5 Ways Calif. Cos. May Avert Wage And Hour Class Actions

By Michael Nader
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Law360 (September 3, 2020, 2:41 PM EDT) --
Michael Nader
Michael Nader
Many California employers are adopting policies permitting remote work for another year during the pandemic, or even remote work as a forever option.

These policies present new risks for wage and hour class action and Private Attorneys General Act liability in California. One of those primary risks includes ensuring that employees accurately record all time worked and do not work off the clock. Employers should consider a proactive approach to addressing this major risk in managing remote workers.

First, consider requiring individual remote work agreements that emphasize ongoing employee compliance with the company's policies while working remotely. More specifically, reminding employees that they are required to accurately record all of their time worked to the minute, to refrain from working off the clock, to accurately record all of their duty-free meal breaks and to refrain from working during their meal breaks.

The agreement should also provide the name and contact information of a company representative who is designated to receive questions and complaints from employees about timekeeping issues and to investigate and resolve them promptly.

The agreement may also conclude with language enabling employees to acknowledge and agree that they have read the timekeeping policy, will comply with the policy, will immediately report any questions or concerns about the policy or if they ever feel required or encouraged to work off the clock, and that they know the company's policy that strictly prohibits retaliation for any such reports.

Second, for hourly, nonexempt employees working remotely, consider providing special training and regular reminders on the timekeeping policy in the context of working remotely. Creating a record that the company made a concerted effort to train its employees regarding their rights and obligations relative to this area of risk can be an important aspect of defending against class and representative claims of unpaid wages and off-the-clock work.

On Aug. 24, the Wage and Hour Division of the U.S. Department of Labor issued guidance on the "employers' obligation to exercise reasonable diligence in tracking teleworking employees' hours of work." The division explained that an employer must pay for all work that the employer knows or has reason to believe was performed, and that courts will consider whether the employer should have acquired knowledge of such hours worked through reasonable diligence.

According to the division, one way an employer may exercise such diligence is by providing a reasonable reporting procedure for nonscheduled time, and if an employee fails to use the procedure: "The employer is not required to undergo impractical efforts to investigate further to uncover unreported hours of work and provide compensation for those hours."

The division further stated that:
Though an employer may have access to nonpayroll records of employees' activities, such as records showing employees accessing their work-issued electronic devices outside of reported hours, reasonable diligence generally does not require the employer to undertake impractical efforts such as sorting through this information to determine whether its employees worked hours beyond what they reported.

As such, if an employee fails to use company procedures to report all time worked, the company is not required to sort through the employee's nontimekeeping records, like computer login records, phone records or CAD records, to determine the amount of additional time worked.

Consider, for example, a plaintiff who claims that he was forced to perform off-the-clock work while working remotely. During the deposition, the plaintiff admits that when he first started to work remotely, he received detailed training on how to accurately record all time worked, including all overtime; to never work off the clock; and to immediately report any concerns about his records of time worked.

He must also admit that each month he receives an email from the company reminding him to report all time worked, to report all overtime worked, to refrain from working off the clock — including work during meal breaks, and to immediately report any timekeeping concerns to human resources.

He also admits that the emails assure employees that they will not be retaliated against for reporting off-the-clock work. It would be difficult for the employee to show that the company somehow failed to exercise reasonable diligence to learn about all of the employee's time worked.

Third, consider providing employees with software they can use to record their time contemporaneously, including their start time, when they start their meal break, when they return to work from their meal break and when they stop working for the day. Consider adding the functionality in company-issued devices instead of requiring employees to add an app to their personal smartphones, which would entail other risks related to expense reimbursements for mobile phone usage.

Remote workers may also have other gaps of time during the day, longer and separate from legally mandated rest breaks — perhaps to run an errand or address a childcare issue — and they should be reminded to clock out whenever they stop work and to clock in again when they return.

Fourth, consider adopting a process where employees regularly attest to the accuracy of their timekeeping records. Attestation forms, in which employees memorialize their understanding or conduct, are a key tool for managing class action risks. Enable and require employees to electronically attest at the end of each shift, ideally, or each work week or pay period on whether they were able to accurately record all of their time worked and did not work off the clock.

Also provide employees the option of marking "no" and instructing them to immediately report the instance to HR for review. Also consider requiring the employee to acknowledge their understanding of the company's policy prohibiting retaliation for timekeeping-related complaints and that the company is relying on the accuracy and honesty of the information contained in the attestation.

Fifth, train managers and supervisors on how to manage a remote workforce that stays productive and compliant with company policies. Consider scheduling regular calls or web conferences with employees to review their deliverables and engagement, but also to ensure and document that employees are recording all of their time worked and whether they express any concerns about such issues.

With these five proactive steps, employers can prioritize their compliance resources to manage the largest risks by developing the evidence employers need to challenge class certification, or Private Attorneys General Act manageability, years before an action is filed.

Michael J. Nader is a shareholder at Ogletree Deakins Nash Smoak & Stewart PC.

The opinions expressed are those of the author(s) and do not necessarily reflect the views of the firm, its clients, or Portfolio Media Inc., or any of its or their respective affiliates. This article is for general information purposes and is not intended to be and should not be taken as legal advice. 

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