Time-Reporting Procedures for Remote Employees Can Help Shield Employers, DOL Reaffirms
Author: Michael Cardman, XpertHR Legal Editor
August 24, 2020
With more and more employees working remotely as a result of the coronavirus (COVID-19) pandemic, the US Department of Labor (DOL) has issued new guidance intended to help clarify employers' obligation to track the hours their employees spend working from home.
Among other things, the DOL's new Field Assistance Bulletin reaffirms that an employer may avoid liability under the federal Fair Labor Standards Act (FLSA) by establishing procedures for employees to report unscheduled time and then compensating them for any time they report, regardless of whether or not the employer requested the work.
The FLSA requires that an employer pay its employees for all hours worked, including work that it did not request but "suffered or permitted." This holds true whether the work is performed at a traditional worksite, at home or at any other place.
As the 7th Circuit Court of Appeals held in 2017, "Employers must, as a result, pay for all work they know about, even if they did not ask for the work, even if they did not want the work done, and even if they had a rule against doing the work. If the employer does not want to pay overtime, its management must exercise its control and see that the work is not performed."
Knowledge about employees' work can be either actual or constructive.
When employees work remotely, the DOL said, an employer will have actual knowledge of hours worked through regular work schedules, employee reports or other notifications.
As for constructive knowledge, several appellate courts have held that an employer will have constructive knowledge if it should have acquired knowledge of employees' work through reasonable diligence. This reasonable diligence standard asks what an employer should have known, not what it could have known.
In its new bulletin, the DOL cited the 7th Circuit's holding that, "One way an employer may exercise such diligence is by providing a reasonable reporting procedure for nonscheduled time and then compensating employees for all reported hours of work, even hours not requested by the employer. If 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."
There is, however, an important exception: a time-reporting process will not constitute reasonable diligence if an employer either prevents or discourages employees from accurately reporting the time they have worked.