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Employers across California have responded to the COVID-19 pandemic by transitioning their workforces to work remotely. Consequently, questions have arisen about employers’ obligations under the Fair Labor Standards Act (FLSA) to track unscheduled hours worked by their non-exempt employees.

Last week, the U.S. Department of Labor’s Wage and Hour Division (WHD) responded by  issuing Field Assistance Bulletin (FAB) 2020-5, which provides employers with guidance on tracking compensable working hours for remote employees.

FAB 2020-5 — An Overview

The bulletin affirms that employees must be paid for all hours worked, including work done at home or that which was not specifically requested but still “suffered or permitted.” Employer obligation can be based on:

  • Actual knowledge due to a submitted schedule, weekly reports, or time-stamped communications such as emails; or
  • Constructive knowledge. The FLSA standard indicates that the employer may have constructive knowledge of off-the-clock work if they could have learned about it by exercising reasonable diligence.

If the employer knows or has reason to believe that the employee is working, even if it is off the clock, the time must be treated as hours worked. The challenge is that it is not always clear when an employer has “reason to believe that work is being performed,” especially when employees work at home or other locations outside of the employer’s control or oversight.

Appropriate Strategies for California Employers

The DOL confirmed that the onus is on employers to make sure that work is only being done at times and under circumstances that it approves. Merely issuing a rule against unapproved work is not sufficient—the employer must take steps to enforce it.

One way to exercise such diligence is to have a reporting procedure in place for unscheduled time. For example, the employer could issue a form to non-exempt employees and state that no work is to be done outside of scheduled working hours but if it does happen, they must use that form to report it. Other appropriate measures that may help control employee hours include:

  • Timesheets that require employees to certify that they have completely and accurately reported all hours worked and that all rest and meal breaks were provided without interruption.
  • Training managers and non-exempt employees on how to prevent unscheduled work. For example, managers should refrain from communicating with non-exempt employees outside of office hours and report any instances of unauthorized work that come to their attention.
  • Establishing remote work policies that define the hour compliance requirements and updating the employee handbook to include that information.

It is important to note that an employer cannot refuse to compensate an employee simply because the unscheduled hours were not authorized in advance. They can, however, provide appropriate discipline when an employee works outside of approved hours and prohibit the practice moving forward.

Conclusion

The DOL bulletin is a direct response to questions that arose after the COVID-19 pandemic made remote work a necessity for many industries, but it also applies to all such work arrangements moving forward. Employers should design their telecommuting policy with the help of an experienced employment attorney to ensure that it is legally sound and can protect the company in the event of a dispute.