Common Sense Prevails On Pay For Telework. How Refreshing.

Constangy, Brooks, Smith & Prophete, LLP
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Constangy, Brooks, Smith & Prophete, LLP

According to the Bureau of Labor Statistics, roughly 24 percent of working Americans performed some work at home in 2019. Because of the nightmare that 2020 has become, with its pandemic, hurricanes, forest fires, and social unrest, the number of Americans currently performing remote work is likely to be much higher than it was in 2019. Although managing remote workforces creates multiple challenges for employers, the U.S. Department of Labor just provided a common-sense solution for one of those challenges – how to track and pay for remote hours actually worked by non-exempt employees outside their regularly scheduled hours.

It should come as no surprise to our readers that an employer must pay for all hours that it knows, or has to reason to believe, a non-exempt employee has worked. This obligation includes paying for hours that the employer did not ask or want the employee to work, and regardless of whether the employee violated a rule prohibiting employees from working outside their regularly scheduled hours. For example, if an assembly line worker scheduled to work six hours actually works eight hours, the employee must be paid for the extra hours regardless of any rule prohibiting work outside of scheduled hours, since there can be little doubt that the employer knew or should have known (from its front line supervisors) about the extra hours of work. If the employee was not authorized to work those extra hours, the employer’s recourse is to discipline the employee, not dock the employee’s pay.

But the law does not require an employer to pay for work it did not know about and had no reason to know about. The DOL’s common-sense guidance relates to this “reason to know” requirement when an employee is working remotely.

According to a Field Assistance Bulletin issued on August 24 by the Wage and Hour Division of the DOL, the standard used by most courts for determining whether an employer should have known that its non-exempt employees were working outside of their regularly scheduled hours is “reasonable diligence.” Under this standard, the DOL asks what a reasonably diligent employer should have known, not what it could have known. As explained in the Bulletin, one way an employer may exercise “reasonable diligence” to learn about its employees’ unscheduled hours of work is by establishing a “reasonable process” for the employees to report those unscheduled work hours. If an employer has a reasonable process and the employee fails to use that process to report unscheduled hours worked, then the employer generally is not required to investigate further to uncover unreported hours. In other words, employers generally are not required to sort through or search other records in order to determine whether employees performed work outside of their regular work hours.

This would not be the case, of course, if the employer discouraged or tried to prevent employees from reporting their unscheduled work hours.

A Field Assistance Bulletin is not binding precedent on any court, and this Bulletin recognizes that the circumstances of particular situations may require different outcomes. Nonetheless, it provides common-sense guidance for employers trying to manage and compensate employees working remotely: Employers should develop a policy and process by which non-exempt employees working remotely can report the hours they work beyond their regularly scheduled hours, and employers should not do anything to discourage the reporting of those extra hours.

Employees who fail to use the employer’s procedures prevent the employer from learning of the need to pay for those hours and thwart the employer’s ability to take lawful actions (such as discipline) to prevent employees from working unauthorized hours. Both should be helpful to the employer in defending against a claim for uncompensated time.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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