DOL Issues Guidance on Tracking Hours Worked by Remote Employees
This week, the federal Department of Labor (DOL) issued a field assistance bulletin explaining employers’ obligations when it comes to tracking compensable hours worked by non-exempt employees who are teleworking during the pandemic. The guidance provides helpful reminders for employers on this subject.
As a starting point, the guidance explains the standard for what constitutes compensable hours worked under the Fair Labor Standards Act (FLSA). Under the FLSA, an employer must pay for all time that an employee is “suffered or permitted to work.” This means that an employer must pay an employee for all hours the employee is scheduled and/or directed to work, but it also means that an employer must pay for time that an employee is permitted to perform unscheduled work. If an employee performs work outside of the employee’s scheduled hours, it still must be compensated. An employer cannot refuse compensation just because the work was not authorized in advance. (However, an employer can discipline an employee for performing work outside of scheduled working hours and prohibit it going forward.) Simply put, if the employer knows that work is being performed, the time must be compensated.
In a telework/remote work scenario, it is of course more challenging for employers to truly know when work is or is not being performed by remote employees. Actual knowledge may be derived from employees reporting that they worked extra hours, or it may be obtained through other means, such as a supervisor directing or receiving work outside of an employee’s scheduled work hours. If the employer has actual knowledge that work is being performed, it must be compensated (including any applicable overtime compensation).
The DOL’s guidance also reminds employers that under the FLSA, employers must pay for all time they know or should know is being worked. This “should know” standard is very important for employers to understand. The DOL guidance explains that this means that employers have to use “reasonable diligence” to determine all hours being worked by their employees. For example, an employer could provide non-exempt employees with a form explaining that no work is to be performed off-the-clock and that if they perform any work outside of their scheduled working hours (e.g., responding to emails, texts, or calls), they must report it using that form. If the employee fails to report the time worked, the employer generally does not have an obligation to investigate further to determine whether any work is being performed off-the-clock. The DOL explains that the reasonable diligence standard is based on what an employer “should” know, not on what an employer “could” know. “Though an employer may have access to non-payroll records of employees’ activities, such as records showing employees accessing their work-issued electronic devices outside of reported hours, reasonable diligence generally does not require the employer to undertake impractical efforts such as sorting through this information to determine whether its employees worked hours beyond what they reported.”
The DOL’s guidance, while specific to the federal FLSA, applies equally under California wage and hour law. The bottom line is that employers must implement and communicate reasonable procedures for reporting ALL hours worked by remote employees, and should not discourage accurate and complete reporting or tell employees that work performed outside of scheduled working hours will not be compensated. If employees are working too many hours off the clock, deal with it through discipline, not through denial of pay.