For many employers, the telework experiment necessitated by COVID-19 has been a surprising success. Many are considering whether to continue the work-from-home option for at least a portion of the workforce. One lingering concern, however, is how best to track time for nonexempt workers who are away from the physical workplace.
New DOL Guidance
Under the Fair Labor Standards Act (FLSA), you’re obligated to pay nonexempt employees for all time worked even if you never requested it or specifically prohibited it (such as a no-overtime rule). If the employee doesn’t report the time (e.g., with a timecard) but you have “reason to know” about the work, you must still pay for it.
The U.S. Department of Labor (DOL) recently issued a field assistance bulletin (guidance for its enforcement investigators) setting out its position on teleworking employees’ unreported time. An employer must pay if it has actual or constructive knowledge of the time:
- For telework and remote-work employees, you have actual knowledge of their regularly scheduled hours;
- You have actual knowledge of hours worked through employee reports or other notifications; or
- You have constructive knowledge about additional unscheduled hours worked by your employees if you should have learned about the time through reasonable diligence.
One way you generally may satisfy your obligation to exercise reasonable diligence is by establishing a reasonable process for an employee to report uncompensated work time. For the approach to be reasonable, you can’t discourage or impede accurate reporting, and you must compensate employees for all reported work hours.
Some ‘Peace of Mind’ for Employers
Here is where the DOL offers employers some peace of mind. If an employee fails to report unscheduled work hours through your procedure, you generally aren’t required to investigate further to uncover the time.
You may have access to nonpayroll records of employees’ activities (e.g., reports showing when they accessed their work-issued electronic devices outside of the reported hours), but reasonable diligence generally doesn’t require you to undertake impractical efforts such as sorting through the information to determine whether they worked hours beyond what was reported.
While you can’t turn a blind eye to signs employees are working unreported time, you need not comb through their electronic trash to determine whether they are. To take advantage of the presumption, however, you must have a reasonable process for reporting the unscheduled time.