Businesses and employees each play a role in ensuring all hours worked away from the office are properly compensated, the U.S. Labor Department said in new guidance encouraging employers to develop a system for workers to report uncompensated time.
The department’s Wage and Hour Division advised Monday that employers must pay workers for all hours worked remotely that the business knew about or had reason to believe were performed—wading into an employment issue that’s taken on heightened importance during the pandemic. That can include situations where the employer didn’t want the employee to work extra hours.
“Due to the coronavirus pandemic, more Americans are teleworking and working variable schedules than ever before to balance their jobs with a myriad of family obligations,” WHD Administrator Cheryl Stanton said in a statement. “Today’s guidance is one more tool the Wage and Hour Division is putting forward to ensure that workers are paid all the wages they have earned, and that employers have all the tools they need as they navigate what may, for many, be uncharted waters of managing remote workers.”
Critically, the guidance applies a “reasonable diligence standard,” relying on an old case decision, to determine when companies must pay for work that they had reason to believe was performed. This standard asks about work-from-home time employers should have known about, not what they could have known.
Businesses can exercise reasonable diligence in tracking unscheduled telework hours by setting up a process for employees to report that uncompensated time, the DOL said. The employer would then be responsible for paying for all hours reported through this system, and would be prohibited from discouraging workers from accurately reporting, the guidance said.
At the same time, it’s incumbent upon the worker to report unscheduled hours through the employer-established method; otherwise, the employer is generally not mandated to investigate the matter further, the agency said. Even if a business has access to records that would show how long the employee spent on a work-issued laptop, it wouldn’t be required to track this data to prove reasonable diligence, it said.
The guidance applies to any telework arrangement, not just work-from-home situations caused by the pandemic, the Labor Department said.