practice page to find an attorney in your area.

Author:

Diane L. Waters,Partner

Editor:

Thalia S. Rofos, Associate

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