Telework has increased tremendously during COVID-19. This requires that employers reassess employee management. Overtime is one aspect of telework that has not received much attention, but it needs to be part of every employer’s telework plan. The circumstances of telework, where employees may be often switching back and forth from work to personal matters has the potential to create tremendous overtime liability for employers.
Under the Fair Labor and Standard Act (“FLSA”), employers must pay non-exempt employees one and a half times the employee’s standard hourly rate for all the time worked in excess of 40 hours in a week. Telework does not exempt employees from FLSA. The only effect telework has on FLSA is that it makes it more difficult for the employer to monitor the hours an employee works. It is well established under FLSA that there is no “off the clock” work. Therefore, whenever an employee takes a call, reads an email, or fills out a form, etc., the employee is on the clock and that time needs to be included in the employee’s hours for that week. Now, in the world of telework, the lines between work time and personal time are constantly blurred. And many employers are at risk of overtime claims from employees who are now working at home, outside of the employer’s supervision.
Under FLSA, it is the employer’s burden to prove that an employee did not work more than 40 hours. If an employee makes an overtime claim under FLSA, the employee is not required to produce evidence to prove the alleged hours worked. However, the employer has the opportunity to provide evidence to refute the employee’s claim. Often, this evidence is in the form of time sheets produced by some sort of time clock and/or software. If the employer can produce timesheets to counter the employee’s claim of overtime, an employer may prevail. The timesheet is not conclusive evidence though, and the employee will be able to rebut the timesheet with further evidence that he or she worked additional hours. For example, if on Thursday May 31, the timesheet shows the employee worked from 8:43 am to 5:04 pm, but the employee produces emails that he or she sent after 5:04pm, it would be evidence that the employee worked additional hours that day.
As FLSA only requires overtime be paid to non-exempt employee, some employers think they can avoid overtime and make the employee exempt by paying the employee a salary and giving him or her a certain job title. This is not true. It is the employee’s job duties that determines whether he or she is exempt from overtime. If the employee’s job duties fall within the exemption of executive, administrative, or professional as described in FSLA, and the employee is paid a weekly salary of at least $684, then the employee is exempt from overtime. Otherwise, the employee must be paid overtime.
If an employer loses an overtime claim, the employer will have to pay the employee the wages owed, liquidated damages (equal to the amount owed to the employee), the employee’s attorney’s fees, and, possibly, punitive damages. In addition, the employer will have to pay for its own attorney’s fees to defend the claim. As you can see, a few hundred dollars of overtime can easily turn into tens of thousands of dollars of liability.
Here are tips for employers to limit overtime liability for employees working remotely:
- Determine which employees are non-exempt (eligible for overtime);
- Utilize third-party software to track the hours employees work;
- Prohibit managers from calling and emailing employees outside of work hours;
- Create an overtime policy that:
- Prohibits employees from working before or after they have punched in; and
- Prohibits overtime without prior approval.
If an employee works overtime, even in violation of the overtime policy, the employee must still be compensated. The employer’s recourse at that point would be to take disciplinary action against the employee for violating the overtime policy.
As a business law firm, Ser & Associates assists its clients in a variety of employee related matters, such as employment agreements, employee handbooks and developing employee policies. If you would like assistance with developing telework policies for your employees, please contact us today at 305.222.7282. And, please be sure to visit us at www.Ser-Associates.com and follow us on Instagram, Facebook, and/or LinkedIn.
