The DOL recently published a new Field Assistance Bulletin explaining the obligation of employers to pay for non-exempt employees' "working time" and the obligation of those employees to track this time. It's not a change in the law, but instead a great reminder of the obligations the FLSA imposes on employers and employees.
An employer is required to pay its employees for all hours worked, including work not requested but suffered or permitted, including work performed at home. If the employer knows or has reason to believe that work is being performed, the time must be counted as hours worked. An employer may have actual or constructive knowledge of additional unscheduled hours worked by their employees, and courts consider whether the employer should have acquired knowledge of such hours worked through reasonable diligence. One way an employer may exercise such diligence is by providing a reasonable reporting procedure for nonscheduled time and then compensating employees for all reported hours of work, even hours not requested by the employer. If an employee fails to report unscheduled hours worked through such a procedure, the employer is not required to undergo impractical efforts to investigate further to uncover unreported hours of work and provide compensation for those hours. However, an employer's time reporting process will not constitute reasonable diligence where the employer either prevents or discourages an employee from accurately reporting the time he or she has worked, and an employee may not waive his or her rights to compensation under the Act.
What does this mean:
- Generally an employer must pay a non-exempt employee for all time during which the employer knows, or should know through the exercise of reasonable diligence, the employee is working.
- If an employer has reasonable reporting rules detailing an employee's responsibility to report the employee's working time, an employer must pay the employee for all such time reported.
- However, if an employee fails to report time pursuant to those rules, the employer is excused from any obligation to pay for that unreported time. An employer is not required to undertake efforts efforts to investigate, uncover, and pay for unreported time.
- An employer cannot, though, prevent or discourage employees from reporting working time to avoid paying for it.
What should you be doing now? Dust off your handbook and make sure it contains a policy explaining to employees their obligation to report working time and advising that they will not be paid for unreported time. Absent such a policy, you are responsible to exercise reasonable diligence to discover time employees are working, an exercise that will almost certainly miss time and result in exposure for unpaid time/overtime.
* Photo by Brad Neathery on Unsplash