Applying Wage and Hour Laws to the 21st Century Series: Telecommuting Risks and Rewards

Telecommuting has become a popular work option for several employers in the recent past. Reasons that employers and employees may consider telecommuting as an option include: increase in flexibility of hours worked, more working families, increase in gas prices, sluggish economy, and alternative to employee layoffs. Telecommuting employees often work from home but may also work from a third location as approved by an employer.

While telecommuting may appear to be a terrific option for employers because of the decrease in overhead and (hopefully) the increase in employee morale, allowing telecommuting is not without risk under the Fair Labor Standards Act (FLSA). FLSA complaints from home-based workers include: working through breaks and meal periods, travel time to attend meetings, after-hours phone calls and e‑mails, and time spent waiting for projects and/or for the computer.

In order to limit the potential liability associated with allowing telecommuting, employers should consider the following:

  1. Identify jobs and employees best suited for possible telecommuting arrangements, because not all jobs are appropriate for telecommuting.
  2. Do not reclassifying a non‑exempt employee to exempt or reclassify the employee as an independent contractor simply because the employee is choosing to work outside the office.
  3. Require strict recordkeeping of hours worked, breaks, and all overtime.
  4. Develop a policy to ensure the security of computer files and other company-related materials.
  5. Require a written agreement or written terms of employment that set specific work hours restrictions and require that overtime be approved in advance.

In short, it is important to remember that non‑exempt telecommuting employees must be paid for all of the same “hours worked” as non-telecommuting employees.

Check back soon for our final post in this series, in which we will address wage and hour concerns involving exempt employees.

Cynthia A. Bremer is the managing shareholder of the Minneapolis office of Ogletree Deakins, and Charles E. McDonald, III is a shareholder in the Greenville office of Ogletree Deakins.