The Fair Labor Standards Act (FLSA) requires employers to compensate employees for all time spent performing work, regardless of whether the employer has directed, instructed, requested, or required the work. This includes work performed both on the employer’s premises and work performed offsite, such as work performed in a telecommuting or work from home setting. This includes compensating non-exempt employees for all overtime work performed, as defined by law.
So if the employer is not there to see the work being performed, how does the employer know when to pay for hours worked? Courts consider whether employers have actual knowledge (employees’ self-reporting, or time stamps on emails and other network activity visible to the employer) or constructive knowledge (a certain amount of work produced in a certain period of time, for example) of hours worked by the employee. Employers are expected to acquire knowledge of hours worked through reasonable diligence.
Reasonable diligence does not require the employer to go to outrageous lengths to keep track of hours worked by non-exempt employees, such as installing cameras in employees’ homes, and an employer would not be held accountable for failing to pay for unreported hours that could only have been discovered by extreme or impractical measures. The expectation is that employers will exercise control over the performance of work, and create and implement a timekeeping method to account for all hours worked and to use it consistently for all work performed by all non-exempt employees.
Employers have the responsibility to control when the work is being performed, even in a telecommuting setting. This means establishing a concrete policy regarding work hours and overtime, and requiring employees to request authorization from management if they plan to work outside of the agreed upon hours or incur overtime. Remember, once an employee has worked overtime or outside of the agreed upon hours without permission or advance notice, the employer’s remedy is never to withhold pay. Employers should discipline employees who violate the policy to ensure compliance. The law is clear that the burden is on the employer to prevent unauthorized work, and the employer’s policy must be strictly and routinely enforced.
For overtime responsibility, the standard is not whether the employer had actual knowledge that overtime hours were worked, but whether the employer should have known. An employer can satisfy its burden by establishing a standard timekeeping system for remote or telecommuting employees. The system must be easy to use, and the employer must train all employees on how to use it. If an employer is strictly enforcing a policy prohibiting working unauthorized time or overtime, and has implemented and trained all employees on a user-friendly timekeeping system, a court is highly unlikely to find that an employer “should have known” about unauthorized, unreported overtime, and the employer will not be held liable for failing to pay the employee for that time.Compliance with the FLSA with regard to remote or telecommuting employees requires employers to be proactive, not reactive. Before you find yourself caught by surprise with a claim for unpaid hours or overtime that you were unaware was taking place, follow these steps: implement a policy requiring authorization for unscheduled work, work outside of work hours, or overtime; enforce the policy and discipline offenders, and require your employees to use an uncomplicated, reliable timekeeping system of your design, ensuring that they receive adequate training on the system.
The attorneys at myHRcounsel are well-versed in wage and hour law and pitfalls and best practices regarding telecommuting and have the experience and knowledge to advise on all situations involving tracking employee time and complying with state and federal laws regarding employee compensation.