Teleworking and the Non-Exempt Worker: Four Tips for Minimizing FLSA Issues

 

Teleworking is one of the most popular workflex tools employers can offer. The results of the 2014 National Study of Employers, conducted by Families and Work Institute (FWI) and the Society for Human Resources, reveal that more employers are allowing employees to work some of their regular hours from home both occasionally (67% vs. 50%) and on a regular basis (38% vs. 23%) today than in 2008.[i] This is unsurprising given other FWI research, showing that employees in effective workplaces that offer higher levels of flexibility are more likely to be satisfied and engaged with their jobs, to be in better physical and mental health, and plan to remain with their current employer—all while experiencing less home life interference with work.[ii]

In the past, teleworking has been generally reserved for “exempt” workers, meaning those employees who are not entitled to overtime pay at time and one-half the regular rate of pay for all hours worked over 40 hours in a workweek (as set forth in the Fair Labor Standards Act—the “FLSA”).[iii]  Those employees who are entitled to overtime pay at time and one-half the regular rate of pay for all hours worked over 40 hours in a workweek are referred to as “non-exempt” employees.

One common problem employers face includes when work is performed “off the clock” by non-exempt employees. Thus, determining the amount of “hours worked” for each non-exempt employee and properly recording/tracking that time and paying the employee for time worked are critical. 

Some employers are recognizing the value of more effective workplaces and are offering the opportunity to telework on occasion or on a regular basis to non-exempt workers as well as salaried employees. However, there remain employers who believe that, as a general matter, teleworking is not a viable option for their non-exempt workforce. 

While it is true that some positions are simply not conducive to teleworking as a practical matter (for example, where the essential duties of the position can only be performed at the physical work location of the employer, such as a grocery store cashier), other positions may lend themselves well to a “remote” working arrangement, in whole or in part. 

For those employers who may be looking for ways to expand teleworking options for their non-exempt employees who hold positions in which physical presence is not an essential job function, we hope the following tips will be helpful to minimize risks under the FLSA:

(1) Worried About Potential Misuse? Re-Evaluate Your Approach to Performance Management in General

When an employer asks me how to implement various workflex tools, it is not uncommon to get initial pushback when I suggest that the organization consider offering a teleworking option for certain non-exempt positions.  Usually the first question I receive is, “How will I know whether these employees are really working?  What if they are actually sitting home playing checkers with their kids?”  My standard response is, “How do you know whether they are working while they are at the office?  “How do you know that they are not just posting pictures of their puppies on Facebook all day long?” How are you measuring time worked while they are at the physical workplace?”

It is rare in most industries for managers to literally stand next to their subordinates to ensure that the subordinates are working each minute of the work day.  In fact, some non-exempt workers report to work, clock in, perform their work, clock out, and return home with little to no interaction with peers or supervisors. 

Instead of automatically having the “we cannot allow teleworking because we will lose the ability to monitor our non-exempt employees” mentality, I suggest taking a look at what the particular job entails and how performance is measured/evaluated while physically present, and then determine whether physical presence (all or at least part of the time) is necessary for measuring/evaluatingjob performance.  If physical presence is not essential for measuring/evaluating the employee’s performance, the employer should then look at how hours are tracked in the current position to determine if that tracking system can be utilized for remote work. 

(2) Determine Whether Current Time Tracking Systems Can Be Accessed Remotely

Under the FLSA, employers are required to maintain certain records for each non-exempt worker.  These records include, but are not limited to, records of the hours worked each day, the total hours worked each workweek, total overtime earnings for the workweek, and the like.  (For more information regarding what records are required, we recommend reviewing the Wage and Hour Division’s Fact Sheet #21, which can be found here.

Typically, non-exempt workers “clock in” or “clock out” (or “punch in/punch out”) electronically at work using swipe machines and other various time-keeping devices.  (Some employees may still complete time cards by hand.)  However, more and more workers “clock in” or “clock out” by logging in to a particular software program on an employer-provided computer.  If the employer already utilizes such a software program, it should be relatively simple to determine whether the program can be accessed remotely.  If so, the same program can be used by a remote worker.  If not, options for remote time tracking software can be explored. 

Regardless of the location in which the work is performed, the employer must proactively monitor timekeeping to ensure accurate records and obtain the employee’s “signature” (whether in paper form or electronic) on the timesheets as to the accuracy thereof to prevent the employee from subsequently challenging accuracy of those time records.  Remember: where an employer fails to keep adequate records of employees’ wages and hours, courts will look to any records the employees have or will defer to what the employees say about hours worked, and the employer must then rebut the employees’ calculations.

(3) Ensure Agreement on What Constitutes “Hours Worked” and that Policies Provide Clear Guidance to Employees

Part of minimizing wage and hour issues is understanding what constitutes “hours worked” under the Fair Labor Standards Act.  Non-exempt employees’ hours worked are usually calculated based upon the time when the employee begins his or her “principal activity” and the time on that day at which he/she ceases the “principal activity.”  (See the Wage and Hour Division’s Fact Sheet # 22, which can be found here.

There are many other categories of time that may or may not be compensable, depending upon the circumstances (such as travel time, rest/break times, etc.)  Thus, before permitting a non-exempt employee to telework, an employer should understand what hours are typically compensable for the particular employee, ensure that the employee understands expectations associated with tracking, and discuss whether there are any modifications needed to time tracking when working remotely.  (For example, usually rest breaks of 20 minutes or less are paid for as working time and count towards hours worked. 

It is imperative that employers unambiguously communicate to all employees the length of time and frequency permitted for the breaks and ensure that break time is properly tracked while working remotely as well as at the traditional work site.  In addition, employers should be clear to all employees that employees who are taking bona fide unpaid meal breaks (usually 30 minutes or more) must not perform any work during that time.)

(4) Specifically Address Overtime Expectations

Although some employers are worried that their teleworking employees will not be working during the time they are “clocked in” at home, other employers are worried that their teleworking employees will work too much at home (i.e. more than their set schedule) and thus incur overtime.  This concern is not unique to remote workers; almost all employers have an interest in limiting overtime for non-exempt employees because of the significant costs associated with overtime.  To combat against unauthorized overtime, employers should do the following:

(1)   Have a solid overtime policy in place that prohibits working any hours over 40 in a given workweek without advance written authorization from one or more specified individuals (this requirement of advance approval should also apply to situations in which employees are needed to work through their normally scheduled lunch breaks);

(2)   Have a written policy that expressly prohibits working off the clock, under-reporting hours worked, or over-reporting hours worked;

(3)   Have the employees acknowledge the written policy/policies (signed and dated acknowledgment) and conduct training on the policy/policies

(4)   If an employee fails to obtain prior approval for overtime hours reported, the employer must still pay the overtime but should take remedial action with respect to the employee’s failure to comply with the policy.

In sum, teleworking can be a feasible option for certain non-exempt workers.  Instead of automatically rejecting the possibility, a careful consideration of essential job functions, practical feasibility, and legal implications (including FLSA concerns) could lead to a more productive and fruitful employee-employer relationship. 

 

 

[i] Matos, K. & Galinsky, E. (2014). The 2014 National Study of Employers. New York: Families and Work Institute

[ii] Bond, J.T. & Galinsky, E. (2011). Workplace Flexibility and Low-Wage Employees. New York: Families and Work Institute

[iii] The Fair Labor Standards Act is a federal law which addresses various wage and hour issues.  Note that many states have their own wage and hour laws, some of which may also come into play with respect to teleworking workers. 

 

 

The SHRM Blog does not accept solicitation for guest posts.
COMMENTS 0

Add new comment

Please enter the text you see in the image below:
Image CAPTCHA