DOL issues guidance on tracking remote employee hours

On August 24, the Wage and Hour Division of the U.S. Department of Labor (DOL) published a Field Assistance Bulletin clarifying employers’ obligations to track compensable hours worked by employees who are teleworking or otherwise working remotely. The bulletin responds directly to circumstances created by the COVID-19 pandemic, but it specifies that the guidance applies with equal force to other telework and remote work arrangements.

Under the Fair Labor Standards Act (FLSA), an employer is required to pay nonexempt employees for all hours worked, including work not requested but suffered or permitted, and including work performed remotely. The employer must make every effort to prevent unwanted work from being performed, and merely having a rule against unscheduled work is not enough. The rule must be monitored and enforced. However, the FLSA does not require an employer to pay for work about which it does not know.

If the employer knows (actual knowledge) or has reason to believe (constructive knowledge) that work is being performed, the time must be compensated. In assessing whether an employer has knowledge of unscheduled hours worked by an employee, courts consider whether an employer should have acquired that knowledge through reasonable diligence. The DOL bulletin confirms that one way for an employer to exercise that diligence is by providing a reasonable reporting procedure for nonscheduled time and then compensating employees for all reported hours of work. The employer may not prevent or discourage employees from accurately reporting their time using the reporting procedure.

Notably, however, if an employee fails to report unscheduled hours worked through such a procedure, the employer is not required to undertake impractical efforts to investigate further to uncover unreported hours of work. The DOL bulletin specifies that reasonable diligence does not require an employer to sort through or cross-reference nonpayroll records such as phone or email records or reports of employees’ activities on electronic devices in order to ensure that employees are reporting their time correctly.

In short, the new DOL guidance confirms that as long as an employer implements a reasonable time-reporting procedure, and it does not prevent or discourage employees from using that system, the employer may rely on the accuracy of the hours reported and pay remote employees accordingly.

As many employers continue to allow employees to work remotely, it might be a good time to remind all employees to report all hours worked when submitting their timesheets.

Sheila Conroy is a partner at Lake Effect Human Resources and Law LLC in Madison.

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