On August 24, the U.S. Department of Labor’s (DOL) Wage and Hour Division (WHD) published guidance addressing employer obligations to track employee hours while teleworking. Even though the guidance is being issued in part because of the increase in teleworking arrangements during the COVID-19 crisis, the agency emphasized it applies to all telework or remote work arrangements, not just those caused by the pandemic.

Legal standard

Under the Fair Labor Standards Act (FLSA), employers must pay an employee for all “hours worked.” The hours include any time she spent that was “suffered or permitted” by the employer, even if it wasn’t requested or authorized. The law expects employers to “make every effort” to exercise control over the workplace and prevent employees from performing any unwanted work.

In a nutshell, if you know or have reason to believe work is being performed, the time is “hours worked.” You must pay for all hours worked, even if you had a rule against performing the work in the first place.

WHD guidance

The WHD’s guidance underscores and notes “employers must pay for all hours worked that [they] know or [have] reason to believe was performed.” If you’re aware of hours worked, whether through a time system or other means, you’re responsible for paying the employee even if the hours were unauthorized.

Most important, the guidance applies a “reasonable diligence” standard to determine when employers have “reason to believe” work was performed. The standard focuses on what work time you should have known about, not what you could have known. Though you could be liable if you actually know about an employee working uncompensated hours, you aren’t required to sift through any available data (e.g., network access times or phone calls to supervisors) to determine whether employees are recording their time accurately.

You can exercise reasonable diligence by creating a mechanism to learn what hours employees are working. The WHD guidance encourages you to set up a process for employees to report uncompensated work time. You must train employees on the process and can’t discourage or impede the accurate reporting of additional hours worked.

Once you have put in place a process to report uncompensated work time, employees are responsible for reporting uncompensated time through the mechanism provided. If they fail to do so, you generally aren’t required to investigate the matter further.

Next steps for employers

Evaluate your time-reporting mechanisms to ensure employees can report uncompensated work hours, especially time worked at home. Once the mechanism is established, you should train employees to know the appropriate work times and report any uncompensated hours.

Stacey L. Smiricky, Susan W. Kline, and Taylor L. Haran are employment law attorneys with Faegre Drinker. You can reach them at stacey.smiricky@faegredrinker.com, susan.kline@faegredrinker.com, or taylor.haran@faegredrinker.com.