News Release

U.S. DEPARTMENT OF LABOR ISSUES GUIDANCE TO CLARIFY EMPLOYERS’ OBLIGATIONS TO TRACK TELEWORKERS’ COMPENSABLE HOURS
WASHINGTON DC
LINK: https://www.dol.gov/newsroom/releases/whd/whd20200824

With telework arrangements expanding in response to the coronavirus pandemic, the U.S. Department of Labor’s Wage and Hour Division (WHD) today issued Field Assistance Bulletin 2020-5 to clarify an employer’s obligation to track the number of hours of compensable work performed by employees who are teleworking or otherwise working away from premises controlled by their employers.

In a telework or remote work arrangement, the question of the employer’s obligation to track hours actually worked for which the employee was not scheduled may often arise. While the guidance issued today responds directly to needs created by new telework or remote work arrangements that arose in response to the coronavirus, it also applies to other telework or remote work arrangements.

“Due to the coronavirus pandemic, more Americans are teleworking and working variable schedules than ever before to balance their jobs with a myriad of family obligations, such as remote learning for their children and many others. This has presented unique challenges to employers with regard to how to track work time accurately,” said Wage and Hour Division Administrator Cheryl Stanton. “Today’s guidance is one more tool the Wage and Hour Division is putting forward to ensure that workers are paid all the wages they have earned and that employers have all the tools they need as they navigate what may, for many, be uncharted waters of managing remote workers.”

Today’s guidance reaffirms that an employer is required to pay its employees for all hours worked, including work not requested but allowed and work performed at home. If the employer knows or has reason to believe that an employee is performing work, the time must be counted as hours worked. Confusion over when an employer “has reason to believe that work is being performed,” may be exacerbated by the increasing frequency of telework and remote work arrangements since the Department last issued interpretive rules in 1961.

Read Field Assistance Bulletin 2020-5.

The Wage and Hour Division provides additional information on common issues employers and employees face when responding to the coronavirus, such as its effects on wages and hours worked under the Fair Labor Standards Act, paid leave under the Family and Medical Leave Act, and paid sick and expanded family and medical leave under the Families First Coronavirus Response Act. Learn more about these issues.

For more information about the laws enforced by the Wage and Hour Division, call 866-4US-WAGE, or visit www.dol.gov/agencies/whd. Download WHD’s timesheet app.

The mission of the Department of Labor is to foster, promote, and develop the welfare of the wage earners, job seekers, and retirees of the United States; improve working conditions; advance opportunities for profitable employment; and assure work-related benefits and rights.

Agency Wage and Hour Division
Date August 24, 2020
Release Number 20-1567-NAT
Contact: Megan Sweeney
Phone Number 202-693-4661
Email sweeney.megan.p@dol.gov

U.S. Department of Labor Issues Guidance on Tracking Compensable Remote Work of Nonexempt Employees Under the Fair Labor Standards Act
August 27, 2020

More than five months into the COVID-19 pandemic that has forced many employers to adopt remote work arrangements, on August 24, 2020, the U.S. Department of Labor (DOL) issued Field Assistance Bulletin (FAB) 2020-5, which clarifies an employer’s obligation to track hours worked by nonexempt employees who are working remotely.

Background
The Fair Labor Standards Act (FLSA) requires employers to pay non-exempt employees for all hours worked. This includes time worked that is not requested by the employer, but which the employer “suffers or permits” to be worked. As the DOL’s bulletin notes, “If the employer knows or has reason to believe that the work is being performed, the time must be counted as hours worked.” In most “in-person” operations, employers have significant control over the hours that nonexempt employees are able to perform work, and can take steps to minimize the risk that nonexempt employees will perform work without the work being recorded and paid. However, the rapid rise of remote work arrangements during the COVID-19 pandemic has presented new FLSA compliance challenges for many employers.

The DOL Bulletin
A common question for employers during the pandemic is the extent to which the FLSA requires them to take steps to ensure that nonexempt employees are paid for all time worked, even when the work is unscheduled and not reported by the employee. In FAB 2020-5, the DOL first reaffirms that an employer is required to pay nonexempt employees for all hours worked, including hours for which the employee was not scheduled, if the employer has actual or constructive knowledge of the additional hours worked. The DOL explains that “[f]or telework and remote work employees, the employer has actual knowledge of the employees’ regularly scheduled hours” and hours worked “through employee reports and other notifications,” and constructive knowledge if the employer “should have acquired knowledge of such hours through reasonable diligence.”

Therefore, employers seeking to minimize the risk of liability for failing to pay nonexempt employees for unscheduled and unreported remote work must exercise reasonable diligence to acquire knowledge of the hours worked. Importantly, the DOL bulletin notes that the obligation to pay for unscheduled and unwanted work is “not boundless.”

The DOL bulletin states that employers generally can satisfy their obligation to exercise reasonable diligence by establishing a “reasonable reporting procedure for non-scheduled time and then compensating employees for all reported hours of work,” even where the employer did not request or direct the work to be performed. When an employer implements such time reporting procedures, the onus is on the employee to follow the procedures and report all of the time worked. Therefore, if an employee does not utilize such a procedure to report unscheduled hours worked, the employer is “generally not required to investigate further to uncover unreported hours” of work and compensate employees for those hours.

Importantly, according to the DOL bulletin, even though an employer may have access to records of employees’ work activities outside of the employer’s payroll or other reporting system, “such as records showing employees accessing their work-issued electronic devices outside of reported hours,” an employer generally is not required “to undertake impractical efforts such as sorting through this information to determine whether its employees worked hours beyond what they reported” in order to meet the reasonable diligence standard. The DOL adds a caveat to this guidance, however, by noting that under certain circumstances it may be “practical for the employer to consult such records.”

However, establishing a reporting procedure will not protect the employer from liability where, for example, an employer “implicitly or overtly… prevents or discourages an employee from accurately reporting the time he or she has worked,” or fails to compensate employees for all hours reported. The DOL also cautions that if the employer “is otherwise notified of work performed through a reasonable method, or if employees are not properly instructed on using a reporting system,” the employer may be liable for unreported hours worked.

The DOL bulletin also touches briefly on employer rules or policies prohibiting unscheduled work. In this regard, the DOL notes that the “employer bears the burden of preventing work when it is not desired.” As such, “mere promulgation of a rule against such work is not enough”?the employer must “make every effort” to enforce such rules and policies.

What This Means for Employers
As remote work becomes the “new normal” for many employees, employers should work with employment counsel to implement?and enforce?policies to address the payment of nonexempt employees for all hours worked remotely and revisit any existing policies. Key elements of any such policies include, but are not limited to: requiring employees to record time worked on a daily basis; providing a procedure for employees to report working unscheduled hours; prohibiting overtime work without prior approval from a manager; requiring employees to certify that they have accurately recorded all time worked and not performed any “off-the-clock” work, including work during any unpaid meal periods; a complaint procedure for nonexempt employees to raise concerns about being compensated for off-the-clock work; and prohibiting managers from encouraging, suggesting or requiring non-exempt employees to work off-the-clock.

Given that remote work, arrangements are new to many managers, employers also should communicate expectations and policies to managers of employees working remotely. Employers should consider training managers on, among other things, limiting their contact with nonexempt employees outside of scheduled working hours, prohibiting off-the-clock work, and requiring advance approval of overtime.

Finally, it is important to note that state and local jurisdictions have varying wage-and-hour requirements that may differ from the FLSA. Employers should confirm that their policies and practices with respect to remote work and payment of nonexempt employees comply with applicable law in the jurisdictions where the employer and employees are located.

U.S. Department of Labor Issues New Guidance on Remote Work
Friday, August 28, 2020

The COVID-19 pandemic has led to a transformation of the workplace and an explosion of remote work, including for employees previously not covered under employers’ telecommuting policies. Despite the reopening of most state economies, many employers are continuing to allow their workforces to work remotely. Remote work by nonexempt employees can pose a challenge with regard to ensuring employees are paid for all time worked, as the traditional workday may be blurred in a remote environment. On August 24, 2020, the U.S. Department of Labor’s (DOL) Wage and Hour Division issued Field Assistance Bulletin (FAB) No. 2020-5 regarding employers’ obligations to use reasonable diligence in tracking remote employees’ hours. The guidance affirms the value of a clear system for reporting time and a requirement that employees promptly and accurately report their time—especially in a remote work environment.

General Obligations Under the FLSA
Under the Fair Labor Standards Act (FLSA), employers are obligated to compensate nonexempt employees for all hours the employees are “suffered or permitted” to work. In other words, even if an employer did not request that an employee perform work, if the employer knows or has reason to believe the employee performed the work, the employer must pay the employee for his or her time performing the work.

The FLSA also requires an employer to “exercise its control and see that the work is not performed if it does not want it to be performed.” Employers bear the burden of preventing work that they do not want performed, and therefore have the authority to promulgate and enforce rules prohibiting employees from working when they are not supposed to be working. Employers may discipline employees for performing unauthorized work—but they must pay for the time.

The FLSA also requires employers to pay employees for hours worked based on either “actual knowledge or constructive knowledge” of the employees’ work hours. Employers generally have actual knowledge of remote employees’ regularly scheduled work and will have obtained actual knowledge of hours worked through other means, such as “employee reports or other notifications.” The DOL’s guidance instructs that “[a]n employer may have constructive knowledge of additional unscheduled hours worked by [its] employees if the employer should have acquired knowledge of such hours through reasonable diligence.”

The FLSA and Remote Work
FAB No. 2020-5 confirms that while it is an employer’s obligation to make every effort to prevent unwanted work, the employer’s duty to do so is not unlimited. The DOL recognizes that in a remote work environment, an employer may have difficulty exercising control when the employer does not have reason to believe work is being performed—and therefore the employer’s obligation is “not boundless.” Accordingly, the guidance states that an employer must “exercise reasonable diligence” to ensure employees are paid for all time worked. The employer may satisfy its obligation under the FLSA by establishing a system that requires nonexempt employees to accurately record and report all time worked each day. Employers may also pay for all scheduled working time and have policies requiring employees to self-report work time that is not otherwise scheduled. Employers “cannot implicitly or overtly discourage or impede accurate reporting” under their policies.

In the event that an employee fails to report unscheduled hours worked through this procedure, the DOL guidance states that an “employer is generally not required to investigate further to uncover unreported hours.” This is true even if the employer “may have access to non-payroll records of employees’ activities, such as records showing employees accessing their work-issued electronic devices outside of reported hours ….”

Likewise, the DOL notes that an employer’s “failure to compensate an employee for unreported hours that the employer did not know about, nor had reason to believe was being performed, does not violate the FLSA.” Citing case law, the DOL also pointed out that an employee who ‘“fails to follow reasonable time reporting procedures … prevents the employer from knowing its obligation to compensate the employee.’”

Practical Takeaways
The COVID-19 pandemic has presented many unique challenges for employers, including issues arising from increased teleworking. The DOL’s guidance provides some practical takeaways for employers to consider as the pandemic continues:

Employer obligations under the FLSA remain intact.

Despite the changing work environment, employers still have the same obligations under the FLSA to compensate employees for all hours worked, including all work performed remotely. The failure to abide by these obligations can result in hefty damages, which can include unpaid wages, liquidated damages, and attorneys’ fees.

“Exercise reasonable diligence.”

As described above, the obligation to compensate employees for all work that employers have reason to believe occurred remains. When an employer has or should have actual knowledge that employees are working outside of their scheduled hours—as evidenced by work produced, communications, or other reports—it is the employer’s duty to compensate the employees for the hours worked.

Work schedule policies may require review.

The DOL guidance points out that “[e]mployers are required to exercise control to ensure that work is not performed that they do not wish to be performed.” In light of this requirement, employers may want to maintain policies making clear that employees should not be working outside of their scheduled work times. Employers may also want to have policies in place for employees to report unscheduled or uncompensated work hours.

Consider whether management is enforcing policies consistently.

Finally, once the above-referenced policies are in place, employers may want to consider whether they are being enforced consistently. In this regard, it may be helfpul to make sure that employees know to work during their scheduled work hours and that the failure to do so without approval will result in corrective action.

© 2020, Ogletree, Deakins, Nash, Smoak & Stewart, P.C., All Rights Reserved.
National Law Review, Volume X, Number 241