By Anne Cullen

Law360 (September 11, 2020, 7:13 PM EDT) -- Businesses that have shifted their operations online are still legally required to make sure their employees are getting paid for all the time they work, but experts say getting reliable time sheets when many workers are off-site can be tricky.

The U.S. Department of Labor recently unveiled guidance on how businesses can stay in compliance with a workforce clocking in from home, which boils down to a recommendation that businesses exercise "reasonable diligence."

That term's exact definition may seem like a moving target for many businesses, according to Littler Mendelson PC shareholder Claire B. Deason, who specializes in wage and hour litigation. 

"What 'reasonable diligence' means feels a lot different when you're not down the hall from the worker that you're responsible for monitoring," Deason said. "Monitoring that work becomes a lot more challenging when it's in someone's private home."

Here are four tips that can help businesses accurately track employees' time in the era of telework.

Make It Easy to Clock In and Out

Employers are required to pay employees for all hours worked under the Fair Labor Standards Act, and the Labor Department has said the main way a business can fulfill these pay obligations is to give employees a reasonable process for reporting their time on-the-clock. 

Businesses should also make sure their system isn't too burdensome to use, according to Epstein Becker Green member Paul DeCamp.

DeCamp, who served as Wage and Hour Division administrator under President George W. Bush, said workers are more likely to bail on logging their time if the system is too complex or requires them to jump through multiple hoops.

"If it becomes too inconvenient for employees to enter his or her time, human nature being what it is, employees will oftentimes take shortcuts instead of taking an accurate accounting of their time," he warned.

If they don't skip it altogether, DeCamp said, they might wind up using a rounded number that could overstate or understate their real working hours by a significant amount.

A system that lets employees clock in and out electronically multiple times per day can be one of the most effective ways to track remote work, especially during the pandemic, experts said, as many people working from home have other responsibilities throughout that day, such as caring for children or other family members. 

For those who need to step away from their desk periodically during their traditional shift, a digital punch system can capture the most accurate picture of their day, said Shareef Farag, co-leader of BakerHostetler's wage and hour team.

"If you have a system that actually allows that, you have a much greater chance that the hours that are being recorded are the hours that are being worked, and I'd feel more comfortable relying on them," Farag said. 

Though Farag acknowledged that different businesses have varying budgets, needs and levels of sophistication, he said the key is to make adjustments where needed.

"You have to be flexible in finding solutions," Farag said, suggesting companies that use time sheets include an attestation for employees to sign off on in which they affirm the hours they enter are accurate and acknowledge the legal requirements surrounding overtime pay.

"It allows you to have a relatively contemporaneous record each pay period that the hours that are actually being submitted are the hours that are worked," Farag said.

Send the Right Message, From the Top Down

Even with a well-oiled timekeeping machine in place, employers are still at risk of violating wage and hour laws if the directive to report all time worked isn't making it all the way down the chain, DeCamp said. 

"If supervisors or managers are in some way discouraging employees from reporting all of their working time, then even your best timekeeping system is not going to protect the employer," he said.

The Labor Department made clear in its bulletin that "an employer's time reporting process will not constitute reasonable diligence where the employer either prevents or discourages an employee from accurately reporting the time he or she has worked." Businesses cannot impede accurate reporting, either "implicitly or overtly," the DOL said.

To avoid this problem, DeCamp recommended company leaders touch base with team leaders to ensure they are supportive of their subordinates' efforts to report all their hours, scheduled or not.

"Do what you can to find out if your supervisors or managers are doing what they ought to be doing," he said.

He added that upper management would also be wise to double-check.

"Consider at least spot-checking available sources of information — like electronic data, times when emails were sent, reports of productivity, that sort of thing — to watch out for underreporting of time or bad behavior by supervisors," he said.

If You Want People to Stop Working, Be Clear

As working from home has blurred the lines between work and personal time, employees who previously stuck to their scheduled shifts may increasingly find themselves knocking out some extra work after their traditional workday ends.

In situations where a company doesn't want employees working overtime — whether it's due to budget constraints or any other reason — the law says it's up to the employer to brush up their roster on their policies, even if they're in the handbook.

Under the FLSA, an employer is still on the hook for overtime even if it didn't want that work to be done, and a company rule against working outside of a set shift is not enough to protect the employer from liability if it didn't pay.

"If you have reason to believe that an employee is working off-the-clock and you have a policy that prohibits working off-the-clock, you need to enforce that policy," Deason told Law360. "It needs to be clear that the company stands by its rules."

Workers sometimes believe that their employer will be impressed if they are available at all times, so the employer must clear up any confusion, said Kathie Caminiti, co-chair of Fisher Phillips' wage and hour and pay equity practice groups.

"If an employer knows that somebody is consistently or even occasionally working beyond their regular hours, they have an obligation to pay for that time and tell the employee to stop," Caminiti said. "Sometimes employees think they're going above and beyond and they think it's appreciated, but they don't realize that they're creating challenges for the employers."

A gentle reminder about the rules can be fine, she said, but if it becomes a chronic problem, she suggested the employer take it a step further.

"You still have to pay, but if someone's disregarding your instructions, you can take corrective action," she said.

Don't Go Overboard With Surveillance

If an employee doesn't report their time through an established procedure, "the employer is generally not required to investigate further to uncover unreported hours," according to the Labor Department's recent guidance.

Even in the digital age, where businesses have more information than ever on what their workforce is up to, the regulator indicated that employers needn't transform into private investigators in trying to comply with the FLSA.

"Though an employer may have access to non-payroll records of employees' activities, such as records showing employees accessing their work-issued electronic devices outside of reported hours," the DOL said, "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."

While the guidance doesn't explicitly say businesses don't have to surveil their employees, Deason said that's her takeaway.

"This expectation of reasonable diligence generally doesn't extend to sifting through records of when someone is using their work laptop, or heaven forbid, using their webcam to see where they are," she said.

Skadden Arps Slate Meagher & Flom LLP labor and employment partner Karen L. Corman added that it's about striking a balance to get the information the company needs.

"Whatever system you use, it can't lead to management being able to bury their head in the sand and ignore clear signs of off-the-clock work," Corman said, "but on the other end of the spectrum, it doesn't mean you need to go and monitor everybody to see when they're logging in and out of their work-issued devices throughout the day."

--Additional reporting by Jon Steingart. Editing by Breda Lund and Philip Shea.

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