Given the ongoing considerations businesses face with the COVID-19 health crisis, many employers have increased the amount of teleworking for employees, including many roles that ordinarily would not telework. As the COVID-19 health crisis has progressed, employers have continued to extend their teleworking policies while other employers are gearing up to reopen offices. With these ongoing health risks, it is important for employers to review their teleworking policies and practices to ensure that they are appropriately compensating employees under the Fair Labor Standards Act (“FLSA”) as well as any applicable state and local laws.
Payment for Full Workweek for Exempt Employees
While employers do not need to worry about overtime pay for exempt employees, employers must ensure that they pay exempt employees for the entire workweek during each week in which the employee performs any work, even if the employee does not perform work for the entire week. 29 C.F.R. § 541.602(a). An employer, however, can pay an exempt employee less than the full weekly salary if the deduction falls within a regulatory exemption, which includes, but is not limited to, absences for one or more full days for personal reasons (other than sickness or disability), absences of one or more full days because of sickness or disability taken in accordance with a bona fide plan or policy, or absences for unpaid disciplinary suspensions, made in good faith, of one or more full days. 29 C.F.R. § 541.602(b). The FLSA does not require employers to pay employees during weeks in which the employee does not perform any work. It is important to note that where the employer mandates partial-week absences, exempt employees must receive their full weekly salaries. 29 C.F.R. § 541.602(a)(2).
Ensuring Employees are Performing Exempt Duties
Employers should also keep track of the type of work performed in exempt positions to ensure that the employees are performing exempt work. Under the FLSA, to maintain exempt status, an employee must perform exempt work as his or her “primary duty,” and time spent on these duties is a significant factor in determining whether the employee is performing exempt work. 29 C.F.R. § 541.700. Thus, even when employees are teleworking, employees should continue to perform exempt duties, particularly where switching to teleworking requires employers to redistribute duties due to layoffs or to allow employees to telework. However, the U.S. Department of Labor Wage and Hour Division published the COVID-19 and the Fair Labor Standards Act Questions and Answers (“COVID-19 FLSA Q&A), which notes that “during the period of a public health emergency declared by a Federal, State, or local authority with respect to COVID-19, otherwise exempt employees may temporarily perform nonexempt duties that are required by the emergency without losing the exemption.” While this provides some leeway to employers regarding the tasks performed while employees are primarily teleworking, employers should continue monitoring tasks performed by exempt employees to ensure that exempt employees are still primarily performing exempt duties and, if any non-exempt duties are necessary, that the exempt employees are not performing non-exempt duties for an extended period of time.
Time Keeping While Teleworking
Under the FLSA, employers must provide non-exempt employees at least the applicable minimum wage for all hours worked, plus premium overtime pay after 40 hours in a workweek. (State law or the parties’ agreement may require more.) These pay requirements apply to telework just as they do to work at an employer’s premises. Of note, an employer must treat as compensable work all working time, even if the employer has not authorized such work, if the employer “knows or has reason to believe” that the employee is working. 29 C.F.R. § 785.11. This includes any overtime hours, or any telework not authorized by the employer and any unreported hours of work so long as the employer knew, or had reason to believe, that the employee was performing that work. The Families First Coronavirus Response Act (“FFCRA”), which is a temporary measure effective from April 2, 2020 through December 31, 2020 and applies to employers with fewer than 500 employees, specifically states that “[e]mployees who are teleworking for COVID-19 related reasons must be compensated for all hours actually worked and which the Employer knew or should have known were worked by the Employee. 29 C.F.R. § 826.10.
As teleworking may create more difficulties for the employer to monitor hours worked by employees and thereby increase risks for off-the-clock work, the COVID-19 FLSA Q&A guidance states that employers may meet their obligations to appropriately compensate employees for time worked “by providing reasonable time-reporting procedures and compensating that employee for all reported hours.” Employers should consider using time-keeping software that allows non-exempt employees to contemporaneously record all hours worked. If utilizing new software, an employer may want to provide training, and testing of the software, to ensure that employees are aware of and know how to operate the time-keeping systems. Regardless, employers should communicate to non-exempt employees, particularly while working remotely, the importance of contemporaneous and accurate time-keeping for working time and for any unpaid meal breaks. Another good practice to ensure teleworking employees are following the time-keeping policies and reporting all hours worked, is that employers can require non-exempt employees to obtain authorization before working overtime or engaging in any other unapproved work. Creating, enforcing, and communicating these types of policies to employees will help ensure that teleworking employees continue to appropriately report all hours worked.
Potential Issues with Flexible Workdays
Generally, an employer must compensate employees for the “continuous workday,” which includes the time during the workday after the employee commences his or her principal activity through the time that he or she finishes the principal activity or activities. 29 C.F.R. § 785.9. As employees have more potential distractions while teleworking, employees may request flexibility in their normal scheduling. For instance, some employees may request time during normal working hours to attend to child care responsibilities. Given the added stressors with the current COVID-19 health crisis, the FFCRA states that the “continuous workday” rule “does not apply to employees while they are teleworking for COVID-19 related reasons.” 29 C.F.R. § 826.10. The COVID-19 FLSA Q&A further noted that the Department of Labor wanted to encourage flexible hours during the COVID-19 health crisis to allow an employee to work with breaks to allow employees to deal with any personal responsibilities, like child care, during the day. While the temporary guidance emphasizes the emergency measures taken because of the issues presented by the COVID-19 health crisis and the courts ordinarily defer to the Department of Labor’s interpretive guidance, there is no guarantee that the courts will defer to the Department’s newly articulated views regarding the “continuous workday” rule. Also, employers should emphasize that even where they agree to a more flexible schedule allowing the employee to work a non-continuous workday, the employer and employee should agree to a set schedule. Additionally, employers should ensure that employees are following the normal time-reporting policies. Employers should also refer to any relevant state laws, as this temporary guidance regarding the “continuous workday” rule applies to only the FLSA, and states may or may not choose to follow that approach.
Also, as employers begin reopening offices, some of the workforce may be teleworking while other employees are returning to work on-site. Employers should remain vigilant in ensuring that employees continue to accurately record all time worked, regardless of whether the employee works remotely or on-site. While the Department has curtailed the “continuous workday” rule under certain circumstances, employees have previously argue that travel time that is otherwise non-compensable becomes compensable if the employer requires employees to perform activities “integral and indispensable to his [or her] principal job activities” at home before commuting into the office or after the employee finishes their workday and commutes home. See Kuebel v. Black & Decker Inc., 643 F.3d 352, 358 (2d Cir. 2011). The Second and Ninth Circuit determined that where the employer does not require that the employee to perform duties at a specific time before or after going into the office, the commuting time is not compensable. See Id.; Rutti v. Lojack Corp., 596 F.3d 1046 (9th Cir. 2010). As employers begin to reopen offices, employers may consider limiting required on-site working meetings if part of the workforce remains working remotely. Most importantly, employers should ensure that employees continue reporting all working time.