On August 24, 2020, the Wage and Hour Division of the Department of Labor (DOL) published guidance addressing employer obligations to track employee hours while teleworking. The DOL emphasized that though the guidance is being issued in part due to the increase in teleworking arrangements with COVID-19, it applies to all telework or remote work arrangements, not only those caused by the pandemic.
The Legal Standard
Under the Fair Labor Standards Act (FLSA), employers are required to compensate employees for all “hours worked.” Hours worked includes any time the employee spent that was “suffered or permitted” by the employer, even if it is not requested or authorized by the employer. 29 C.F.R. § 785.11. Employers are expected to “make every effort” to exercise control over the workplace and prevent unwanted work from being performed by employees. 29 C.F.R. § 785.13. If an employer knows or has reason to believe that work is being performed, the time is “hours worked.” 29 C.F.R. § 785.12. Employers must pay for all hours worked, even if they had a rule against performing the work in the first place.
The guidance notes that “employers must pay for all hours worked that [they] know or [have] reason to believe was performed.” If an employer is aware of hours worked, whether through a time system or other means, they are responsible for paying the employee even if the hours were unauthorized.
Importantly, the guidance applies a “reasonable diligence” standard to determine when employers have “reason to believe” work was performed. This standard focuses on what work time employers should have known about, not what they could have known. Though employers could be liable if they actually know of an employee working uncompensated hours, employers are not required to sift through any available data (e.g., network access times or phone calls to supervisors) to determine whether employees are accurately recording time.
Employers can exercise reasonable diligence by creating a mechanism to learn what hours employees are working. The DOL is encouraging employers to set up a process for employees to report uncompensated work time. Employers must train employees on the process and cannot discourage or impede accurate reporting of additional hours worked.
Once a process to report uncompensated work time is in place, employees are responsible for reporting uncompensated time through the mechanism provided. If the employee fails to do so, the employer is generally not required to investigate the matter further.
Employer Next Steps
Employers should evaluate their time reporting mechanisms to ensure there is a way for employees to report uncompensated work time, especially time worked at home. Once the mechanism is established, employers should train employees on appropriate work times and on reporting uncompensated time.