On August 24, 2020, the Wage and Hour Division of the United States Department of Labor (DOL) published a Field Assistance Bulletin (“FAB”) providing guidance on employers’ obligations under the Fair Labor Standards Act (“FLSA”) to track the hours of compensable work performed by employees who are working remotely. The DOL notes that while this guidance responds directly to needs created by new telework or remote work arrangements that arose in response to the COVID-19 pandemic, it also applies to other telework or remote work arrangements.

Under the FLSA, an employer is required to pay its employees for all hours worked, including work not requested but suffered or permitted, including work performed at home. See 29 C.F.R. § 785.11-12. If the employer knows or has reason to believe that work is being performed, the time must be counted as hours worked. An employer may have actual or constructive knowledge of additional unscheduled hours worked by their employees. For telework and remote work employees, the employer has actual knowledge of the employees’ regularly scheduled hours; it may also have actual knowledge of hours worked through employee reports or other notifications. An employer may have constructive knowledge of additional unscheduled hours worked by their employees if the employer should have acquired knowledge of such hours through reasonable diligence.

The guidance points out that the reasonable diligence standard asks what the employer should have known, not what it could have known. The DOL suggests that one way an employer generally may satisfy its obligation to exercise reasonable diligence to acquire knowledge regarding employees’ unscheduled hours of work is by establishing a reasonable process for an employee to report uncompensated work time. Employers must train employees on the process and cannot discourage or impede accurate reporting of additional hours worked.

If the process is implemented and an employee fails to report unscheduled hours worked through such a procedure, the employer is generally not required to investigate further to uncover unreported hours. The guidance also states that reasonable diligence generally does not require an employer to undertake impractical efforts such as sorting through employees’ non-payroll records and information to determine whether employees are accurately recording time.

In light of this guidance, employers are encouraged to evaluate their time reporting processes and policies to ensure there is a way for employees to report uncompensated work time, especially time worked remotely. Once the process is established, employers should train employees on work times and reporting uncompensated time. Should you have any questions regarding how this guidance applies to your business, please contact ALG.