On August 24, 2020, the U.S. Department of Labor’s Wage and Hour Division (“WHD”) issued a Field Assistance Bulletin (“FAB”) providing guidance on employers’ obligations under the Fair Labor Standards Act (“FLSA”) to track and pay for the hours of compensable work performed by employees who are working remotely. While timely in light of the COVID-19 pandemic, the guidance is applicable to all situations where non-exempt employees are working away from a worksite or premises controlled by their employer.
It’s long been the law that an employer is required to pay its employees for all hours worked, including work not requested but “suffered or permitted,” including work performed at home or otherwise remotely. See 29 C.F.R. § 785.11-12. If the employer knows or has reason to believe that compensable work is being performed, the time must be counted as hours worked. An employer may have actual or constructive knowledge of additional unscheduled hours worked by employees, and courts consider whether the employer should have acquired knowledge of such hours worked through reasonable diligence. Requiring non-exempt employees to accurately record and report the hours and minutes they work each day—regardless of the location where the work is performed (e.g., in the office, at home, at a customer site, etc.), when the work is performed (e.g., during office hours, after hours, on weekends, etc.), or whether the time worked is part of their regular schedule or in excess of their regular schedule—and paying for all such hours, even if not pre-authorized or requested by the employer, is a “best practice” method for ensuring compliance with the law. Another acceptable method is an “exception time” reporting process, where employees are presumed to have worked (and are paid for) all regularly scheduled hours and a reasonable reporting procedure is in place for employees to report (and be paid for) any additional or non-scheduled working time.
WHD confirms in the FAB that if an employer has a time-reporting procedure in place and “an employee fails to report unscheduled hours worked through such a procedure, the employer is not required to undergo impractical efforts to investigate further to uncover unreported hours of work and provide compensation for those hours.” The FAB notes, however, that an employer’s mere promulgation of a rule prohibiting unauthorized work is not sufficient. To the contrary, employers “ha[ve] the power to enforce the rule and must make every effort to do so.” The obligation is not unlimited, however. As WHD explains, the question is “whether an employer’s inquiry was reasonable in light of the circumstances surrounding the employer’s business, including existing overtime policies and requirements.” WHD notes that for employees who are working remotely, the employer has actual knowledge of their regularly scheduled hours, and it may also have actual knowledge of hours worked through “employee reports or other notifications.”
In almost all respects, an employer’s obligations to track and pay for hours worked by overtime-eligible employees is the same regardless of where the work is performed. While remote work may introduce logistical challenges to time tracking, employers—particularly in the current environment—should ensure that their processes for ensuring prompt and accurate reporting of and payment for hours worked are in place. Employee certification that time records are accurate and complete is a crucial component of a “best practice” timekeeping system, and time records should be reviewed by management as promptly as possible after submission. Any issues, including with respect to allegedly unauthorized work, should be promptly investigated and remediated. The FAB is an informative reminder with respect to these obligations.