DOL Offers Guidance on Compensating Work from Home During the Pandemic
On August 24, 2020, the U.S. Department of Labor released a Field Assistance Bulletin to provide guidance addressing how employers should track the number of hours worked by employees who are working remotely. While the guidance was issued to respond to current conditions caused by the COVID-19 pandemic, the guidance is a summary of existing law and applies to all remote working arrangements, not just those resulting from the pandemic.
Under the federal Fair Labor Standards Act, employers have an obligation to pay employees at least the minimum wage for all hours worked, and to pay overtime of time and a half for all hours worked over 40 in a workweek, unless the employee is properly classified as “exempt.” Employers are liable for all hours that they “suffer or permit” employees to work, which means that even if the work is not requested, it must be paid.
Paying hourly employees for time worked is usually not difficult when employees are in a workplace and can punch a time clock, but timekeeping becomes much more difficult when employees are working remotely and may not have access to a time clock. Employees working remotely may also work irregular schedules, or take breaks during the day, particularly as employers provide more flexibility to allow employees to balance other obligations, such as home schooling, during the pandemic.
The DOL’s guidance clarifies that an employer’s obligation to pay comes from either actual or constructive knowledge of the hours worked by employees, even if unscheduled or outside of normal working hours. Constructive knowledge results when the employer should have acquired knowledge through the exercise of reasonable diligence. The DOL suggests that employers provide a “reasonable reporting procedure” for reporting time worked, including unscheduled time, and then compensate for all hours reported by the employee. The DOL helpfully clarified that an employer will be relieved of responsibility if the employee does not report all hours worked through such a procedure, and is not required to “undergo impractical efforts to investigate” whether the employee has worked additional hours, such as accessing computer log-ins or emails to see when employees are working. However, the DOL emphasized that an employer’s process will not constitute reasonable diligence where the employer prevents or discourages the employee from reporting time.
Employers should take away several practical tips from the DOL’s guidance:
- Ensure that even when employees are working remotely, there is a way for employees to report the hours they work each week, including unscheduled hours or hours outside of regular working time;
- Pay employees for all time reported, whether or not requested or authorized, and address unauthorized work through a disciplinary procedure, not by refusing to pay; and
- Institute a policy that prohibits employees from working “off the clock” or failing to report time worked, and that requires employees to report any request by a manager or supervisor to work off the clock.
These “best practices” should remain in place even when the pandemic ends.
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