In August 2020, the U.S. Department of Labor released Field Assistance Bulletin No. 2020-5. The bulletin addresses “Employers’ obligation to exercise reasonable diligence in tracking teleworking employees’ hours of work.”

While the bulletin covers issues arising directly from the COVID-19 pandemic, it also applies to remote work arrangements in general.

FAB 2020-5 affirms that employers subject to the Fair Labor Standards Act must pay nonexempt employees for all hours worked, including work done from home and work that is “not requested but suffered or permitted.” Regardless of whether you authorized the work or the employee requested it, you must pay the employee for work performed if you know — or have reason to believe — they did the work.

The FLSA specifically mandates the employer to exercise its control so that employees do not perform work the employer does not want done. In other words, the onus is on the employer to prevent work “when it is not desired.”

As the bulletin states, it may not be easy to define “when an employer has reason to believe that the work is being performed,” especially when the employee works offsite or at a location not controlled by the employer. Consequently, when resolving the issue of whether an employee should be paid for unscheduled hours worked, courts consider whether the employer should have — via reasonable diligence — acquired knowledge that the hours were being worked.

Conducting reasonable diligence

As mentioned, the reasonable diligence standard adheres to what the employer should have known (instead of what it could have known).

You can show diligence by implementing reasonable procedures for employees to report scheduled and unscheduled work hours.

If an employee fails to report unscheduled work hours through this reasonable reporting process, you do not have to undertake impractical measures to determine whether the unreported hours were actually worked. Such impractical measures may include weeding through non-payroll records to decipher whether the employee worked more hours than they reported.

Ultimately, by not using the reasonable reporting procedure to inform you of unscheduled work hours, the employee has effectively thwarted you from preventing the work. Additionally, they prevented you from knowing your obligation to compensate them. Importantly, “the FLSA does not require that employers pay for work that it did not know about and had no reason to know about.”

FAB 2020-5 makes clear that a time reporting system does not constitute reasonable diligence if it discourages or stops employees from correctly reporting their hours worked, or requires employees to waive their rights to compensation under the FLSA.

The salient takeaway is that employers with nonexempt remote employees should develop sufficient and transparent procedures for reporting scheduled and unscheduled work hours. If an employee fails to use this system, you may be able to successfully argue that they thwarted your efforts to prevent unwanted work.