The Department of Labor’s Wage and Hour Division recently released a Field Assistance Bulletin (FAB) addressing employers’ obligations to calculate and pay their employees working remotely. This FAB speaks directly to employers and, while not offering much new information, helps apply longstanding Fair Labor Standards Act provisions to an evolving work environment.
The FAB has one overriding message: An employer must pay for all hours worked that it knows or has reason to believe were performed. For statutory support, the Wage and Hour Division points toward 29 U.S.C. § 203(g), which defines “employ” as “to suffer or permit to work.” Regulations and case law further refine the phrase “to suffer or permit” as contemplating any work performed with an employer’s knowledge, be that actual or constructive knowledge.
In practice, what this means for employers is that any time the employer knows or should know that its employee performed work, the employer must pay for that time. This time includes work performed remotely. Of course, this has long been the law, but the new aspects of expanded remote working conditions merit this emphasis and guidance.
In the remote environment, it may not be as straightforward and relatively easy for an employer to know when its employees are working and, consequently, how much time is compensable. The Wage and Hour Division’s FAB acknowledges this concern but reminds the employer it has the burden to “exercise its control and see that the work is not performed if it does not want it to be performed.” 29 C.F.R. § 785.13.
Employers wishing to protect themselves from unauthorized or undesired work would be well served to establish scheduling and reporting procedures for remote workers. The FAB notes that “by establishing a reasonable process for an employee to report uncompensated work time,” an employer satisfies the reasonable diligence requirement for acquiring knowledge of a remote employee’s hours worked. And, while an employer must still pay for all reported work—even unauthorized reported work—“if an employee fails to report unscheduled hours worked . . . the employer is generally not required to investigate further to uncover unreported hours.” In this way, an employer can work collaboratively with its employees to accurately capture and compensate for all worked time.