The U.S. Department of Labor (DOL) has been busy. The agency recently clarified how the Families First Coronavirus Response Act’s (FFCRA) leave provisions apply to certain school closure scenarios and issued four new opinion letters (FLSA2020-11, FLSA2020-12, FLSA2020-13 and FLSA2020-14), addressing compliance issues related to the Fair Labor Standards Act (FLSA). Additionally, on August 24, 2020, the DOL issued Field Assistance Bulletin (FAB) 2020-5 to clarify an employer’s obligation under the FLSA to track the number of compensable hours worked by teleworking employees who are working remotely away from the worksite or other employer-controlled premises. This guidance is quite timely as the number of teleworking employees has increased this year due to the COVID-19 pandemic. However, the DOL confirmed that the guidance applies to all telework or remote work arrangements, whether the remote work is in response to COVID-19 or for another reason.
The guidance reaffirms that employers must pay their employees for all hours worked, including work not requested but allowed and work performed at home. Ultimately, it’s a question of whether the employer knows or has reason to believe that additional unscheduled work is being performed. If so, that time must be counted as hours worked and the employee must be compensated.
Citing applicable case law, the guidance points out that when courts consider whether an employer had actual or constructive knowledge (i.e., the employer should have known the work was being performed), they use a “reasonable diligence” standard. One way an employer may exercise such diligence is by having a reasonable reporting procedure in place for employees to report their non-scheduled time, and then compensating the employees for such time, even if the time wasn’t employer-requested. If the employee fails to utilize the procedure to report unscheduled hours, the DOL confirms that the employer isn’t required to “undergo impractical efforts to investigate” (such as cross-referencing phone records and supervisor’s knowledge) in order to reveal unreported hours. On the other hand, an employer won’t meet the “reasonable diligence” standard if it has a system or policy in place for employees to report unscheduled hours but has a practice of discouraging such reporting.
This is a good reminder for California employers that, under state law, employees must be compensated for all hours worked. The basic definition of “hours worked” in the Industrial Welfare Commission (IWC) wage orders includes “all time the employee is suffered or permitted to work, whether or not required to do so,” and all “time during which the employee is subject to the control of an employer.”
Employers with nonexempt employees working remotely must be mindful of daily and weekly overtime requirements. Any time above eight hours in a single work day must be compensated at 1.5 times the employee’s regular rate of pay (double time for all hours beyond 12 in a single workday), and 1.5 times the employee’s regular rate of pay for all hours worked beyond 40 straight-time hours in a workweek. Remember, overtime must be paid for, even if not approved.
Having a good timekeeping system in place to track all time worked by employees (whether scheduled or not) is important in order to properly compensate employees. Additionally, if an employer has reason to know — maybe because a supervisor receives an email from an employee during non-working hours — that an employee is working outside of their normal schedule, there should be some follow-up inquiry to ensure that all hours worked are paid for.
Bottom line: Employers must be mindful that they are paying their remote employees for all hours worked, whether the employee was asked or scheduled to conduct the work or not.