Increasing use of employer-provided mobile devices is reshaping working practices worldwide. By staying connected to their offices, employees have been able to become more productive and more valuable to their employers. Indeed, it’s not unusual these days to find individuals checking their email during their morning commute, preparing a report from the local coffee shop or participating in a video conference from home, hours after the office has closed.
However, this connectivity revolution is also a source of concern for employers and employees alike. Employees worry about the amount of time they spend working outside the office. They feel increasing pressure, particularly during difficult economic times, to take their work with them wherever they go. Employers worry about overtime liabilities that may arise when employees work remotely during unconventional hours.
Ironically, this changing dynamic is still regulated by legislation that has not changed much in the last 50 years. Still, a careful consideration of overtime provisions and exceptions under applicable law can help employers avoid the liability that may arise when employees work beyond the traditional nine-to-five schedule.
FLSA Overtime Regulations and Penalties
Most employers in the United States are subject to the Fair Labor Standards Act (FLSA). Under the FLSA, there is no limit on the number of hours employees may work in any workweek, but employees must receive one and one-half times their regular wage rate for all hours worked over 40 hours in a workweek. Sanctions for violating FLSA overtime regulations can be severe, and may include fines of up to $10,000, imprisonment for up to six months, civil liability and any other penalty a federal or state court considers appropriate.
The main difficulties employers face when determining whether an employee working remotely is entitled to overtime compensation are:
· Whether the employee is exempt from overtime regulations; and
· Whether the employee’s remote work is compensable time.
If an employee falls within an FLSA overtime exemption, then the employer does not need to worry about how many hours the employee spends working remotely. The FLSA provides a number of exemptions to overtime compensation, such as exemptions for outside sales employees, computer and information technology personnel and certain commissioned workers of retail or service establishments.
However, the most common exemptions for employees using employer-provided mobile devices are known as the white collar exemptions.
The white collar exemptions apply to individuals employed in a bona fide executive, administrative or professional capacity.