Since the beginning of the global COVID-19 pandemic, many employers have started telework arrangements with their workers. These arrangements have included allowing workers to work from home to meet government stay-at-home and social distancing orders. On August 24th, 2020, the U.S. Department of Labor’s (DOL’s) Wage and Hour Division (WHD) issued guidance entitled Field Assistance Bulletin 2020-5. This guidance clarifies an employer’s obligation under the Fair Labor Standards Act (FLSA) in tracking the number of hours of compensable work performed by employees who are teleworking or otherwise working in a workspace that is not controlled by their employers. The release comes weeks after the DOL published COVID-19 related guidance relating to the FLSA and the reopening of businesses.
Background
The FLSA generally requires employers to compensate their employees for all hours worked, including overtime hours. As the WHD’s interpretive rules explain, “[w]ork not requested but suffered or permitted is work time” that must be compensated. This principle applies equally to work performed away from the employer’s worksite or premises, such as telework performed at the employee’s home. According to the FLSA, “If the employer knows or has reason to believe that the work is being performed, he must count the time as hours worked.”
While it may be easy to define what an employer actually knows, it may not always be clear when an employer “has reason to believe that work is being performed.” This is especially true when employees telework or otherwise work remotely at locations that the employer does not control or monitor.
Contents of the New Guidance
According to Field Assistance Bulletin 2020-5, the WHD wants to remind employers that they are required to pay employees for all hours worked, including work not requested but allowed and work performed at home. If the employer knows or has reason to believe that an employee is performing work, the time must be counted as hours worked.
For telework and remote work employees, while the employer has actual knowledge of the employees’ regularly scheduled hours; it may also have actual knowledge of hours worked through employee reports or other notifications. The FLSA’s standard for knowledge in the context of overtime is whether an employer has reason to believe work is being performed. This concept of “knowledge” should also be applied to when a worker is performing telework.
“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,” said Wage and Hour Division Administrator Cheryl Stanton. “Today’s guidance is one more tool the Wage and Hour Division is putting forward to ensure that workers are paid all the wages they have earned, and that employers have all the tools they need as they navigate what may, for many, be uncharted waters of managing remote workers.”
While the new guidance responds directly to needs that may have been created by new telework or remote work arrangements in response to the coronavirus pandemic, it should also be applied to other telework or remote work arrangements that may continue after the health crisis has passed.