SUMMARY

On August 24, 2020, the U.S. Department of Labor (DOL) issued a new Field Assistance Bulletin, reminding employers that they must use reasonable diligence to track and pay for all hours worked while employees are working remotely. Although employers have always been required to pay non-exempt employees for all compensable time, tracking hours worked has become more difficult in light of the dramatic increase in remote work due to the COVID-19 pandemic.

THE UPSHOT

• In response to the COVID-19 pandemic, the DOL clarified an employer’s obligation to track and pay for all compensable time worked by non-exempt employees working remotely.
• This Bulletin does not create new guidance; it simply reaffirms the DOL’s long-standing position, which applies to remote or telework arrangements.
• Employers must have effective time-reporting procedures in place to ensure employees are paid for all hours worked.
• The Bulletin reaffirms that employers who have a system in place for employees to report hours worked that neither prevents nor discourages accurate reporting need not investigate further to uncover unreported hours.

THE BOTTOM LINE

In order to comply with this guidance, employers should ensure they have a time-reporting procedure in place, and prohibit and enforce rules regarding unauthorized, off-the-clock work. Any concerns about unauthorized or uncompensated work should be promptly investigated and corrected.

FULL ALERT

As more employers embrace teleworking arrangements during the COVID-19 pandemic, the DOL issued a reminder to employers about their obligations to pay non-exempt employees for all hours worked, even if the work was not scheduled or requested. If the employer knows or has reason to believe that an employee is performing work, the time must be counted as hours worked, and compensated accordingly. Thus, employers are expected to use reasonable diligence to track employee time.

In order to meet the obligation of “reasonable diligence,” employers should implement time-keeping procedures and require non-exempt employees to accurately report their time. The DOL noted that if “an employee fails to report unscheduled hours worked through such a procedure, the employer is not required to undergo impractical efforts to investigate further to uncover unreported hours of work and provide compensation for those hours.”

In designing a compliant time-keeping procedure, employers can require employees to report all hours worked, regardless of when or where. Or, employers can rely on an exception-based system, whereby employers assume that employees worked all their regularly scheduled hours, and then employees can report any additional time worked. No matter which method is used, for non-exempt employees, employers should promulgate policies that prohibit working outside normal hours without prior approval. The DOL also cautions that employees must not be prevented or discouraged from accurately reporting their time worked.