Employers Must Exercise Reasonable Diligence in Tracking Remote Work under the FLSA for Non-Exempt Employees

Due to the increasing dependence on remote-work arrangements as a result of the COVID-19 pandemic, the U.S. Department of Labor issued a guidance memorandum to all employers regarding the requirement to compensate workers for remote work under the Fair Labor Standards Act (“FLSA”). As many FLSA non-exempt employees work from home during COVID-19, they may be working unnoticed hours for which their employers are required to pay them.

In general, an employer is required to pay its non-exempt employees for all hours worked, including work performed even if not requested. This includes work performed at home. Regardless of where the work was performed, if the employer knows or has reason to believe that work is being performed, the time must be counted as hours worked, and the employee must be compensated.

An employer may not simply disavow knowledge of the hours worked. An employer’s obligation to compensate employees for hours worked can be based on actual knowledge or “constructive knowledge” of work performed. Constructive knowledge means the employer should have known about the hours worked if, for example, the employer would have acquired knowledge of such hours through reasonable diligence.

One way to show reasonable diligence is by providing employees with a reasonable reporting procedure and then compensating employees for all time worked, even if not requested by the employer. Employees also must be properly instructed on how to use the reporting system, and an employer should not discourage or impede the use of the reporting procedure.

Importantly, if an employee does not use an employer’s reporting procedure, the employer is not required to take investigation efforts to discover unreported hours of work and provide compensation for those hours. For example, an employer is not required to review the records of when an employee logged into their work-issued device to determine whether the employee worked hours beyond what they reported. Further, employers may have disciplinary options for employees who refuse to abide by their reporting procedure or who continue performing work that they have been directed not to do.

During this time of increased reliance on remote-work arrangements, FLSA compliance continues to be an area of concern for many districts. Contact Barbara Erickson or Pam Simaga with your FLSA questions.

Source: U.S. Department of Labor Guidance Memorandum, Employers’ obligation to exercise reasonable diligence in tracking teleworking employees’ hours of work, Aug. 24, 2020

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