The Department of Labor (DOL) issued guidance August 24, 2020, to remind employers of their obligation to keep accurate records of the time worked by non-exempt employees to ensure that non-exempt employees were paid for all time worked. The DOL did so in light of the tremendous increase in employees teleworking.
The regulations addressing this topic have remained largely unchanged for more than fifty years, but the world in which we work is dramatically different. The three regulations forming the basis of the DOL’s guidance, and a plethora of judicial decisions, read:
Work not requested but suffered or permitted is work time. For example, an employee may voluntarily continue to work at the end of the shift. He may be a pieceworker, he may desire to finish an assigned task or he may wish to correct errors, paste work tickets, prepare time reports or other records. The reason is immaterial. The employer knows or has reason to believe that he is continuing to work and the time is working time.
The rule is also applicable to work performed away from the premises or the job site, or even at home. If the employer knows or has reason to believe that the work is being performed, he must count the time as hours worked.
In all such cases it is the duty of the management to exercise its control and see that the work is not performed if it does not want it to be performed. It cannot sit back and accept the benefits without compensating for them. The mere promulgation of a rule against such work is not enough. Management has the power to enforce the rule and must make every effort to do so.
29 C.F.R. §§ 785.11-785.13. These regulations have been applied to telework situations over the years. But employers should expect an increase in issues given the raw numbers of employees now working away from a traditional work setting. So, employers would be wise to review their policies and practices with regard to nonexempt employees.
Principle No. 1. An employer must keep accurate records of all time worked. Of course, there are many methods by which an employer may track time worked. No law dictates a specific method. For example, you may have your employees use a time card, a punch clock, or a computer log in. You may want to have the employee “sign off” or verify the accuracy of the time submitted each week. This will reduce the chance of disputes later. (We always recommend that each employee record their own time worked.)
Principle No. 2. An employer must pay for all hours worked that it knows about. This seems simple, but it is worth repeating. If you know your employee is working, you are required to pay the employee for that time. Of course, an employer should be able to control costs, including overtime, by scheduling work. Employers should have policies prohibiting unauthorized work. However, if you know your employee is performing work, you are required to pay for that work. Your only recourse is to then discipline that employee for violating the work rule; for example, your posted policy prohibiting unauthorized overtime.
Principle No. 3. If you have “reason to believe” your employee is working, you must pay for that time too. Now things get more complicated. This will be a highly factual question, which means you are likely in a dispute before the DOL or the courts. You will be questioned about what types of efforts you made to determine whether the employee was working. Your timekeeping process will be examined, including whether your employees felt they were encouraged to report all time worked or discouraged from reporting all time worked. While an employer is not required to (and cannot in a telework situation) know everything every employee is doing, if there is “reason to believe” it should have known work was being performed, it must pay for that work. Here are some examples:
- Your nonexempt employee is answering emails during non-scheduled working hours
- Your nonexempt employee submits the presentation to the team on Sunday
- Your nonexempt employee is sending meeting invites to ZOOM calls at 10 p.m.
If you observe these behaviors, you would have “reason to believe” your nonexempt employee was working beyond a Monday-Friday regular business hours schedule. If those working hours did not appear on their time report for that week, you should inquire. (You might inquire immediately to politely remind them they are not to be working except during their assigned scheduled hours.)
Principle No. 4. It is the duty of management to exercise its control and see that the work is not performed if it does not want it to be performed. Let’s be honest. This is easier said than done in many workplaces today. But, it is still written in the DOL’s regulations so we must contend with it. The DOL is quick to point out that employers cannot simply write a policy declaring employees cannot work outside their assigned schedule and then wash their hands of any further responsibility. So what should you do? Be present. When you are in a similar workspace with your employees this is easier of course. But we must adjust. Be present in a virtual way. Be involved with your workforce. Check in. Know what they are doing workwise. Be mindful that, if you see work being done outside the normal working time, you intervene to stop it (or remember to pay for it). There is an upside to this. Not only will this keep you in compliance with the wage and hour laws, it will likely make you a more engaged manager.
Telework is not “out of sight, out of mind” and even the best policy or telework agreement will not protect you from a wage and hour lawsuit. The best protection is being informed about your responsibilities and being engaged with your employees.