Remote Work, Connectivity and the FLSA: Reduce Your Risks

Jun 29, 2015
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LAS VEGAS—In the age of 24/7 connectivity, it’s vital to establish control over worktime so as to reduce the risk of noncompliance with the Fair Labor Standards Act (FLSA) and the huge settlements that courts often impose for FLSA violations, advised Christine D. Hanley, J.D., speaking on June 29 at the Society for Human Resource Management’s 2015 Annual Conference & Exposition.

The “triangle” formed between the points of remote work, online connectivity and the FLSA “often seems like a dangerous and mysterious expanse of uncharted territory, full of ominous beings such as the Department of Labor [DOL] and an enthusiastic plaintiffs’ bar,” said Hanley, a partner with Ford & Harrison LLP in West Palm Beach, Fla.

Hourly workers not exempt from the FLSA’s minimum wage and overtime requirements are increasingly in service jobs that can be done remotely, thanks to technology. The benefits to employers can include increased productivity and lower infrastructure, Hanley noted, but managers are challenged not only to effectively supervise remote workers but also to control their hours.

It doesn’t matter how exempt professionals parcel out their time to get the job done and many may choose to work intermittently around the clock, Hanley explained. “But a majority of workers are still paid hourly and not exempt from overtime,” she said. Yet they, too, can connect to their workplaces online “and increasingly do so with their laptops, smartphones and tablets.” Moreover, business trends such as remote administration, cloud-based project management and bring-your-own-device policies are making remote work more commonplace.

Hanley used the example of an office assistant with filing responsibilities. Not long ago, this individual would have had to put stacks of papers into the right filing cabinets, requiring presence at the worksite. Today, the assistant is likely to be moving online files into online folders, which can be done anytime, anywhere—and might be if the employer doesn’t establish and enforce rules about when work can be done beyond the FLSA’s 40-hour standard workweek.

Ever-Present Liability

The huge volume of FLSA class actions is attorney-driven, Hanley pointed out, in part due to “the prevailing plaintiff fee scheme,” under which losing employers must pay the winning employee’s reasonable attorney fees and costs, in addition to paying to restore improperly denied overtime. The FLSA also authorizes the DOL’s Wage and Hour Division to assess employers penalties of up to $1,100 for each “repeated or willful violation” of the statute’s minimum wage and overtime requirements.

Another complicating factor, Hanley noted, is that under the FLSA, overtime work beyond 40 hours that is not requested but is “permitted” is viewed as compensable overtime, especially when employees have been given the means and ability to work remotely.

“Managers must be able to control what employees are doing,” she said. Supervisors must ensure that work is done “on the clock” and that employees understand when they are expected to work and when to stop.

To ensure that work is done only when the employer wants it done, Hanley advised asking a few core questions:

  • Who’s doing what for whom (exempt or nonexempt)?
  • What are they doing (the business purpose)?
  • How are they doing it (connectivity)?
  • Where are they doing it (remote working)?
  • When are they doing it (FLSA and overtime)?

She admonished employers to “record, record, record. Know when employees are working, and control their worktime,” which may mean telling them not to check work-related e-mail or limiting their access to connectivity tools.

Employers must be scrupulous about recording employees’ worktime, Hanley said, because employees assuredly know how many hours they’re putting in. “In fact, the DOL has an online app that employees can use to track their own time,” Hanley noted.

Two documents that are absolutely vital to have in place when supervising remote work, she emphasized, are:

  • A statement of understanding specifying where, when, how and why work is to be done, with employees signing off to indicate their understanding and agreement.
  • A safe harbor policy stating that if the employer inadvertently fails to pay a nonexempt employee properly, the employee must come forward and let the employer know.

Remember the ADA, Too

Along with FLSA compliance, employers should be mindful that remote work can be viewed as a reasonable accommodation under the Americans with Disabilities Act (ADA) and the ADA Amendments Act, depending on whether an employer that denies an employee’s request to work remotely can show that regular, predictable attendance is an essential requirement of the job. Expect more lawsuits in this area as well, Hanley warned.

Stephen Miller, CEBS, is an online editor/manager for SHRM. Follow Me on Twitter.

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