Viewpoint: Avoid Remote Work’s Wage and Hour Minefields

Wage and hour issues loom large when it comes to non-exempt remote work. It is far for more complex than simply asking your non-exempt employees to record the total number of hours they have worked. Thank you SHRM for publishing my article on some of the more salient wage and hour issues employers need to consider relative to compensating their non-exempt remote workforce.

In March, when COVID-19 struck hard in the U.S., employers implemented emergency plans to allow virtually every employee who could work remotely to do so. In response to the emergency, many employers issued stopgap wage and hour policies.

With extensive remote work likely to continue for the indefinite future or become a permanent fixture of many workplace cultures, employers are well-advised, if they have not yet done so, to develop robust remote-work policies to ensure compliance with wage and hour laws. Here are some of the more salient questions to answer for nonexempt employees.

What Is the Employee's Schedule?

At least as a starting point, a remote nonexempt employee should work the same shift he or she worked while onsite. A 9-to-5 shift worked onsite remains in place once the employee begins working remotely.

That said, there may be reasons why an alternative schedule is preferable for either the employer or an employee. An approval process should be created to permit alternative schedules under which the total time from the beginning of the shift to the end of the shift is the same as the regular schedule.

What About Working Longer Shifts with the Same Number of Work Hours?

But what if the employee needs more flexibility—a longer day to work the same hours? Under the continuous-day rule, an employee generally must be paid from when he or she starts working until when he or she completes work. The continuous-day rule is not in sync with remote reality.

The U.S. Department of Labor (DOL) has recognized the need for flexibility and the reality of remote work. In guidance, the DOL has stated that the continuous-day rule may not apply to longer workdays with more breaks so long as the employee is paid for all time worked.

While DOL guidance is not binding on a court, the reasoning behind it hopefully would be persuasive. Unfortunately, there are no guarantees, and the analysis may not be accepted under state law even if accepted under federal law. And, with regard to federal law, it is possible that with the change in administration, there could be a change in enforcement position. 

There are steps an employer can take to minimize continuous-day-rule risks. For example, employees should be told all breaks must be a minimum of 30 minutes, with no work performed during them. Employers ordinarily are not required to pay employees for such breaks.

How Should You Set Start and Stop Times?

Employers need to communicate to employees that the onsite work rules for when work starts and stops apply to remote work as well.

For example, an employer might provide that:

• Unless there's an emergency, an employee cannot do any work before his or her scheduled start time without permission from a supervisor.
• An employee must log in before doing any work, even if before his or her start time.

There also should be a vehicle by which the employee can report working before logging in or working without prior approval.

Now take these recommendations and flip them for stopping time at the end of the day. Similar rules apply—employees shouldn't work past their scheduled time without approval, and they need to log off at the end of the workday.

What About Breaks?

Employers need to use similar break rules for remote and onsite work.

For example, for unpaid meal breaks, employees ideally should log on and off, and there should be a mechanism to ensure that they are paid properly if:

• The break is fewer than 30 minutes; or
• The break is 30 minutes or more, but the employee worked during the break. A reporting mechanism is essential here.

For rest breaks that are mandated by state law, employers need a vehicle to track that such breaks were taken during remote work, just as employers track such breaks when taken onsite.

What If There Is Actual or Constructive Knowledge of Unauthorized Work?

Even if an employer's time-keeping policies are pristine, the employer may be on the hook if it knew or should have known an employee has worked unauthorized and unrecorded hours.

Consider providing brief training to managers on some of the potential warning signs that an employee has worked off the clock. Start by looking at when an employee sends e-mails.

What Expenses Should Be Repaid?

If a nonexempt employee incurs expenses in order to work from home, in no case may the expenses reduce the employee's pay below the minimum wage (the higher of federal or state law).

In some states, an employer may have a separate obligation to pay for some or all expenses by remote workers. These states include, for example, California and Illinois. In these states, the obligation applies to exempt and nonexempt employees alike. The obligation may not apply if working at home is truly voluntary.

When an employer has a duty to pay, it can and should require advance approval at least for certain amounts. An employer should not pay for a $700 printer when a $200 printer is just fine.

Even if there is no duty to pay, ask whether payment would be fair.