Clarity

On Aug. 24, 2020, the DOL’s Wage and Hour Division (WHD) “issued Field Assistance Bulletin (FAB) 2020-5 to clarify an employer’s obligation to track the number of hours of compensable work by employees who are teleworking or otherwise working away from premises controlled by their employers.”

In a telework or remote work environment, employers may often question their obligation to track hours worked for which the employee was not scheduled. The DOL has now provided guidance on the responsibility of an employer to monitor the number of hours of compensable work performed by remote or teleworking employees. This guidance is in direct response to the telework and remote work arrangements created in response to COVID-19. However, it also applies to other telework and remote work arrangements.

Employers must pay employees for all hours worked.  This includes “work not requested but suffered or permitted,” and work performed at home. If you know or have a reason to believe that work is being performed by remote or teleworking employees, you must count the time as hours worked. 

Generally, the Fair Labor Standards Act (FLSA) requires employers to pay their employees for all working hours, including overtime. According to the Act, “employers must, as a result, pay for all work they know about, even if they did not ask for the work, even if they did not want the work done, and even if they had a rule against doing the work.” FLSA also states the following: “however, the FLSA stops short of requiring the employer to pay for work it did not know about and had no reason to know about.”

Consequently, an employer’s obligation to pay employees for hours worked can depend on real knowledge or constructive knowledge of that work. For telework and remote work employees, the employer has actual knowledge of the employees’ regularly scheduled hours; the employer may also have actual knowledge of hours worked through employee reports or other notifications. The standard for constructive knowledge in the overtime context is whether an employer has reason to believe work is being performed. An employer may have constructive knowledge of additional unscheduled hours worked by their employees if the employer should have acquired knowledge of such hours through reasonable diligence. In other words, if it can be ascertained that the employee worked, whether scheduled or not, the employer is responsible for paying for such hours

Importantly, the reasonable diligence standard asks what the employer should have known, not what it could have known. Employers do not need to cross-reference phone or login records to ensure that its employees report their time correctly.

The WHD states the following: “One way an employer may exercise such diligence is by providing a reasonable reporting procedure for nonscheduled time and then compensating employees for all reported hours of work, even hours not requested by the employer.” If an employee does not record unscheduled hours worked under the reporting procedure implemented, the employer is not required to conduct impractical efforts to further examine unreported hours of work and provide compensation for those hours. Employers are not expected to go through records showing employees accessing their work-issued electronic devices outside of reported hours to determine whether its employees worked hours beyond what they reported.

However, employers’ time reporting processes will not satisfy reasonable diligence if they prevent or discourage an employee from accurately reporting time worked, and “an employee may not waive his or her rights to compensation under the Act.” With employees working more flexible hours to accommodate interruptions as a result of the pandemic, it is important to understand this topic, and remain compliant.