DOL Clarifies Employers' Obligations To Track Hours of Teleworkers


Before this year, the U.S. Bureau of Labor Statistics estimated that roughly 24% of American workers performed some work at home. With the onset of the COVID-19 pandemic, this percentage is significantly higher in 2020.

The Fair Labor Standards Act (“FLSA”) requires that a non-exempt employee be compensated for all hours worked, including overtime hours, even if the work is performed by the employee at home. 29 C.F.R. 785.12 Federal courts have broadly interpreted compensable work at home to include checking e-mail and voice mail, responding to messages, work-related telephone calls, reviewing assignments, and preparing documents.

The FLSA only requires that a non-exempt employee be compensated for all hours of which the employer has actual or constructive knowledge. Constructive knowledge is not limited to known facts – it is intertwined with a duty to inquire with reasonable diligence into what workers are doing. Time sheets prepared by an employee may, but not always, satisfy this duty of reasonable diligence.

So, what is required by this duty of reasonable diligence when an employee is working at home away from the immediate gaze of the employee’s superiors? What duty does an employer have to inquire as to work performed by an employee outside of the work schedule established by the employer?

In Field Assistance Bulletin No. 2020-05, Wage & Hour Administrator Cheryl M. Stanton attempted to provide answers to these questions. Citing the Seventh Circuit opinion in Allen v. City of Chicago, Administrator Stanton stated: “One way an employer generally may satisfy its obligations to exercise reasonable diligence to acquire knowledge regarding employees’ unscheduled hours of work is ‘by establishing a reasonable process for an employee to report uncompensated work time.'”

According to the Bulletin, such a procedure is generally sufficient to satisfy the employer’s obligation as long as (1) employees have been properly instructed on using the reporting system, and (2) the employer does not implicitly or overtly discourage or impede accurate reporting. Administrator Stanton continued: “[I]f an employee fails to report unscheduled hours worked through such a procedure, the employer is generally not required to investigate further to recover unreported hours.”

Employers are cautioned that federal courts do not always follow bulletins from the Wage & Hour Administrator. Since Bulletin No. 2020-05 is based upon recent federal jurisprudence, however, it is a good starting point for navigating the perilous FSLA waters presented by the current pandemic. As always, employers are advised to consult with legal counsel before implementing any reporting procedure for work hours.

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