Are You Properly Compensating Your Remote Employees?   

September 2, 2020 at 9:28 am Leave a comment

How do you keep track of the hours that your remote employees are working?  Are you adequately compensating them for their work?  These issues have always been challenging but are made even more so now that an employee can be working at a home office one minute and playing with the kids in that same office a minute later.

Fortunately, the Department of Labor issued a guidance explaining the steps that employers should take to properly track the workload of their employees.  In my ever-so-humble opinion, it is a must read for your HR team.  If it is followed, it will help protect your credit union against claims that it is not compensating its employees for the work they perform.

We all learn in HR 101 (currently being taught remotely with no reduction in tuition) that under the Fair Labor Standards Act (FLSA) non-exempt employees are entitled to time and a half for all work they do over 40 hours per week.  Under this standard, eligible employees must be compensated for work they perform whether or not you asked them to do the work in the first place.  But this obligation is not unlimited; instead employees must be compensated for work that their employer either knew or should have known the employee was performing.  As the memo explains:

The question then is whether an employer’s inquiry (whether or not work was performed) was reasonable in light of the circumstances surrounding the employer’s business, including existing overtime policies and requirements; citations omitted …the law does not require [an employer] to follow any particular course to forestall unwanted work, but instead to adopt all possible measures to achieve the desired result.

How does an employer satisfy this standard as applied to remote employees?   The guidance explains that employers must demonstrate they have reasonable policies and procedures to allow employees to document their work hours.  Furthermore, employees must be made aware of these policies and must be required to follow them.  Finally, if the procedures require an employee to take certain steps, such as entering their overtime hours into a company portal, employees must be trained on how to perform these tasks.

To HR professionals, the guidance won’t be all that surprising.  It doesn’t announce new concepts so much as explain how existing legal obligations can be satisfied in the remote work era.  Nevertheless, it’s an important blueprint to follow.  Policies and procedures should be reviewed and updated.  This is truly a Golden Age for the HR attorney.


Entry filed under: Compliance, COVID-19, HR. Tags: , , , .

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Authored By:

Henry Meier, Esq., Senior Vice President, General Counsel, New York Credit Union Association.

The views Henry expresses are Henry’s alone and do not necessarily reflect the views of the Association. In addition, although Henry strives to give his readers useful and accurate information on a broad range of subjects, many of which involve legal disputes, his views are not a substitute for legal advise from retained counsel.

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