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DOL issues guidance on tracking and paying for telework

Executive Compensation|Future of Work|Health and Benefits|Total Rewards
COVID 19 Coronavirus

By Stephen Douglas , Rich Gisonny , Laura Rickey and Lindsay Wiggins | October 9, 2020

Compensable time for remote work includes any time during which the employer knows or should have reasonably known work is being performed.

The U.S. Department of Labor’s Wage and Hour Division (WHD) recently issued Field Assistance Bulletin (FAB) 2020-5 clarifying an employer’s obligation to track the number of compensable hours worked by nonexempt employees who are teleworking or otherwise working remotely. According to the FAB, an employer that knows or has reason to believe that work is being performed must pay an individual for any such hours worked. While the guidance is a direct response to the significant increase in remote working arrangements since the start of the COVID-19 pandemic, it also applies to all telework or remote work arrangements. The guidance is effective immediately.

Background and discussion

The Fair Labor Standards Act (FLSA) generally requires employers to compensate their nonexempt employees for all hours worked, including overtime hours. This principle applies equally to work performed away from the employer’s worksite or premises, such as telework. Employers are further required to ensure that work is not performed that they do not wish to be performed.

FAB 2020-5 reaffirms that an employer must pay its employees for all hours worked, including work not requested but allowed, and work performed remotely. If the employer knows or has reason to believe that work is being performed, the time must be counted as hours worked. Even if an employer does not have actual knowledge of unscheduled hours, an employer may have constructive knowledge, and thus must pay the employee for those hours.

According to the FAB (and earlier court decisions), employers must use reasonable diligence in tracking nonexempt telecommuters' work hours. One such way is by providing a reasonable reporting procedure for non-scheduled time and then compensating employees for all reported work hours, even hours not requested by the employer; however, failure to compensate an employee for unreported hours that the employer did not know about, nor had reason to believe were being performed, does not violate the FLSA.

When an employee fails to report hours worked through an employer’s reporting procedure, employers are generally not required to investigate further to uncover unreported hours. In other words, employers generally do not have to sift through information-technology records to investigate whether employees are actually working.

If, however, an employer is aware that an employee is performing work that is allowed but has not been requested, then the employee must be paid for those hours. For example, if an employee is using company-provided email after hours, the employer should confirm that the employee is submitting time sheets for the additional hours worked. This is an instance where consulting records outside the employer's timekeeping procedure would be relevant; such records would constitute constructive (as opposed to actual) knowledge of hours worked.

Going forward

Employers should review their remote working arrangements to ensure they have reasonable procedures in place to track and compensate employees for hours worked, including time the employer actually knew was being worked along with hours that the employer should have known about by exercising reasonable diligence. Employers may wish to consult with legal counsel and other professional advisors to help determine what constitutes reasonable diligence in specific circumstances.

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