Allowing non-exempt workers to work unsupervised from home has always been a big no-no in the wage-hour world. Allowing this exposes the employer to claims for unpaid hours, and unpaid overtime, from federal, state, and local laws with unforgiving penalties. Recognizing the number of non-exempt employees working from home during the coronavirus pandemic, the federal Department of Labor (DOL) released guidance on tracking telework. The key is having a clear tracking method in place to document time worked and a policy that encourages accurate time reporting.
The DOL reminds employers that employees should be paid for those hours that they were requested to work, as well as those that they worked without being requested to do so. If an employer “knows or has reason to believe” that an employee is performing work, the time must be compensated. An employer has reason to know that an employee is working when they should have acquired knowledge of the work through “reasonable diligence.” Reasonable diligence is what the employer “should have known”–not what it “could have known” if it dug through every record to reveal uncompensated work. For example, the employer is not required to comb through and review electronic device access records for every non-exempt employee to uncover off-the-clock access. However, where an employer is aware of frequent off-hours work that is uncompensated, e.g., frequent emails and text messages about work outside normal work hours, it could result in constructive knowledge of uncompensated time and possible liability.
During the pandemic, employers can exercise this “reasonable diligence” by implementing a reasonable time reporting procedure for scheduled and nonscheduled time worked to ensure that employees are accurately compensated. If an employer has a system in place, and an employee fails to report unscheduled time worked, the employer would have a defense to a claim for unpaid wages. Employers should encourage reporting hours worked and not discourage or impede accurate time reporting. For example, a policy prohibiting and refusing to compensate for unauthorized overtime would be a policy that discourages accurate time reporting. (Even unauthorized overtime should be paid, and the employee can be disciplined for his/her violation of policy.) In addition, a best practice is to include a requirement that the employee verify and confirm that the time sheet is accurate on a weekly or bi-weekly basis.