COVID-Driven Explosion of Remote Work Prompts DOL to Issue New Guidance on Employers’ Tracking and Pay Obligations

employee_pay_work_from_homeWhile millions of Americans regularly telecommuted and worked remotely before COVID-19, the pandemic made working from home standard operating procedure for tens of millions more. Consider that in February, the now-ubiquitous remote lifeline Zoom had 10 million users. Today, it has over 300 million. This explosion in remote work, and the potential for wage and hour abuses by employers, recently prompted the Department of Labor to issue new guidance on employer time-tracking and pay obligations under the Fair Labor Standards Act (FLSA).

Issued on August 24, 2020, the Wage and Hour Division’s Field Assistance Bulletin addresses “the question of the employer’s obligation to track hours actually worked for which the employee was not scheduled” when they perform work remotely.

The bulletin begins by reminding employers that under the FLSA, they must pay “employees for all hours worked, including work not requested but suffered or permitted, including work performed at home.” For any time that the employer “knows or has reason to believe that work is being performed,” the employer must count such time as hours worked.

Constructive Knowledge, “Reasonable Diligence,” and Time-Reporting Procedures

An employer’s knowledge of additional unscheduled hours worked for which they must pay employees can be either actual or constructive. For telework and remote work employees, the employer has actual knowledge of the employees’ regularly scheduled hours; it may also have actual knowledge of hours worked through employee reports or other notifications.

The FLSA’s standard for constructive knowledge in the overtime context is whether an employer has reason to believe an employee is performing work. In determining whether an employer had constructive knowledge of such hours worked, courts consider whether they should know of those hours through “reasonable diligence.”

The DOL notes that “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.” Employers, however, do not have to undergo “impractical efforts” to investigate and compensate unreported hours if an employee fails to report unscheduled hours through such reporting procedures.

But employers should neither prevent nor discourage employees from accurately reporting their remote hours worked. If they do so, the employer’s time reporting process may not constitute “reasonable diligence.”

Best Practices for Employers

There is no difference between on-site and remote work when it comes to employers’ duties to track and pay for all hours worked by overtime-eligible employees. Employers may be challenged, however, by the logistics of doing so when their workforce is scattered and performing work out of sight of those charged with tracking time.

The DOL’s guidance serves as a reminder of the importance of maintaining clear and accurate procedures for reporting, tracking, verifying, and paying for remote hours worked. Employers should ensure that their employee certifications of time records are truthful and complete, and that designated management personnel promptly review those records as soon as possible after submission. Management should quickly address and resolve any issues that arise, including those involving allegedly unauthorized work.

Contact Kreis Enderle With Questions About Remote Work Tracking and Pay Obligations

If you have questions about the new DOL guidance or other issues involving time-tracking and pay obligations for remote work, you can reach out to the employment law attorneys at Kreis Enderle for answers and advice. Please contact Jesse Young at (269) 321-2311 to arrange for a consultation.

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