Will COVID-19 Be a Valid Defense to Accidental Wage and Hour Violations?

While focused on the challenges of operation during this time, many employers have relaxed their usual internal office recordkeeping and timekeeping procedures.  Further complicating matters is that by virtue of the Governor’s Executive Order many companies have non-exempt employees working from home. 

Despite the Government’s strong direction to conduct work from home, employers have received no indication that the requirements of the Fair Labor Standards Act (FLSA) will be relaxed.  As a result, employers should not anticipate that COVID-19 precautions will be considered a valid defense to any violations of wage and hour laws. 

For many employers, this situation creates an increased risk of violations of the specific timekeeping and recordkeeping requirements of the Fair Labor Standards Act (FLSA).  These violations could expose employers to back wages, administrative penalties, attorney’s fees, and fines. 

If you own or manage a company and answer “yes” to any of these questions, your company may be at risk. 

  • Do you have non-exempt employees working from home?
  • Are these employees setting their own work hours and break times?
  • Are employees who generally work a fixed schedule not keeping track of their own hours if they deviate from a fixed schedule? 
  • Are these employees responding to e-mails, texts, or phone calls from you during their “off the clock” hours?
  • Do you have clients or other staff who may be contacting these employees during their “off-the-clock” hours?

If you answered yes to any of these questions, you may be failing to meet your recordkeeping requirements and may also be failing to pay required overtime. 

The best way to avoid such violations is to put into place good practices that you and your employees will consistently follow.  We recommend that you:

  • Confirm that all of your employees are classified properly.  A common, but costly, mistake is the assumption that by labeling someone a “salaried employee” you are absolved of overtime requirements.  This is not true.  Unless an employee clearly satisfies the requirements for one or more of the exempt classifications under state or federal law, you must pay them overtime pay for all hours worked in excess of 40 hours per week.  This overtime payment is required despite the fact that you may pay these non-exempt employees an annual “salary”.
  •  Keep accurate record of your non-exempt employees’ hours, including their start time, stop time, and any breaks (and maintain these records), even when your employees are working from home.  This recordkeeping is required by law. 
  • Advise your non-exempt staff not to work and not to respond to work-related e-mails, texts, or calls while they are “off the clock.”  Enforce this policy.

If you have concerns whether your employees are misclassified, or you are concerned that you may be in violation of the recordkeeping or overtime requirements of the FLSA or related state laws, you should consult with an employment attorney regarding your best steps to protect your business moving forward.  There are certain provisions which may allow you to provide makeup payments to employees who have been inadvertently underpaid or misclassified.  This is one way to potentially avoid a wage and hour audit and the administrative penalties, fees, and fines that may follow a negative audit result.. 

The attorneys of the Employment Law Practice Group at Cooper Levenson are able to assist you in making sure that your work-from-home practices are in compliance with the law and can guide you on how to fix any issues that may have occurred during this unusual operational time.