In guidance issued August 24, 2020, the federal Department of Labor (DOL) reaffirmed that an employer is obligated to pay for all of the time that an employee works, including telework and remote work----"if the employer knows or has reason to believe that work is being performed, the time must be counted as hours worked." USDOL Field Assistance Bulletin No. 2020-5.
According to the DOL’s Wage and Hour Division Administrator, Cheryl Stanton, "Due to the coronavirus pandemic, more Americans are teleworking and working variable schedules than ever before to balance their jobs with a myriad of family obligations, such as remote learning for their children and many others. This has presented unique challenges to employers with regard to how to track work time accurately." DOL News Release 8-24-2020.
Citing applicable regulations under the Fair Labor Standards Act, the DOL explained in the guidance that if an employee works time that is not requested or even desired by an employer and even if that time is worked contrary to a work rule or policy, the employer is nevertheless obligated to pay for such time unless it did not know or have reason to know that the employee was working.
An employer’s obligation to pay for all of the time that an employee works can be based on "actual knowledge" or "constructive knowledge." An employer has actual knowledge of an employee’s regularly scheduled hours and it may also have actual knowledge of time worked through the use of required employee reports. An employer has constructive knowledge of the hours an employee works "if the employer should have acquired knowledge of such hours through reasonable diligence." Field Assistance Bulletin No. 2020-5. The DOL emphasized that the standard to be applied in determining whether an employer has constructive knowledge that an employee has worked unscheduled hours is the "reasonable diligence standard" which "asks what an employer should have known, not what it could have known." Id. (citations omitted, emphasis added). An employer would be exercising reasonable diligence if the employer established a process by which employees could report unscheduled work time, but the employer should be careful not to discourage, either implicitly or explicitly, the use of such a process.
In its guidance, the DOL states that, generally, if an employee fails to use an employer’s process to report unscheduled hours worked, the employer does not have to investigate further, for example, by reviewing the employee’s work-issued electronic devices to uncover time worked outside of scheduled work hours. Mere access to such information would not, in most circumstances, be constructive knowledge; however, the DOL notes that “depending on the circumstances, it could be practical for the employer to consult such records." Id.
Particularly in light of increased telework and remote work arrangements that have arisen in response to the novel coronavirus pandemic, employers and employees should work together to insure that all time worked is properly reported and compensated.
If you have any questions about this alert, please contact the Smith Anderson lawyer with whom you normally work.