On August 24, 2020, the U.S. Department of Labor’s Wage and Hour Division (WHD) issued new guidance on an employer’s obligation to track compensable time. Although the guidance was issued in response to the prevalence of remote working arrangements due to COVID-19, the guidance applies to all remote work arrangements. The new guidance reaffirms an employer’s obligation under the Fair Labor Standards Act (FLSA) to track the number of hours of compensable work performed by employees who are working remotely to ensure those employees are compensated for all hours worked. Compensable time includes (1) work not requested but allowed and (2) work the employer knows or has reason to believe is being performed. The guidance is intended to clarify when an employer has constructive knowledge that work is being performed.
In determining whether an employer has constructive knowledge of additional unscheduled hours worked, the WHD recognizes that courts generally consider whether the employer should have acquired knowledge of such hours worked through reasonable diligence. Employers may exercise reasonable diligence by providing reporting procedures for nonscheduled time. If an employee fails to report unscheduled hours worked through the reporting procedure, the employer is not required to undertake impractical efforts to investigate further to uncover unreported hours of work, such as accessing nonpayroll records or tracking the employee’s access of work-issued electronic devices outside of reported hours. Employers are reminded that they must not prevent or discourage employees from accurately reporting time worked and that employees may not waive their rights to compensation under the FLSA.
To reduce the risk of potential FLSA violations, employers should adopt written time reporting policies requiring nonexempt employees to accurately record all time worked whether the time is worked on the employer’s premises or via remote work arrangements. The policies also should prohibit employees from performing work outside of normal work hours without prior written authorization and should include a ban on after-hours use of employer-provided electronic devices, e.g., computers and smartphones. Consideration also should be given to periodically reminding employees to accurately record time worked consistent with the employer’s policies.