FLSA Telecommuting Issues Can Lead To Abuse: Employers Beware!

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I am getting deluged with inquiries from clients, some very agitated, about what they should do, or can do, vis-à-vis their non-exempt work forces and how these folks can be properly paid, but at the same time remain compliant with the Fair Labor Standards Act. As a basic premise, employees must receive at least the applicable minimum wage (in whatever State the employee works) for all hours worked and then must receive overtime for all hours exceeding forty (40) in a work week. However, employees are not guaranteed that forty hour work week. This is the new normal for businesses throughout this nation.

Employers may cut non-exempt employee scheduled hours due to closings of their businesses or the (severely) reduced demand that this pandemic has caused. However, if an employer directs employees to report to work and then sends them home quickly, the employer will, depending on the State, be on the hook for some hours of reporting pay or show-up pay. Both New Jersey and New York have such statutes.

Many clients have employees working from home, i.e. telecommuting. For exempt workers, this is an “easier” situation, but when non-exempt employees work from home, there are several issues that arise and must be dealt with. Employers must accurately monitor and record the working hours of such employees, as these situations present the great potential for abuse, e.g. padding hours worked at home.

Employers might want to have employees call in when they begin work, take lunch and end their shift or record their time electronically. They might want to have them record their time by hand and then submit that time on a daily basis. Whatever method is chosen, the employer must remind employees of the need to accurately record all working time and ensure that they record when they take lunch and breaks so the working hours are not needlessly inflated.

It is also vital that supervisors not contact non-exempt employees after regular hours or encourage any work to be performed outside the normal shifts of the workers. That will be deemed compensable working time and if that extra work takes them above forty hours in that week, it is then overtime. Even reading/responding to an email (or emails) will be working time and, if more than a minute or two (e.g. de minimis), these minutes will add to the weekly total. ”

The Takeaway

The first step is to adopt or reinforce a policy forbidding working overtime without direction or authorization. The employee-working-at home scenario is dangerous from the perspective that it lends itself to abuse of overtime, without appropriate safeguards. I suggest paying an employee, the first time, for engaging in unauthorized overtime, so as to avoid a complaint to a Department of Labor, but at the same time warning that employee that this is not authorized and future instances of unauthorized overtime may lead to discipline for any violations.

Employers must be proactive…

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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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