Discover how to calculate overtime pay accurately and fairly. Learn legal aspects, common errors, and special considerations in overtime calculations.
Mobile Devices: Minimizing Overtime Concerns
When employees can check into work 24/7 with their mobile devices, shouldn't employers be paying overtime for that remote work time?
Do your employees stay connected to the office with their mobile devices? While this may enhance productivity, it’s also a source of concern for overtime liabilities.
Despite advancements in technology, the laws governing overtime haven’t changed much in the last 50+ years. Still, it’s important to review overtime provisions and exceptions to minimize legal issues that may arise with employees working outside their scheduled work hours.
Which laws govern overtime?
The Fair Labor Standards Act (FLSA) outlines rules for several employment requirements, including minimum wage, recordkeeping, youth employment standards, and overtime pay. When there’s no state law that supersedes federal law, employees must be paid one and one-half times their regular wage rate for any time worked over 40 hours in a workweek.
To determine whether an employee is entitled to overtime, employers must define:
- If the employee is exempt from overtime; and
- If any time worked outside of regular work hours is classified as compensable.
How do I determine if my employee is exempt from overtime?
To be exempt from overtime, most employees must first be compensated on a salary basis of at least $35,568/year or $684/week. The Department of Labor (DOL) then specifies that an employee must also perform job duties that fit one of the following exemptions:
- Executive Exemption
- Administration Exemption
- Professional Exemption
- Creative Professional Exemption
- Computer Employee Exemption
However, not all FLSA exemption categories have minimum salary amounts. These include the Outside Sales Exemption, seasonal and recreational establishments, farmworkers, some drivers (and driver helpers), commissioned sales employees, and computer professionals. Learn more about these exempt categories here.
How do I determine if the work done outside of regular hours is compensable?
The Supreme Court of the United States (SCOTUS) defines “work” or “employment” as physical or mental exertion that benefits the employer. Oftentimes this is doing something, but other times this may be doing nothing.
When working remotely, the work is compensable if it’s a principal activity or if the employee is on duty. Unfortunately, mobile devices have blurred the line between when employees are expected to work and when they work independently and willingly choose to work. The degree of interference and control you have over an employee’s actions while working remotely play a key role in determining whether an employee is on call or has free use of their time.
To help deal with negligible amounts of work employees perform when off-duty, SCOTUS has adopted the “de minimis doctrine.” This doctrine says that penalizing employers for negligible violations is unnecessary, and that employers shouldn’t have to worry about compensating employees for de minimis remote work.
How do I know if my employee’s work is "de minimis"?
To determine if remote work is de minimis, employers should consider whether:
- It would be practical, from an administrative perspective, to record the additional time;
- The aggregate amount of additional remote work is significant; and
- The employee regularly engages in overtime work.
How do I minimize liability for employees working remotely that may qualify for overtime?
When nonexempt employees have mobile devices that may be used for remote work, you should take the following actions:
- Implement a Mobile Device Policy. Determine which employees need or should have access to employer-provided mobile devices or remote work options. Limiting access to nonexempt employees significantly reduces your liability. Consider requiring nonexempt employees to obtain authorization from a supervisor to work remotely prior to providing remote access and/or a mobile device.
- Ensure Proper Employee Classifications. Review FLSA exemptions carefully, paying close attention to an employee’s salary and job description. Consider updating the responsibilities in your job descriptions, as those oftentimes change over time.
- Keep Accurate Records of Employees’ Remote Work Time. When providing employees with an employer-provided mobile device, consider methods to monitor remote work hours and regulating employee connectivity.
- Train Staff on Overtime Regulation Issues. Set clear expectations for employee overtime work and working remotely. Managers and supervisors are responsible for ensuring employee compliance with overtime policies and should recognize any situation that exposes the employer to an FLSA liability.
In situations when work is not de minimis, employers are expected to pay overtime, even when it’s not authorized. For more information on this or other FLSA issues, please contact your certified HR expert. Not a current Stratus HR client? Book a free consultation and our team will contact you shortly.