In light of the increase in teleworking due to COVID-19 pandemic, the Wage and Hour Division of the Department of Labor (DOL) published a new guidance, Field Assistance Bulletin 2020-5, which addresses an employer’s obligations for compensating teleworking employees under the Fair Labor Standards Act (FLSA).

In light of the increase in teleworking due to COVID-19 pandemic, the Wage and Hour Division of the Department of Labor (DOL) published a new guidance, Field Assistance Bulletin 2020-5, which addresses an employer’s obligations for compensating teleworking employees under the Fair Labor Standards Act (FLSA).

Broadly, the FLSA requires employers to compensate employees for all time in which they are “suffered or permitted” to perform work on behalf of an employer, even where such was not directed or authorized by an employer. Thus, if an employer has actual or constructive knowledge that an employee has performed work on its behalf, the employer must compensate the employee for that time. As to constructive knowledge, the guidance explains that a “reasonable diligence” standard applies: if the employer should have known about the work performed, it must be compensated. This standard may be satisfied by “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.” In the event an employee fails to report work time 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.”

In the context of teleworking, the guidance explains that “the employer has actual knowledge of the employees’ regularly scheduled hours,” as well as “through employee reports or other notifications.” As to constructive knowledge, the same standard applies: an employer must compensate an employee for working time if it “should have acquired knowledge of such hours through reasonable diligence” – such as may be satisfied by having a reporting protocol for unworked time. However, critically, the DOL’s guidance explains that satisfying the reasonable diligence standard under the FLSA does not require an “employer to undertake impractical efforts” to determine if an employee has performed work, such as reviewing “non-payroll records of employees’ activities, such as records showing employees accessing their work-issued electronic devices outside of reported hours . . . .”

The DOL’s new guidance provides clarity under the FLSA regarding the extent to which employers must go to ascertain if employees have been working outside of their regularly scheduled shift. That said, employers should remain cognizant that states may have more restrictive requirements with which employers must comply.