Reasonable diligence in tracking remote workers

How to show “reasonable diligence” in tracking remote workers’ hours

Most employers know they must track work hours for nonexempt (hourly) staff. The U.S. Department of Labor’s (DOL) Wage and Hour Division (WHD) recently issued a Field Assistance Bulletin (FAB) to clarify how to do this when many employees are working remotely.

What are employers’ obligations?

A common issue with telework employees relates to an employer’s obligation to track work hours (and pay employees) when remote employees were not scheduled to work.

If an employer knows (or has reason to believe) that work is being done, that time must be counted as hours worked. An employer may not know about unscheduled hours worked by employees. Courts might consider whether the employer should have acquired knowledge of such hours worked through “reasonable diligence.”

Are employees checking and responding to work emails late at night after their kids are in bed? If so, those work hours must be tracked, and the employees compensated.

What is “reasonable diligence?”

One way an employer might show “reasonable diligence” is by providing employees with a reasonable way to report unscheduled work hours and then paying for these hours — even if they weren’t requested by the employer.

If an employee fails to report unscheduled work hours despite having a procedure in place, then the employer is not necessarily required to jump through hoops to investigate further, nor pay the employee for that time.

An employer’s time reporting process, however, is not considered reasonable if it prevents or discourages employees from accurately reporting their work hours.

What if employees don’t comply?

Federal law requires an employer to “exercise its control and see that the work is not performed if it does not want it to be performed.” The employer bears the burden of preventing work from being done.

That’s where company policies come in. Management has the power to enforce the rules (i.e., policies), and must make every effort to do that.

An employer, however, doesn’t need to be clairvoyant. Federal law stops short of requiring employers to pay for work they did not know about and had no reason to know. Their obligation is to make every effort to prevent employees from performing unwanted work. Thus, the obligation to pay employees for hours worked may be based on actual (or constructive) knowledge of that work.

For employees who telework, the employer has actual knowledge of the employees’ regularly scheduled hours and number of hours worked through reports or other notifications. So, if a manager receives an email from an employee at midnight, the employer likely knows that the employee is working at that time.

Though an employer may have access to non-payroll records of employees’ activities, such as records showing employees accessing work-issued electronic devices outside of reported hours, reasonable diligence generally does not require the employer to undertake impractical efforts such as sorting through this information to determine whether its employees worked hours beyond what they reported.

What’s the bottom line?

When an employee doesn’t follow established rules regarding a reasonable time reporting procedure, that prevents an employer from knowing it’s pay obligations, and the employer need not pay the employee for that time.

Also, when an employee doesn’t adhere to the time reporting system, the employer is kept from preventing unwanted work from being done. An employer could not have “suffered or permitted” work it did not know, and had no reason to believe, was being performed. Thus, failure to compensate an employee for unreported hours that the employer did not know about, nor had reason to believe work were being performed, does not violate wage and hour laws.