DOL Issues Guidance for Remote Work and Compliance with the FLSA

On August 24, 2020, the Department of Labor’s Wage and Hour Division released a field assistance bulletin, providing guidance to employers on compliance with the Fair Labor Standards Act (FLSA) for employees working remotely.

The FLSA requires an employer to pay its employees for all hours the employees are “suffered or permitted” to work.  This means that employees are entitled to compensation not just for their scheduled hours, but also for time spent working outside their schedule if the employer either knows or has reason to know that the employee is working that extra time.  If employers do not want employees to work outside of their schedule, they bear the burden to prevent it.

This requirement applies with equal force both to on-premises and remote work.  As of 2019, about 24 percent of American workers performed at least some work from home on an average day, and that percentage has likely increased thanks to the COVID-19 pandemic.  Recognizing the difficulty in tracking an employee’s time spent working remotely, the DOL issued the August 24 guidance letter. 

The main takeaway from this guidance is that employers may be able to insulate themselves from liability by exercising reasonable diligence to keep track of the time remote workers spend doing work.  For example, according to the guidance, employers exercise reasonable diligence when they establish a process by which employees can report extra time spent working. 

Having such a time reporting procedure in place has been a best practice that we have long recommended to employers, even before this guidance was issued. All employers should have a process through which their employees (both teleworkers and in-person workers) can report work performed outside of their scheduled hours.  It need not be anything complicated—a simple process for workers to file timecard edits to report extra time worked would suffice. If an employee fails to report his or her time through the established process, according to the DOL’s guidance, the employer “is not required to undergo impractical efforts to investigate further to uncover unreported hours of work and provide compensation for those hours.”  However, the DOL also warns that the employer cannot prevent or discourage an employee from accurately reporting his or her work time and reminds that employees cannot waive their right to compensation for such time.  

Employers should not, however, assume that having a time reporting process in place is sufficient to avoid liability for all off-the-clock work.  Again, the “suffer or permit” standard requires employers to pay for any work about which, through reasonable diligence, it should have known about.  Therefore, in addition to creating, widely publicizing, and encouraging the use of time reporting procedures, employers should take additional reasonable steps to make sure their employees are not working off the clock.  For example, supervisors should be counseled to look for signs that their employees are performing work outside of their paid time, such as receipt of an email from an employee after-hours. Employers should create a culture in which all employees, including supervisors, know that off-the-clock work is not acceptable and that all work must be reported and compensated.  Additionally, though the DOL notes that employers need not undertake “impractical efforts” to uncover unreported hours, lawsuits often revolve around disputes like where the line between practical and impractical efforts lies.  Thus, employers should consider periodic, realistic audits of company records that could signal off-the-clock work taking place.