Employers Take on Telecommuting

Tips to prevent wage and hour claims from homebound workers

With the increased availability of laptop computers, Smartphones and other electronic devices, more people than ever are working from home or at other remote sites.

This includes not only telecommuters, who are regularly scheduled to work either part-time or full-time from home, but also employees who normally work in the office but occasionally take home unfinished projects or even those workers who just respond to emails during off-hours.

The ability for employees to work from home can be a great benefit to both the employee and the company.

However, allowing employees to work at home also raises a number of legal issues that can be overlooked by many employers. Among the topics that need to be addressed to limit an employer's liability is the multitude of wage-and-hour issues for non-exempt workers – those employees who receive hourly wages or are subject to the minimum wage and overtime laws that are triggered with off-site work.

The Fair Labor Standards Act and similar state laws require that non-exempt employees be paid a minimum wage and one-half of their "regular rate" for all hours worked over 40 in a work week. Employers must also keep records of hours that employees work and the pay they have received. These laws apply regardless of whether the work is done at the office, at home or another remote location.

These laws also apply not only to the employee who is regularly scheduled to work from home, but also to the non-exempt employee who sends and responds to emails in the evenings, on weekends or other off-hours. If the company allows this work to be done, it must be tracked and the employee must be compensated, regardless of whether the employee makes a claim for it.

Because of these laws, one of the most significant challenges an employer faces in dealing with employees who work from home is accurately tracking the actual time worked. Employees who do work at home are essentially working under an honor system, with an employer forced – practically and legally – to take their employee's word.

One way for an employer to impose some guidelines and control is by having an appropriate telecommuting policy that includes the following:

  • Set standard hours when an employee should or should not be working.
  • Require that overtime be pre-approved.
  • Require employees to keep and submit daily or weekly time records.

And for employees using a computer network maintained by the company, employers can match work-hour submission with log-in and log‑off times. 

Merely posting these rules is not enough. Employers are often reluctant to discipline employees who perform work off-the-clock, especially if that worker is generally considered to be a dedicated employee that is generally favorably viewed for their willingness to go the extra mile.

However, in order to avoid liability, which can be significant, the policies must be consistently enforced. The wage‑and-hour regulations specifically provide that it is the duty of management to exercise its control and see that "work is not performed if it does not want it to be performed," when completed off the clock. An employer cannot sit back and accept the benefits of an employee's work without compensating the employee for it.

Accordingly, the employer can – and should – discipline an employee who performs unauthorized overtime work or any off-the-clock work. The employer is still responsible for wages for all hours worked, even if that work was not authorized.

The potential liability for running afoul of the applicable wage-and-hour laws can be significant, particularly if an employer has a large number of telecommuting employees. However, by establishing and ensuring that telecommuting policies comply with all applicable federal and state laws, businesses can help avoid such liability.

Joseph Vance is a partner of Miller Nash LLP. He is chair of the firm's Vancouver litigation team and regularly defends employers in employment disputes. He can be reached at 360.699.4771 or joe.vance@millernash.com.

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