Employers and employees alike have had much confusion around proper compensation when nonexempt employees work remotely – particularly in today’s time when many employees are teleworking and working crazy schedules due to COVID-19. Truth is, in today’s world of remote working (which is new for many of us), employers are dealing with various issues relating to nonexempt employees working off the clock, working unapproved overtime and/or performing unnecessary work while on the clock.
Fortunately, the U.S. Department of Labor shed some light on these issues. Indeed, it advised last week that employers must pay nonexempt employees for all hours worked remotely if they know about it or have reason to believe that the work was performed. In other words, the USDOL reinforced (and expanded a bit on) the FLSA principles requiring employers to pay its employees for all hours worked, including work not requested by the employer, but suffered or permitted, including work performed at home. Therefore, if the employer knows or has reason to believe that work is being performed, the time must be counted as hours worked.
More than that, however, the guidance applies a “reasonable diligence standard” to help employers determine when they need to pay their nonexempt employees for work they had reason to believe was performed. Luckily for employers, this isn’t about what they could have known, but rather what they should have known about, thereby placing at least some of the burden on employees to report their time worked.
The guidance makes clear, for instance, that employers can exercise reasonable diligence in recording hours worked remotely by setting up a process for employees to report their time. The employer would then be required to pay its employees for all hours reported through this system, and is not permitted to discourage workers from accurately reporting. If the employees choose not to report their hours through the employer’s process, the employer will not typically be required to collect this information elsewhere. In other words, if an employer sets up a specific timekeeping system for remote work, and an employee does not report his/her/their time using said system, the employer is not required to track this data – even if it has access to other records that would show how long the employee was working (i.e., how long the employees spent on a work-issued electronic devices outside of reported hours).
Notably, this guidance applies to any remote working situation, and not just those relating to COVID-19.
Based on this new guidance, employers should consider rolling out remote timekeeping policies and practices that they communicate to their employees. This could help employers tremendously down the line. Of course, this goes hand in hand with setting clear policies that strictly prohibit off-the-clock work and ensuring accurate timekeeping of nonexempt employees. Indeed, nonexempt employees should be instructed that all time spent working, including time spent before or after the official working day ends (i.e., work performed at home, or via electronic device or smartphone) should be properly recorded. Policies should also clearly state that refusing to report time accurately, or otherwise altering, falsifying or tampering with time records is prohibited and subjects employees to discipline, up to and including discharge. This does not – and should not – change with remote working arrangements.
If you need any assistance with the creation or review of such policies and/or practices, BakerHostetler is here to help.