In the age of wireless communication, employees are no longer dependent upon the confines of an office to perform their jobs. BlackBerrys and other wireless devices allow nomadic employees to enjoy increased mobility and work almost anywhere and anytime. Regardless of whether they are checking and sending e-mail, reviewing slides for an upcoming presentation or simply responding to messages received on a cellular telephone, they can continue to be productive while on the run. Yet, as mobile technology has spread from professionals and executives to entry-level workers, assistants, staff and other hourly employees, companies may inadvertently be exposed to violations of federal and state wage and hour laws.
Exposure to Wage and Hour Violations
The federal Fair Labor Standards Act (FLSA) and state wage and hour laws require employers to compensate non-exempt employees for all hours worked. They must also compensate non-exempt workers at the rate of one and one-half of their regular hourly rate for every hour worked in excess of a 40-hour work week. Certain employees, including those who qualify as executives, professionals, and administrative personnel, are exempt from these requirements. To be exempt from the requirement of being paid overtime, however, an employee generally must be paid at least $455 per week and must have job duties that qualify under the law. Nonetheless, common misconceptions abound in this area which have created exposure for misclassification.
Pursuant to the wage and hour laws, the analysis for exemption must be based upon the job duties of the employee, not simply a given title or whether they are paid on a “salaried” basis. Significant changes to “white collar” exemptions were announced by the Department of Labor in 2004, and became effective in August, 2004. The “White Collar” exemptions under the FLSA that require an employee to be paid on a salary basis include the following categories:
- "Administrative" employees are required to occupy a "position of responsibility." The employee must perform non-manual work of substantial importance exercising discretion and independent judgment, which would include helping to formulate or interpret management policy or having a high level of skill or training.
- "Executive" employees must direct the work of at least two other full-time employees and "have the authority to hire or fire other employees…" or have input into the hiring or firing of others or other changes of status such as advancement and promotion.
- "Professional" employees must have "knowledge of an advanced type in a field of science or learning customarily acquired by a prolonged course of specialized instruction and study…" Doctors, lawyers and pharmacists are examples of those who meet this definition. The new rules also allow employees to qualify for the exemption with a combination of intellectual instruction and work experience, arguably broadening the scope of this learned professional exemption.
- "Highly compensated" employees would also have an exemption if they are office or non-manual workers who receive at least $100,000 per year and perform at least any one or more of the exempt duties or responsibilities of an executive, administrative or professional employee.
Most Employees Are Using Mobile Technology
In the past, company-issued mobile technology was reserved for high-level employees who were frequently traveling and constantly in need of access to their work mailboxes and documents. As mobile technologies evolve (and become more cost-effective), traditional office norms and employee expectations have begun to shift towards more flexible office hours and universal remote access to work e-mail and files for all employees. Moreover, individuals have their own wireless mobile devices from which they perform both work-related and personal tasks. Consider the fact that the mobile phone is now expected to replace the personal computer as the primary device for getting on-line.
An April 2008 special report in The Economist detailed a growing number of small companies that have completely abandoned the formal office in favor of a completely remote workplace. The danger, of course, is that when non-exempt personnel are given remote access to work e-mail and files, the expectations and demands of their superiors may increasingly require them to work remotely, in addition to the time they spend at the office. Courts have been clear that when non-exempt employees are required (or even allowed) to perform work remotely beyond 40 hours per week, their time must be compensated under the FLSA and analogous state laws. When such work occurs due to work activities that result from increased access to cellular phones, laptops, PDA’s or pagers, employers enjoying increased productivity may soon discover that employees will seek increased compensation, including overtime for this additional work.
What Can Employers Do To Avoid Claims?
For companies that have already expanded or are considering expanding remote access to non-exempt employees, policies and practices should be adopted to limit company exposure to unwanted overtime liability. As a preliminary matter, mobile technology devices should be provided only to employees whose work duties specifically require remote access. Policies should further specify that overtime must be expressly authorized by management, and reported and reviewed in weekly or monthly intervals to ensure that unexpected overtime resulting from out-of-office work can be addressed before it becomes a problem. Finally, employers should include the company policy in their employee handbook and include reference to remote access issues as they pertain to overtime in training sessions.