On August 24, 2020, the U.S. Department of Labor (“DOL”) clarified an employer’s obligation to track employee’s remote, compensable hours, even if the hours were not scheduled. The DOL’s guidance applies to teleworking broadly, not just new arrangements in the light of COVID-19.
Telework or remote work has become the new normal in many businesses for the foreseeable future. Due to the COVID-19 pandemic, more employers are having their employees work from home. Our firm has provided tips for managing remotely, which can be found here.
The DOL issued guidance on this challenge in the form of a Field Assistance Bulletin, clarifying how employers should track teleworker’s compensable hours and providing specific guidance on tracking hours worked that the employee was not scheduled to work.
Employers must pay for time an employee is scheduled to work as well as unscheduled time the employer knows, or should know, that the employee has worked. Employees can report work performed that was not scheduled to employers, and employers should not discourage employees from reporting additional work performed. Additionally, employees may not waive compensation to those hours.
An employer’s obligation to compensate employees for hours worked can be based on actual or constructive knowledge of that work. For example, an employer can have actual knowledge of hours worked through a schedule or employee reports or a notification system.
When determining constructive knowledge, courts will consider whether the employer should have acquired knowledge of those hours worked through reasonable diligence. Employers can exercise diligence by providing a reasonable reporting procedure for non-scheduled time, even if the hours of work were not requested by the employer. Additionally, an employer must properly instruct employees on using their reporting procedures.
The guidance cites a 7th Circuit decision, which held that “[i]f an employee fails to report unscheduled hours through such a [reasonable reporting] procedure, the employer is generally not required to investigate further to uncover unreported hours.” Note that reasonable diligence does not require the employer to undertake impractical efforts, such as sorting through non-payroll records of employee activities (like records of accessing work devices outside of reported hours), to determine hours worked beyond what was reported.
An employer should not discourage employees from accurately reporting their time. Employers must pay for time an employee is scheduled to work, in addition to unscheduled time that the employer knows or should know that the employee has worked. An employer can set up a reasonable procedure for employees to report their unscheduled time. If an employer elects to do so, the employer must instruct employees on how to use that procedure. Finally, if the employee fails to report their hours through that reporting procedure, an employer is typically not required to investigate further.