On August 24, 2020, the US Department of Labor (“DOL”) issued Field Assistance Bulletin No. 2020-5 (“FAB 2020-5” or the “Bulletin”) to guide an increasing number of employers on the challenge of compensable hours track those performed by non-exempt teleworkers. In particular, FAB 2020-5 provides clarity on how and to what extent employers need to monitor the number of hours worked by non-exempt employees who work remotely. With many employees appearing to be willing to continue partially or fully teleworking for the rest of the year, FAB 2020-5 provides useful insights to help employers properly monitor remote hours and avoid liability for unpaid wages.

FLSA compensation requirements for unscheduled work

The bulletin reiterates the requirement of the Fair Labor Standards Act ("FLSA") that employers must compensate workers for all hours worked, including work that is "not requested but suffered or permitted", whether or not the work is on site the employer or elsewhere. If an employer “knows or has reason to believe that the work is being done, he must count the time as hours worked.” The FLSA requires the employer to exercise control to ensure that no work is being done he doesn't want to run. FAB 2020-5 maintains this commitment and adds that “(e) employers must do this. . .pay for all the jobs they know, even if they didn't ask about the job, even if they didn't want the job done, and even if they had a rule against doing the job. "

The bulletin also affirms the longstanding rule that an employer cannot avoid paying obligations for unapproved work simply by issuing a rule prohibiting them. Instead, it must "make every effort to enforce this rule". As FAB 2020-5 also notes, an employer's obligation to prevent unscheduled work is not “limitless” and an employer may not be required to compensate unreleased workers for hours worked for which they have no actual or constructive knowledge of and so had no way to prevent. Under the FLSA, an employer can have “constructive” knowledge of unscheduled hours when the employer “should have acquired knowledge of such hours through reasonable care”.

Guidelines for FAB 2020-5

FAB 2020-5 suggests that one way employers could exercise such "reasonable care" for teleworkers is to put in place an "appropriate process" for employees to report uncompensated hours without implicitly or openly of an accurate one Discourage employee reporting. It is important that the bulletin states that employers are not required to conduct further investigations to “detect” unreported hours when employees do not use this process to report unscheduled hours. For example, employers with a method of reporting unpaid work do not need to search teleworker logins or email timestamps to identify unplanned and unreported hours. As FAB 2020-5 notes, an employee's failure to follow appropriate procedures for reporting unscheduled time “thwarts” an employer's ability to prevent unwanted work, and the employer's failure to compensate the employee for that time not against the FLSA.

Using the guidelines in the bulletin, employers should ensure that the following important aspects are taken into account when managing an unreleased remote workforce:

  • Remember, employers have an obligation to track and pay for the hours these workers work, regardless of where they occur.
  • Employers should investigate and resolve cases of unauthorized work. However, employers must follow FAB 2020-5 guidelines and compensate workers for all hours worked (including unwanted hours) that they do or that they should know about. Non-exempt employees who repeatedly work without permission may be disciplined, but are generally not unpaid.
  • While remote workers present unique challenges, employers are well advised to protect themselves by implementing processes to ensure quick and accurate reporting of all hours worked, including unscheduled hours, for all employees.

As you know, things change quickly and there are no clear authorities or clear rules. This is not a straightforward statement of the law, but our best take on where things are now. This article does not address the potential impact of the numerous other local, state, and federal ordinances issued in response to the COVID-19 pandemic, including, without limitation, the potential liability in the event that an employee falls ill, related requirements on family vacation, sick pay and other problems.

Sheppard Mullin is committed to providing employers with updated information about COVID-19 and its impact on the workplace. Find out about the legal implications of Sheppard Mullin's Coronavirus Insights portal, which now brings together the company's various COVID-19 blog posts.

By getthru

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