Telecommuters

Limiting Your Liability for Labor Violations

In the age of the Internet and Smartphones, more companies are allowing their employees to telecommute. Many employees now telecommute from a coffee shop, from home, or even from the beach. The flexibility of telecommuting has proven to be a generous perk for employees and allows an employer options to stay connected to employees when they travel away from the employer's place of business. However, the option of telecommuting brings wage and hour implications.

Tracking Hours Worked

The Fair Labor Standards Act (FLSA) and Maine's wage and hour labor laws require employers to record the hours worked for their non-exempt employees, there is no such requirement to maintain records for exempt employees. These requirements apply to telecommuting employees in the same manner as traditional employees' located onsite or in an office.

Employers must be proactive in tracking the number of hours worked, as well as taking preventative action to ensure that employees are not working over their 40-hour work week. In the event that an employee is working overtime to meet job requirements, employers can be held liable for overtime wages. Employers who know or who have reason to know that an employee is working beyond the 40-hour work week must account for those hours and pay requisite overtime. When employees telecommute, employers might find difficulty in tracking the number of hours worked or supervise employee activities. For employers who do not want to be held liable for overtime, employers must have a clear message to employees to track employee hours and to compensate employees who work overtime. To ensure compliance, an employer may have to administer disciplinary action.

Before allowing employees to telecommute, employers should first conduct an internal audit of exempt and non-exempt positions to ensure that employees are correctly classified.

Problems

If an exempt employee alleges misclassification, employers likely have no time records for that employee with which to rebut allegations of overtime worked. The employee need only establish a reasonable inference of hours worked. The employee may do this solely based on the employee's credible testimony. Even if the employee only establishes an approximation of hours worked for which overtime is due, this may be enough to establish records. Employers must remember that both federal and state law requires that the maintenance of recordkeeping lies with the employer. In the absence of records, the hours must be reconstructed.

Employers should also investigate the "homeworker exception" of the FLSA which state law mirrors, addressed in 29 C.F.R.  785.23. This exception accounts for the difficulty of tracking hours worked for telecommuting employees and stipulates that the parties may form a reasonable agreement regarding tracking hours worked at home. Such agreements should be carefully drafted to ensure that no unfair agreement is created in which the employee is not properly compensated for hours worked in the 40-hour work week.

Travel Time

Another issue that may arise in the context of telecommuting employees is compensation for travel. Generally, employers are not required to compensate for travel time to and from work; however, if the employee has started job responsibilities at home or at any other location, any additional travel to and from the office location could be considered compensable working hours. In these cases, employees will start their workday at the offsite location and then be required to come to the office for a meeting. Once the workday starts, employers can be required to pay compensation for the additional commute.

The principles that apply in determining whether time spent traveling constitutes hours worked depend upon the kind of travel involved. Time spent traveling during normal work hours is considered compensable work time. Time spent in home-to-work travel by an employee in an employer-provided vehicle, or in activities performed by an employee that are incidental to the use of the vehicle for commuting, generally is not "hours worked" and, therefore, does not have to be paid. This provision applies only if the travel is within the normal commuting area for the employer's business and the use of the vehicle is subject to an agreement between the employer and the employee or the employee's representative.

Example One: Home-to-Work, Special One-Day Assignment

Different rules apply when you regularly work at a fixed location in one city and are given a special one-day assignment in another city.

For example, an employee works in Augusta, ME with regular working hours from 8 a.m. to 5 p.m. (with a 1-hour lunch) and he/she is given a special assignment in Presque Isle, ME. The employee is instructed to leave Augusta at 8 a.m., arriving in Presque Isle at noon, ready for work. The special one-day assignment is completed at 3 p.m., and the employee returns to Augusta at 7 p.m.

Such travel cannot be regarded as ordinary home-to-work travel. The work was performed for the employer's benefit and at his or her special request to meet the special needs of the company and the assignment. This type of travel would qualify as a necessary part of the principal activity which the employee was hired to perform on this particular workday.

Because the employee is driving to complete the special assignment, the travel time would be considered hours worked. However, if the employee is a passenger and some part of the travel occurs outside of regular working hours, the travel time outside of the employee's normal hours may not be deemed as hours worked.

Example Two: Travel that is all in a Day's Work

Time spent traveling as part of the employee's principal activity, including performing job-related work prior to getting to the work site and traveling between job sites during the workday, is hours worked. This would be the case whether the employee travels as part of the principal activity on a regular basis or only infrequently. The time spent in this type of travel is part of the day's work, and must be counted as hours worked regardless of contract, custom, or practice.

  1. Construction workers are often required to report at a designated meeting place where they are given instructions, pick up tools or supplies, or perform other work prior to traveling to the work site. The travel from the designated meeting place to the work site is part of the day's work, and must be counted as hours worked.
  2. Time spent traveling from customer-to-customer by a plumber who makes house calls to do repairs is hours worked.
  3. A computer technician who finished his or her work on the premises at 5 p.m. is then sent to a client's site to perform technical support on the client's system. The computer technician finishes at the client's site at 8 p.m., and then returns to his or her employer's premises arriving at 9 p.m. All of the time (from 5 p.m. to 9 p.m.) is hours worked. However, if the technician went home instead of returning to the employer's premises, the travel time after 8 p.m. is not hours worked. The time after 8 p.m. is normal home-to-work travel.

Example Three: Travel Away From Home Community Involving an Overnight Stay

Travel that keeps an employee away from home overnight is travel away from the home community. Travel away from home is clearly hours worked when the travel takes place during the employee's regularly scheduled hours of work. The employee is simply substituting travel for other duties.

If the employee is normally scheduled to work 8 a.m. to 5 p.m., Monday through Friday, travel time on an airplane, train, boat, bus or in an automobile during these hours is considered hours worked on Saturday and Sunday, as well as on the other days.

As an enforcement policy, MDOL will not consider as hours worked that time spent in travel away from home outside of the employee's regularly scheduled hours of work as a passenger on an airplane, train, boat, bus or automobile. If the employee is driving while traveling (as opposed to being a passenger on an airplane, in an automobile, bus or train, etc.), the travel time outside of the employee's normal hours of work could be considered hours worked, depending on the circumstances.

Avoiding Allegations of Non Compliance

While telecommuting programs are often desirable arrangements for both employers and employees, such programs should be carefully evaluated given the implications under the FLSA and state labor law requirements.

Current technology, health, environmental, economic, and even legal conditions provide many companies with powerful incentives to permit and even encourage telecommuting. However, the "out of sight" telecommuter does not make traditional workplace legal issues disappear. Employers must plan and manage their telecommuting programs to avoid legal risks. A key first step is to develop clear policies setting forth the scope and procedures of the employer's program so that both the employer and the telecommuting employee maximize the potential benefits and minimize the potential risks.

Steps to Consider

  • Enter formal agreement with employees about work hours
  • Use time sheets to record the actual hours worked
  • Develop a written policy banning overtime without prior approval (however payments must be paid if overtime is worked, regardless of approval)
  • Create strategies for monitoring employees work-related activities
  • Properly compensate employees for all hours worked, including overtime
  • Reduce time employee spends waiting for work or instructions
  • Develop policy addressing pay for travel time to and from the office
  • Avoid transforming exempt telecommuter's position into non-exempt position

Other Potential Violations to Consider with Telecommuters

Accommodation Issues

Employers also face a difficult challenge when several employees want to telecommute and you cannot accommodate all of them. As a rule of thumb, jobs that are information-based, predictable, or portable, require minimum supervision and face-to-face contact, or demand more than typical privacy is suitable for telework. Developing a written policy outlining your company's criteria for being selected to participate in telecommuting is paramount. Certainly, the prudent employer will consider employee need.

For example, the Equal Employment Opportunity Commission (EEOC) and Maine Human Right's Commission (MHRC) require reasonable accommodation of an otherwise qualified employee's disability. Employers should at least consider telecommuting as a form of reasonable accommodation if the disabled employee can perform the essential functions of the job. (See www.eeoc.gov/facts/telework.html.) Thus, refusing a disabled employee's request to telecommute when a similarly situated nondisabled employee's same request was granted can be problematic.

In addition, leave of absences under the Family Medical Leave Act (FMLA) or the state's Family Medical Leave (FML), should be treated the same regardless of location of the employee. However, employers should revisit an employee's eligibility for leave protections under both FMLA and FML to determine if the employee still qualifies for leave protection.

Workplace safety

The Occupational Safety and Health Administration (OSHA) does not govern telework in home offices. The agency issued a directive in February 2000 stating that home office inspections will not be performed, will not hold employers liable for employees' home offices, and does not expect employers to inspect their employees' home offices. (See OSHA Directive CPL 2-0.125 for more information.)

OSHA will conduct inspections of other home-based work sites, such as "home manufacturing operations," only when the agency receives a complaint or referral that indicates a violation of a safety or health standard that threatens physical harm or that an imminent danger exists, including reports of a work-related fatality. The scope of the inspection in an employee's home will be limited to his or her work activities. Note, however, that the OSHA directive deems employers responsible for home work sites if there are hazards caused by materials, equipment, or work processes that the employer provides or requires to be used in an employee's home.