Fair Labor Standards Act Alert: Balancing the Benefit of a Mobile Workforce with FLSA Compliance Challenges

In today’s competitive business climate, it is becoming more and more common for employers to provide their employees with the technology to work from outside the office.  Whether it is through the use of a Blackberry® or a laptop, or full-scale telecommuting, the current trend involves expanding the realm of the workplace beyond the brick and mortar of the office.

Although the idea of having a mobile workforce has its clear advantages, it also presents some interesting compliance issues with regard to the Fair Labor Standards Act, 29 U.S.C. §201 (“FLSA”).  Under the FLSA, all covered employees, whether hourly or salaried, are to be paid at least the federal minimum wage for all hours worked.  In addition, the FLSA requires employers to pay overtime equal to one and a half times the regular rate of pay to employees that work more than 40 hours in a week.

As the ability to work outside the office increases, it becomes more difficult for employers to track how much time employees actually spend working.  For instance, an employee may respond to work-related voicemails and emails from home, or during travel to and from the office.  Additionally, employees on a deadline often will do work from home via computer.

Employers who find that their employees are spending significant amounts of time working outside the office should be aware of two potential pitfalls that can potentially arise.  First, how does an employer know that employees are actually working the overtime that they claim?  Moreover, how does an employer ensure that it is complying with the FLSA and paying its employees for all overtime earned outside the office?

The best way to handle both of these questions is by implementing a written policy regarding overtime and working outside the office.  By creating such a policy, employers can protect themselves from fraudulent overtime claims, while also ensuring that the company is complying with the FLSA.

An effective policy should expressly prohibit overtime or “off-the-clock” work absent prior approval from the employer.  Additionally, employers should set out a clearly defined schedule of hours during which an employee is expected to be in the office, and when he or she is permitted to work from home or elsewhere.

As technology continues to grow, employers must pay careful attention to where their employees are working and how much time they spend doing so.  Otherwise, an employer faced with an FLSA audit may find itself longing for the days of the punch clock.

If you have any questions about the FLSA, or would like assistance creating a policy regarding employee’s use of technology and overtime, please feel free to contact our office.  Our firm has considerable experience in wage and hour compliance matters, and we would be more than happy to meet with you to discuss your concerns.

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