“Ask Sheila” Column
With so many employees working from home this year, our Director is questioning our non-exempt employees’ overtime claims, or even if they are working a full day. He suspects other employees of working on nights and weekends but not writing down their overtime hours. He wants to track their hours more precisely, and not pay for any hours not actually worked or not authorized, and does not want a big overtime bill in the future. Any suggestions?
What are They Doing all Day?
Dear What are They Doing,
This is an issue we have been dealing with even before COVID-19, but it has really come under the microscope lately. The U.S. Department of Labor recently issued Guidelines on employers’ obligations to track and pay hours accurately when the non-exempt employee is not working in the office. This guidance does not change what the law has always been, but provides more focus on the issue. The Guidelines are not just for telework related to COVID-19, but apply anytime the employee is not checking in and out of the office, including working at home, field work after hours, etc.
Bottom line, employees must be paid their hourly rate and overtime whenever they are performing work for the employer, whether or not it was authorized. The proper remedy for dealing with unauthorized work and overtime is through the disciplinary process and not through withholding pay. Employers should have a clear and widely-known policy that no unauthorized overtime may be performed, in order to take disciplinary action.
Employers must perform “reasonable diligence” to make sure they are tracking hours accurately, even when such hours are unscheduled or unauthorized. The DOL suggests having a system for tracking hours worked, such as establishing a mandatory reporting procedure for non-scheduled time. Employers are also expected to look at electronic time stamps of when work is done and when communications come in, especially when more or faster work than expected is being performed. If the employer “should have known” that more work was being done than the employee reported, the employer must pay for that work, even at overtime rates. There can be no “off the clock” work done, even when teleworking, and both policies and supervisors must emphasize that. A few years ago the DOL assessed millions in overtime liability against a Texas state agency, when non-exempt child services workers often spent time outside their work schedule to help children, but were told there was no overtime in the budget. The employees cared more about the children than their overtime, so they did this work off-the-clock voluntarily. The DOL used log-in times, communication date-stamps, and calendar appointments to prove up the overtime, and to show the employer should have known about it. Remember, employees cannot “waive” their right to overtime.
Conversely, employers do not have to pay for work that it had no reason to know was being performed. To withhold pay, the employer has the burden to prove it made every effort to maintain compliance with its reporting rules to show it could not have known the work was not done. Besides having a reporting system, employers may look at time logged off the system, lack of electronic communications or responses during the time period, not answering the phone, and the employee’s failure to report the time using reasonable procedures. If you suspect an employee is not working during scheduled hours, you can call or send short-notice meeting invites to test if they are at their desk (while accounting for normal break and meal times). You may also work with employees who have remote school childcare obligations to allow a more flexible schedule, and authorize a longer work day, but with more breaks throughout.
Not paying for work that an employee claims was done is very risky for employers, and it is usually a better practice to focus on performance management and discipline for lack of efficiency, failure to respond to calls and emails, failure to get a certain amount of work done in a day or week, and failure to show up at video-conferences, for example. You may also discipline for working unauthorized overtime if you have a strong policy in place prohibiting unauthorized overtime. Finally, you should have a time tracking system that allows employees to easily clock in and out of work, rather than simply providing a total number of hours worked each day, as a more accurate system will hold more credibility with the DOL in an audit.
“Ask Sheila” is prepared by Sheila Gladstone, Chair of the Firm’s Employment Law Practice Group. If you have questions related to this article or other employment matters, please contact Sheila at 512.322.5863 or firstname.lastname@example.org.