In response to new telework and remote working arrangements established because of the pandemic, on August 24, 2020 the U.S. Department of Labor (“DOL”) issued a Field Assistance Bulletin (“FAB”) to provide further clarification to employers on teleworker time tracking and compensation challenges.

In Field Assistance Bulletin No. 2020-5, the DOL affirms an employer’s obligation under the Fair Labor Standards Act (FSLA) “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.” Under this guidance and FSLA requirements, the DOL clarifies that:

  • An employer must compensate employees for all hours worked, even if the work was “not requested but suffered or permitted;” and,
  • An employer must count time as hours worked if they know, or have reason to believe, that work is being performed through “reasonable diligence.”

Actual Knowledge and Reasonable Diligence

An employer is obligated to compensate employees for hours worked or teleworked, based on actual or constructive knowledge of that work. In a remote working environment, employers have actual knowledge of the regularly scheduled hours of their workforce. They may also have actual knowledge of hours worked thanks to employee reports or notifications.

The DOL suggests that employers may exercise reasonable diligence by establishing a “reasonable process for an employee to report uncompensated work time,” without discouraging or preventing an employee’s accurate reporting. This is sometimes known as a “safe harbor” policy—which can help avoid wage and hour issues relating to uncompensated work time or overtime pay in both remote and traditional work environments. If an employer implements such a policy and an employee fails to follow it, then the employer likely has a strong defense to FLSA claims for unpaid work time or overtime. Such a policy helps protect employers in situations where the employee alleging unpaid wages does nothing to put the employer on notice of such uncompensated work time or overtime, despite the employer having a policy in place that encourages its employees to promptly provide such notification. By exercising reasonable diligence and a reporting system, an employer also need not make impractical efforts to investigate unreported hours worked (i.e. cross-referencing phone records or the accessing of work-issued electronic devices outside of normal hours). Employers should note that employees must be properly instructed on using a reporting system in order to avoid further liability and remain reasonably diligent.

Final Takeaway

An employer should create reasonable reporting systems and compensate employees for all worked or teleworked hours they know about, regardless of whether the employer requested or wanted the work to be performed, and “even if they had a rule against doing the work.”