Wage and Hour compliance under the Fair Labor Standards Act (FLSA) can sometimes get sticky and is often difficult for small businesses to keep up with. With the added twist of more employees working remotely, that piles on an additional layer of complexity when managing non-exempt (hourly employees that are eligible for overtime) employees time.
On August 24, 2020, the Department of Labor issued Field Assistance Bulletin 2020-5 to provide guidance and clarification around employer and employees obligations under the FLSA in a remote working situation.
In a traditional office setting, it is pretty straightforward that while they are at work and working a regularly scheduled shift or workday, they are paid for the workday less any lunch breaks. In a remote environment, it can be a little more difficult to know when and if employees are working. The DOL’s guidance is pretty clear in that the employer is responsible for paying employees for all time worked that the employer knew about or time that the employer would have reason to believe was worked. This includes regular time, and overtime, that was worked without permission or unscheduled work. The time still has to be paid. None of this is really new, but a great reminder.
The one key piece here is that the if the employee works unscheduled time without the employer having “constructive” knowledge of the unscheduled time worked, the employer may not be obligated to pay the non-exempt employee for that time because the employer had no opportunity to stop or prevent the time from being worked. The constructive knowledge should be “acquired through reasonable diligence” on behalf of the employer. This means it is that much more important for companies to have clear policies around time tracking as well as an easy to use and reliable source for time tracking. The new guidance does not require an employer to research through employee records computer access records or email timestamps to try and piece together the unscheduled or unauthorized time that was worked so that they can pay it. It is the responsibility of the employer to provide a system and process for non-exempt employees to track ALL time worked and it is the responsibility of the employee to follow that policy and record ALL time worked, scheduled or unscheduled.
What does this all mean for your small business? It is important to protect your small business and the employees in this situation. Here are some tips as to how to do that:
Set expectations – Revisit and update or implement a policy that makes sense for your business around time tracking, defining work time, employee schedules and what all that means. If you do not want non-exempt employees working more 40 hours a week, be clear about that. If you don’t mind employees working outside of their “regularly scheduled” hours, be clear about that too and how they record that time.
Time tracking tool - Provide a simple and easy to use time tracking tool to help avoid any confusion or “off the clock” wage and hour claims.
Reinforce – Have regular communication with employees about the expectations and be clear in the messaging. This includes use of the time tracking tool.
Be consistent – Consistency is key in HR and how things are managed. Be consistent in how the policy is enforced and reinforced.
The good news is, as a small business owner, you don’t have to worry about the details of this because we have you covered. We can make sure that your policies and the expectations for both the company and the employee are clear so that everyone is protected and supported.
Let’s talk about what this means for your small business.