Any businesses that have employees working from home, i.e., telecommuting, should establish a written telecommuting policy and have the employee(s) sign off on that document to acknowledge receipt. The document should set out the framework and processes for the telecommuting assignment, the number of hours the employee is expected to work and how hours should be recorded. It should emphasize that employees cannot abuse the system to work overtime. There are many additional issues implicated by the fact that many employees are working from home, not all of which have to do with proper compensation under wage-hour laws, but are of equal or perhaps even greater importance. The telecommuting policy must address these issues as well.

Wage-Hour Issues

Since the onset of the pandemic, I have been swamped with inquiries from clients about what they should do, or can do, vis-à-vis both their non-exempt and exempt work forces and how these folks can be properly paid, but at the same time remain compliant with the Fair Labor Standards Act. As a basic premise, employees must receive at least the applicable minimum wage (in whatever state the employee works) for all hours worked, and then must receive overtime for all hours exceeding 40 in a work week. However, employees are not guaranteed that 40-hour work week. This is the new normal for businesses throughout this nation.

1) FLSA Exempt/Non-Exempt Employees

When non-exempt employees work from home, there are several issues that arise and must be dealt with. Employers must accurately monitor and record the working hours of such employees, as these situations present great potential for abuse, e.g., padding hours worked at home. But for exempt workers, FLSA compliance is much easier. If an exempt employee does any work in a given week, even as simple or brief as sending/answering some emails or reading a short memorandum, that employee must be paid their full salary for that week. On the other hand, if an exempt employee performs no work at all in a week, then no salary is due them.

2) Recordkeeping

Employers who do not diligently keep records relating to hours worked for telecommuting employees will have a harder time disproving alleged FLSA violations. To avoid this issue, employers should create computer systems that employees are required to check in and out from, to ensure that remote workers are not working hours without the employer's knowledge.  It becomes difficult to defend a claim (much later on) by an employee that he "worked" many hours in a day/week when the employer has not implemented a documentary system to safeguard against that contingency.

One option employers may want to implement is to have employees call in when they begin work, take lunch and end their shift, or record their time electronically. They might want to have them record their time by hand and then submit that time on a daily basis. Whatever method is chosen, the employer must remind employees of the need to accurately record all working time and ensure that they record when they take lunch and breaks so the working hours are not needlessly inflated.

3) On-Call Time/Off Duty Communications (E-Mails)

Where a telecommuter claims that his employer requires him to be readily available and/or waiting for work during the day, the determination of whether such time should be compensated is extraordinarily fact-specific. This raises a nuanced and vague issue of compensation for "on call time." Beware. The entire band of the on-call time will be compensable if the employee cannot pursue his own interests. However, if the employee can enjoy his own interests (e.g., watching television, reading, etc.) then the time is not compensable. Employers should closely examine the nature of the work performed by telecommuting employees as well as the amount of time employees spend waiting for work or instructions. These cases can easily sneak up on an employer, and if there is more than one telecommuting employee falling into this category, the specter of a class/collective action looms.

It is also vital that supervisors not contact non-exempt employees after regular hours or encourage any work to be performed outside the normal shifts of the workers. That will be deemed compensable working time and if that extra work takes them above 40 hours in that week, it is then overtime. Even reading/responding to an email (or emails) will be deemed working time, and if more than a minute or two (e.g., de minimis), these minutes will add to the weekly total.

4) Travel Time

A thorny issue arises if the telecommuting employee must travel from his home to an office meeting or another remote location. Ordinarily, home-to-work travel is not compensable, however, under the principle of the "continuous work day," the telecommuting employee may be entitled to compensation for this travel. In this scenario, if the telecommuting employee begins his work day at home, answering emails and the like, if he/she then has to travel to the office for a meeting (albeit with social distancing maintained) that ordinarily non-compensable travel time will likely be "converted" to compensable time because the work day has already commenced and is "continuous."

Expenses Related to Teleworking

There is also the issue of expenses and/or reimbursement for expenses. Under the FLSA, employers cannot compel reimbursement of monies the employer has laid out for telecommuting expenses (e.g., extra phone line) if those deductions bring the employee's wages below the minimum wage. State wage-payment laws also apply. Under New Jersey law, employers cannot pass on to their employees the costs for items that are "rightly" the employer's business expenses (e.g., extra phone line). Note that the New Jersey Department of Labor (NJDOL) enforces the state Wage Payment Act in favor of employees, very strictly, so it is prudent for New Jersey employers to bear these expenses, or risk a full scale audit of all of its compensation practices if even a single employee files a complaint about being forced to pay for telecommuting expenses. Also, if the telecommuting is provided as a reasonable accommodation under the Americans With Disabilities Act, the employer will not be allowed to recoup the expenses from the employee. What if the employee breaks or damages the employer's computer or cellphone? Again, the NJDOL will likely take the position that this is also an employer expense. Only if (and this is based on my defending many employers on these matters) the damage was caused by gross negligence (whatever that may be) or the damage happens a second time, will the employer be able to recoup the costs of repairing/replacing the item.

Workers Compensation

Another issue lurking beneath the surface for telecommuting employees is that of workers' compensation. The home office can be claimed by the employee to be an extension of the regular workplace (and likely will be, if the occasion arises), subjecting the employer to a workers' compensation claim in case of injury (e.g., slip and fall). If the employee is working at home for the employer's benefit and not their own convenience, a "workplace" injury at home will likely be deemed arising from work. Employers should require that teleworkers conduct a home safety inspection, especially focusing on exposed extension cords or phone lines.  Someone tripping over such a wire, even if their own fault or negligence, can file a claim that will lead to employer liability. It is also prudent for employers to direct teleworkers to document, e.g., pictures, video, the safety of their home office. The employer should also require proof that the homeowner/renter insurance is current.

Cybersecurity

Lastly, but perhaps most crucially, the employer must ensure that the teleworker is equipped and trained to maintain the company's cybersecurity. Without IT professionals around to monitor and guide teleworkers, they may neglect to encrypt a document, accidentally disable a firewall or commit some other computer-security infraction, exposing the equipment and the employer to hacking. People may not realize that a baby monitor, or a smart appliance or other IT device may be entry points for hacking efforts. Many people prefer to use a single device (or set of devices) for both personal and business purposes, but this complicates things in the telecommuting context. We recommend that your IT department provide and maintain the authenticity of devices used by the teleworker that connect to the internet. Although this may appear as if "Big Brother is watching" or the employer is exerting too much control, security tools (e.g., antivirus, firewall, encryption) should be standardized to the extent possible.

The Takeaway

The first step is to adopt a policy addressing the concerns discussed above. For starters, the policy must forbid working overtime without direction or authorization. The work-at-home scenario is dangerous from the perspective that, without appropriate safeguards, it lends itself to abuse of overtime. My suggested policy is to simply pay the employee for the first instance of engaging in "unauthorized" overtime, so as to avoid a complaint to the Department of Labor.  But that employee should receive an immediate warning that this is not authorized and future instances of engaging in unauthorized overtime may lead to discipline.

The bottom line is that employers must be proactive. Managers should stay in touch with teleworkers and establish clear expectations as to how often and in what manner teleworkers should update and communicate with their supervisors. Likewise, supervisors should be clear and specific in advising teleworkers how soon projects or responses are due and should follow up promptly if these deadlines are missed. Starting each day with a quick check-in is a good tool, both from a work performance perspective and, of greater importance, an employee relations perspective.

Above all, supervisors should place an emphasis on being positive and encouraging, at the same time ensuring that performance standards and goals are met and adhered to. "The employee's work product and output will ultimately be the measure of their (and the employer's) success as teleworkers, but both employees and managers can become better at their jobs if these guidelines are implemented and complied with."

Mark E. Tabakman is a labor and employment attorney with Fox Rothschild LLP who handles both union and non-union matters for employers across the country.