The COVID-19 pandemic has resulted in a tremendous rise in the number of employees working remotely. Also, many employees are spending parts of their “normal workday” on non-work matters, such as tending to childcare responsibilities and, as the school year starts, supporting remote schooling and/or modified school schedules for their children, which is resulting in employees working irregular, non-scheduled hours. With so many employees not physically reporting to work, and many also working hours outside their pre-pandemic schedules, employers face increased challenges tracking the hours nonexempt employees work and ensuring those employees are paid properly.
response to these challenges, the U.S. Department of Labor (DOL) recently issued Field Assistance Bulletin (FAB) No. 2020-5, providing guidance on employers’ obligation to track the number of hours of compensable work performed by employees “who are teleworking or otherwise working remotely.” The FAB reaffirms the following employer obligations under the Fair Labor Standards Act (FLSA) and the DOL’s interpretive rules:
- Employers must compensate their employers for all hours worked and work not requested but “suffered or permitted” is work time that must compensated.
- Employers are required to “exercise [their] control” to ensure that work is not performed if employers do not want it to be performed.
- Employers “bear the burden of preventing work when it is not desired.” The mere promulgation of a rule against performing unscheduled work is not sufficient; employers have “the power to enforce the rule and must make every effort to do so,” including through disciplinary action.
- An employer’s obligation to compensate employees for hours worked applies when the employer has “actual notice” or “constructive notice” that the work was performed.
- An employer has constructive notice if the employer “has reason to be believe work is being performed,” which can occur “if the employer should have acquired knowledge of such hours through reasonable diligence.”
- However, an employer’s obligation to “make every effort” to prevent unwanted work being performed “is not boundless,” as “[t]he reasonable diligence standard asks what the employer should have known, not what ‘it could have known.’”
Importantly, the DOL states in the FAB that an employer generally may satisfy it obligation to exercise reasonable diligence to acquire knowledge regarding employees’ unscheduled hours of work by establishing a reasonable procedure for an employee to report unscheduled work time. If an employee then “fails to report unscheduled hours worked through such a procedure [and the employer is not otherwise notified of hours worked], the employer is generally not required to investigate further to uncover unreported hours.”
According to the DOL, when an employee “fails to follow reasonable reporting procedures [he or] she prevents the employer from knowing its obligation to compensate the employee.” Of course, “the employer cannot implicitly or overtly discourage or impede accurate reporting [of hours worked], and the employer must compensate employees for all reported hours of work.”
Although for the most part the FAB reaffirms existing law and the DOL’s interpretive rules, it nevertheless provides timely guidance to employers, including those who are now facing new or expanded challenges in managing employees working remotely. The key takeaways for employers are:
- Employers are required to pay employees for all hours worked when employers either know or should have known the work was performed.
- If an employer does not want its nonexempt employees to work outside their scheduled work hours (without prior management authorization), the employer should promulgate a rule prohibiting such work and be consistent in enforcing the rule, including through disciplinary action, when appropriate.
- Employers should communicate clearly to nonexempt employees that they are to record and report all hours worked, including non-scheduled hours, and should have a procedure for employees to do so. This policy and procedure can be part of an employer’s broader remote work policy and, again, should be consistently enforced.
- Employers should never withhold pay for hours worked, even when the work time is unauthorized or not properly reported. An employer that fails to pay nonexempt employees for hours the employer knew or should have known were worked faces the prospect of substantial liability, including a multiple of the unpaid wages under the FLSA and state wage laws, plus costs and attorneys’ fees.
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