An increasing number of employees have been teleworking and working from home due to COVID-19. This trend has presented unique challenges for management– such as how to monitor work and how to effectively track hours in compliance with the Fair Labor Standards Act (“FLSA”).
On August 24, 2020, the U.S. Department of Labor’s Wage and Hour Division (“WHD”) issued a Field Assistance Bulletin that provided guidance on an employer’s obligation to track the number of hours of compensable work performed by employees who are teleworking or working remotely.
Under the FLSA, an employer is required to pay its employees for all hours worked, including work not requested but suffered or permitted. This includes work performed at home and work that the employer knows or had reason to believe is being performed. Generally, an employer must exercise its control and see that work is not performed if it does not want work performed. The employer, however, is not required to pay for work it did not know about and had no reason to believe is being performed.
The standard for determining whether an employer had reason to believe that work is being performed is whether the employer should have discovered it through reasonable diligence. One method to satisfy the reasonable diligence requirement is by providing a reasonable reporting procedure for non-scheduled time and then compensating employees for all reported hours including those hours not requested by the employer. An employer must not implicitly or overtly discourage or impede accurate reporting, and the employer must still compensate employees for all hours worked.
But if an employee fails to report unscheduled hours worked through the reporting procedure, then the employer is not required to investigate further to uncover unreported hours. According to the Department, even if the employer has access to non-payroll records of the employee’s activities, reasonable diligence does not require the employer to review this information to determine whether the employee worked hours beyond those that are reported. An employee’s failure to follow reporting procedures thwarts the employer’s ability to prevent unwanted work, and the employer would have no knowledge or reason to believe that work is being performed.
This guidance appears intended to persuade courts that as long as an employer has provided reasonable options for its employees to report any unscheduled work that they end up performing, the employer is not required to “play detective” and review cell-phone bills, computer log-on records, or the like to determine whether employees are performing unscheduled work without reporting it.
If you would like to have a more in-depth discussion on this guidance and the ramifications for you, please contact us at your convenience.