Telework Pay Guidelines

Date: August 27, 2020

A summary of the U.S. Department of Labor's recently clarified rules on time reporting requirements

With the explosive rise of teleworking arrangements, DOL recently clarified its longstanding rules on time reporting requirements (originally promulgated in 1961) when applied to the remote workplace. The following is a summary of DOL’s bulletin, posted here.

An Employer must pay for all hours worked that it knows or has reason to believe was performed.

  • The employer has the burden of preventing unwanted work.
    • A rule prohibiting such work by itself is not enough – employers must take reasonable efforts to enforce it.
    • Unrequested work that the employer “suffered or permitted” is compensable.
  • The employer does not have the burden to prevent unwanted work that it neither knows about nor has reason to know about.

For remote work employees, the employer has actual knowledge of the employees’ regularly scheduled hours and may have knowledge through employee reports and other notifications. An employer may have constructive knowledge when the employer has reason to believe that work is being performed – the employer must exercise “reasonable diligence” to learn of any additional unscheduled hours.

  • An employer may satisfy the “reasonable diligence” requirement “by establishing a reasonable process for an employee to report uncompensated work time.”
    • The employer cannot implicitly or overtly discourage accurate reporting.
    • The employer must compensate employees for all reported hours of work.
  • The employer is not required to investigate an employee’s failure to report unscheduled hours.
    • Access to non-payroll records of employees’ activities does not by itself require the employer to investigate whether hours were actually worked.
    • For example, records showing an employee accessed work-issued electronic devices outside of reported hours does not require the employer to investigate.

Example: An employer regularly receives reports and emails from employees outside of regularly scheduled work hours. Not wanting to pay overtime, the employer makes a rule prohibiting work from being done outside of regularly scheduled hours. However, the rule is never enforced, and the employer continues to receive reports and emails from employees outside of regularly scheduled work hours. The employer must compensate employees for the extra work performed.

Example: An employer has implemented an online time reporting system and instructed employees on system usage. The system allows employees to track their hours worked, including unscheduled overtime. The employee accesses their work-issued devices during non-business hours, but the employee never reports this time using the reporting system. The employer is not required to match up an employee’s time reporting (i.e., time sheets) with the employee’s access to work devices to determine whether additional work was performed that wasn’t reported.

This alert was developed by NFIB based on information currently available and our best interpretation of guidance from the U.S. Department of Labor. NFIB, however, cannot provide legal or tax advice and is not responsible for any errors or omissions.

August 27, 2020

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