DOL Issues Guidance on Tracking, Compensating Telework

February 2, 2021

The COVID-19 global pandemic has forced some employees to increase their hours spent teleworking and has required other workers to fulfill their job duties from home for the first time in their careers. This “remote workplace” paradigm shift has created new difficulties for employers seeking to comply with the Fair Labor Standards Act (FLSA).

What Are Employer’s Obligations?

Under the FLSA, employers are obligated to track the number of hours of compensable work performed by employees who are teleworking or otherwise working remotely away from any worksite or premises controlled by their employers. Because of the nationwide surge in teleworking arrangements, employers are increasingly facing the question of what their obligations are to track hours actually worked for which an employee wasn’t scheduled.

In response to employers’ growing concerns about their ability to comply with the FLSA, the U.S. Department of Labor (DOL) recently issued a field assistance bulletin to provide guidance on the obligation to track employees’ compensable work.

DOL’s guidance on employers’ obligations to pay hourly, nonexempt employees when they are teleworking largely mirrors your requirements to pay workers who are toiling in a physical workplace. For instance, you must pay employees for all hours worked, including work not requested but suffered or permitted, even when it’s performed at home.

If you know or have reason to believe work is being performed, the time must be counted as hours worked. Importantly, the standard doesn’t require you to pay for employees’ work you could have known occurred—for instance by using technology to track the amount of time an employee was logged into your system—but rather for work they performed that you should have known occurred.

In other words, you’re required to use reasonable diligence to ascertain information related to the actual number of hours an employee worked. For instance, you could provide a reasonable reporting procedure for employees to report all work, including nonscheduled time, and then compensating them for all reported hours of work, even hours you never requested.

If an employee fails to disclose unscheduled hours worked through your reporting procedure, you aren’t required to take unreasonable or impractical steps to uncover the unreported hours or provide compensation for them. You must not prevent or discourage them from accurately reporting the time worked, however, and you must pay for work you have reason to believe is being performed.

What About Work We Didn’t Know About?

If you don’t wish for an employee to engage in unscheduled work, you must exercise control and make sure the activity isn’t performed. Merely establishing a rule prohibiting unscheduled work isn’t sufficient. Rather, the courts have found employers have the power to enforce the rule and must make every effort to do so.

Thus, even if you’re aware an employee is performing work contrary to your rules or despite your attempts to prohibit it, you must pay for all work you knew about, even if you didn’t ask for or want it. You need not pay for work, however, if you didn’t know about it and had no reason to know.

Bottom Line

Your obligations to track hours and pay employees engaged in teleworking arrangements for their time actually worked are largely identical to the requirements related to employees doing their jobs at a physical worksite. If you don’t wish to pay them for the unscheduled work time, you should:

  • Establish rules prohibiting unscheduled work;
  • Make diligent efforts to enforce the rules; and
  • Develop a reporting procedure through which employees are required to report all work hours.

If those efforts fail and you are (or should have been) aware of the number of hours an employee actually worked, you should compensate the individual for the time to ensure compliance with the FLSA.

This article, slightly modified to note recent updates, was featured online in the Wisconsin Employment Law Letter and published by BLR®—Business & Legal Resources. Reproduced here with the permission of BLR®—Business & Legal Resources.

Elizabeth Stephens
Elizabeth Stephens