Are You Accurately Tracking Hours Worked in a Telework World?

By Maureen James - Skoler, Abbott & Presser, P.C.

August 28, 2020

Earlier this week, the U.S. Department of Labor reminded employers of one basic rule that the telework world may have forgotten to follow: Thou Must Track Employee Hours. In the Field Assistance Bulletin 2020-5, the DOL provided “guidance regarding employers’ obligation under the Fair Labor Standards Act (FLSA or Act) to track the number of hours of compensable work performed by employees who are teleworking or otherwise working remotely away from any worksite or premises controlled by their employers.” With so many people working remotely, many employers have had to adapt the way they run their businesses. Along with that process, businesses need to make sure they don’t inadvertently violate any wage laws. This is particularly true in Massachusetts, as employers who do not pay employees for all “hours worked,” are liable for three times lost wages, attorneys’ fees (both theirs and the employee’s), and costs. A relatively small amount owed to an employee can quickly become a-six figure cost to an employer when a group of employees who were not properly paid band together to form a class action lawsuit.

An Accurate Record of All Hours Worked is Critical

Many employees are likely in a situation similar to mine. Just over five months ago, the Governor’s early COVID-related orders closed my children’s schools, and I am anxiously awaiting to hear when they will re-open and to see how the newly-styled hybrid model will work in practical application. Since March, like many, I have been working at home with my entire family, each of us using a device in separate corners of the house. Besides putting a huge strain on our Wi-Fi, it has also presented a host of other issues. The work-life balance struggle is real when you do all of those things in the same space. It is just as easy for me to send an email in my pajamas at 7am as it is to send it at 7pm (hopefully by then I’ve moved into new pajamas). While I am an exempt employee who is paid a set salary for all the work I perform, non-exempt employees must be paid for all hours worked and overtime at one-and-one half the employee’s regular rate for hours over 40 in a workweek. When it comes to non-exempt employees, employers cannot simply issue them a paycheck for 7.5 hours per day—employers are legally obligated to pay for the hours actually worked. And, employers must keep accurate records of the hours the employee actually worked.

Unfortunately, these are basic principles are often overlooked in a time when there is so much logistical chaos. Now is a good time to step back and double check that your organization is following the main rule – the employer must pay for all hours worked, including work not requested but suffered or permitted, including work performed at home at usual or intermittent intervals. That may be tricky when an employee works from 7-10:15, takes a 25-minute break for breakfast, throws in laundry, and picks up the family room, then goes back to work from 10:40 – 1:15 before eating lunch. What if the employee then works until 5, but logs back in at 8:30 to finish up something?

Employers Can’t Turn A Blind Eye to Off-the-Clock Work

Employers have to pay for hours worked that they should have known about. Consider this example: Joe Worker is responsible for providing his supervisor with a month-end report. Joe was distracted during the workday by things going on at home, and, although he worked that day, he did not finish the report. Joe then spends 3 hours after dinner completing the report and sends it to his supervisor. Because of a no unauthorized overtime policy, Joe doesn’t report the evening hours. Should the company have known about those extra hours? Depending on the circumstances, the answer could be yes.

Turning a blind eye will not relieve an employer from liability for failure to pay for all hours worked. The FLSA and state law do not require employers to pay for work that they did not know about and had no reason to know about. But as the DOL recently noted, employers must make it their business to know the hours their non-exempt employees are working. Employers need to have rules regarding the reporting of hours worked and must enforce them. They are not entitled to sit back, point at page ten paragraph three of the employee handbook, and say “I told you to report your hours” to an employee with a wage grievance. Employee certification of the time worked, prompt review and oversight by management, and the immediate review of any suspected issues are key to maintaining that due diligence. Have a policy, communicate it, and enforce it. Don’t forget to include language obligating an employee to review his/her paystub and report any errors in pay.

Don’t Forget About Meal Breaks and Other Wage & Hour Laws

Massachusetts and most other states have their own wage laws that employers must comply with even when an employee is working remotely. For example, Massachusetts requires that employees working more than 6 hours take a half-hour meal break. Are your employees doing that? Are the they recording the time they were at lunch? Don’t forget that workplace wage laws apply when the workplace is the home.