By Jeff Jones
Special to the UCBJ
It is common knowledge that one impact of the pandemic has been an increase in the number of employees who telework. Further, most expect that the percentage of employees who telecommute will remain far higher than pre-pandemic levels after the crisis ends.
For teleworkers who are non-exempt the circumstances create questions related to how the employer accurately records and pays for hours worked. In August, the Wage and Hour Division of the Department of Labor issued a Field Assistance Bulletin addressing this subject.
Of course, non-exempt employees must be paid for all hours worked. This includes time that the employer requests the employee to work, as well as all time the employer suffered or permitted the employee to work. In other words, even if the employer tells the employee not to work, if the employee performs work, they must be paid.
In the telework setting what does it mean for an employer to “suffer or permit” an employee to work? And how is the employer to know about time that an employee worked when they are not requested to do so?
With regard to suffer or permit to work, the Bulletin notes that employers are charged with both actual knowledge of time worked as well as constructive knowledge. What does constructive knowledge mean? It means that even if the employer did not know of the time worked, it should have known through reasonable diligence, for example:
- An employee participates in conference calls outside of their usual hours and reports only the regularly scheduled hours, or
- An employee submits reports that show they are working on projects that involve time outside of their usual schedule but are reporting only their regularly scheduled hours worked.
How should employers obtain accurate records of time worked and avoid the “should have known” issues? The Bulletin recommends, and we agree, that an employer should establish a reasonable reporting procedure for both regularly scheduled time and time worked outside of that schedule. In addition, the employer must publicize that procedure and train employees in how to use it. By using this process the employer should accurately capture all time worked. The Bulletin notes that where an employer has established such a procedure and the employee fails to report unscheduled hours, worked the employer “is not required to undergo impractical efforts” to determine whether an employee has worked unreported hours.
A word of caution is in order. Establishing an appropriate reporting process will not constitute reasonable due diligence where the employer expressly or tacitly discourages employees from accurately reporting time worked.
Suppose an employer has the system in place but some employees simply do not report time worked outside their normal schedule? Employers are not required to go to extraordinary efforts to determine a discrepancy. For example, the Bulletin notes that an employer need not comb through cell phone or other such records of activity each week to determine whether an employee worked outside their usual schedule.
What if employees are working when not asked to do so or even against instruction? The Bulletin notes that the Fair Labor Standards Act and its regulations expect employers to exercise their control to see that work is not performed when the employer does not want work to be performed. This can be done via giving express instruction, and by imposing corrective action if the instructions are not followed. But the corrective action may not include failure to pay for the time that the employee worked.
In summary, a wise employer can obtain an accurate record of hours worked by establishing a proper reporting procedure, training employees on its use, and following it honestly. Such an ounce of prevention can prevent thousands of dollars of “cure.”