The Fair Labor Standards Act (FLSA) requires employers to pay nonexempt employees for all time worked and overtime for hours worked in excess of 40 hours/week. Ten years ago compliance with this requirement was relatively easy to achieve. You had your employees clock in and out every day when they were at work. When employees went home they were truly off-the-clock and inaccessible. With the technology we have today things aren’t nearly that simple and what is considered compensable time can get complicated, especially when you factor in remote working conditions, smart phones and cloud-based systems. These technological advancements create a great deal of freedom for our businesses and staff, but that freedom can be challenged when you consider the requirements of the FLSA. What’s considered compensable time? Is checking email and answering cell phone calls compensable? How do we make sure people are being paid for their hours worked and any applicable overtime? These are valid questions but with the right infrastructure in place companies should be able to clearly find balance between compliance and remote work.
Start with establishing three policies. The first policy is a safe harbor policy that states that if the employer inadvertently fails to pay a nonexempt employee properly, the employee must come forward and let the employer know so prompt action can be take
n to correct the unintentional error. This policy helps protects against claims that the employee didn’t know how to report incorrect time records and it establishes that the employer’s ambition is to be compliant with FLSA standards.
The second policy is a prohibition for working off-the-clock. This policy must clearly state that there will be zero tolerance for any work that is done “off-the-clock.” This policy should specifically state that employees are required to report any and all time that is worked and that failure to report time or directing a person to incorrectly report time are punishable offenses. Make sure this policy addresses how the company will deal with checking email and taking phone calls after the “established” working hours. Is this permitted or prohibited for nonexempt employees? Remember that if it is permitted that time should be recorded and compensable.
The third policy is an overtime policy. This policy should require that the employee’s direct supervisor preapprove any overtime. Establish that supervisor approval must be requested by the employee with an HR representative cc’d on that email. This email will give HR insight into the hours being worked and why overtime is necessary, while also helping to hold managers accountable for accurate time reporting. When managers are assessed on overhead budgets it can be tempting for them to alter an employee’s time to prevent increased costs. By including HR, a line of accountability is established and HR can be sure to address any questions that arise from the manager or employee.
After these policies are in place and everyone has acknowledged them, stick to them. Hold people accountable to these policies and consistently apply them to all nonexempt positions. Through the consistent application of these policies and the established open dialogue between employees, managers, and HR you can find balance between FLSA compliance and the benefits of remote work.