Wage and Hour Concerns for Employers of Remote Workers

Employers who allow workers to work remotely, or on a hybrid work schedule, could face challenges related to wage and hour compliance issues under the Fair Labor Standards Act (FLSA). Hourly workers who are not exempt from the FLSA overtime rules, which have no set or enforced policies on where and when they can work, could create major liability for employers under certain circumstances. 

While there is no way to eliminate the risk of FLSA violations with remote and hybrid workers, employers can take some steps to minimize their risk of lawsuits by employees and enforcement actions by regulatory agencies. 

First, employers must recognize that many states and local jurisdictions have laws extending beyond FLSA. As a result, employees working in those jurisdictions may qualify for mandatory overtime pay more quickly than employees working in other jurisdictions. State and local jurisdictions also may offer more generous benefits than on the federal level or the jurisdiction of the employer’s primary place of business, such as higher minimum wage levels and mandatory paid and unpaid leave time. 

Clarify the Laws that Apply to the Position

As a result of these potential conflicts, employers should address the issue at the outset of the employment relationship by clarifying in writing that they are hiring an employer to work in a certain location, that work in a different location is not permissible, and that only the laws of the specified location apply. 

If a worker chooses to move out of the jurisdiction during their employment, then the employer should immediately document the move. The employer then can reiterate that the employee is not permitted to work outside the jurisdiction. Alternatively, the employer can accept the move and confirm that the law of the new jurisdiction will apply to their job. In either case, the employer should have a legitimate business reason for rejecting or approving the employee’s move to the new jurisdiction. Employers can be geographically restrictive, so long as doing so does not violate federal or state anti-discrimination laws. 

Outline Compensable Time

The other major step employers can take to avoid wage and hour compliance issues is to define when employees can and cannot work. In other words, outline when they can receive compensation for performing work-related duties – and when they cannot. For example, employers should tell employees not to perform work off the clock or outside of normal business hours. Similarly, if employees work a hybrid schedule, it is not permissible to begin their workdays at home, commute to the office, and finish their workdays at the office. If employees structure their days in this manner, their commute time suddenly becomes compensable, which can violate overtime laws. 

HBL has experience in all areas of benefits and employment law, offering a comprehensive solution to all your business benefits and HR/employment needs. We help ensure you are in compliance with the complex requirements of ERISA and the IRS code, as well as those laws that impact you and your employees. Together, we reduce your exposure to potential legal or financial penalties. Learn more by calling 470-571-1007.

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Hall Benefits Law, LLC

HBL offers employers comprehensive legal guidance on benefits in mergers and acquisitions, Employee Stock Ownership Plans (ESOPs), executive compensation, health and welfare benefits, healthcare reform, and retirement plans. We counsel a wide spectrum of clients including small, mid-sized, and large companies, 401(k) investment advisors, health insurance brokers, accountants, attorneys, and HR consultants, just to name a few. HBL is passionate about advising clients, and we are dedicated to our mission: to provide comprehensive, personalized, and practical ERISA and benefits legal solutions that exceed client expectations.

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