Wage and Hour Issues in the Digital Era

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Wage and Hour Issues in the Digital Era


Many employers routinely provide their employees with cell phones, laptops and other electronic devices with little thought to potential legal liability created by the use of such technology. Given the rise of class action lawsuits brought under the Fair Labor Standards Act, 29 U.S.C. § 201 et. seq., (“FLSA”), employers should be mindful of the pitfalls created by a digital workforce and take the appropriate precautions.

The Fair Labor Standards Act

The FLSA requires covered employers to compensate employees for all hours worked. Nonexempt employees (often referred to as hourly employees) are entitled to overtime compensation at the rate of one and a half times the employee’s regular rate of pay for hours worked over forty in a workweek. Employers must compensate nonexempt employees for all time spent performing work that is for the benefit of the employer. It does not matter that the employer did not specifically request that the employee work after hours; if the employee worked for the benefit of the employer, then the employer must compensate the employee. For example, if a nonexempt secretary comes in to work ten minutes early once a week to catch up on paperwork, she must be compensated for that time, even if she was not told to come in early to complete her paperwork. An employer may discipline an employee for working before or after hours without authorization, but an employer cannot refuse to compensate an employee for time worked for the benefit of the employer.

The Wage And Hour Risks Posed By Electronic Devices

While employers are usually well versed in accounting for hours worked by employees, employees’ use of handheld electronic devices pose particular problems. If a nonexempt employee chooses to review and respond to work emails prior to arriving at work in the morning or at night, before bed, regardless of whether the employer required the employee to do so, then that time may well be considered time worked for the purposes of the FLSA. The ease of checking emails on a smartphone or tablet or other similar electronic devices makes it convenient for employees to remotely check their email whenever they have a few minutes – even from the train while traveling home from work. However, unless the employee informs his employer that s/he spent that time checking email, then the employer may not record that time as part of the employee’s hours. Therefore, the employer may not properly compensate the employee. Even an extra 5 minutes of checking emails two times a day, multiplied by ten or twenty employees, can add up quickly.

Avoiding Liability

In light of the above risks, employers should carefully review their policies and plan their response now, before being hit with a wage and hour lawsuit.

First, employers may want to review their policies and strictly prohibit nonexempt employees from checking or responding to email or performing other work-related tasks remotely outside of normal working hours or without express authorization. Note, however, that an employee’s failure to secure proper authorization prior to working after hours does not excuse an employer from compensating an employee for that time. Instead, an employer’s recourse is to discipline the employee – perhaps, by cutting off the employee’s remote access. This may not be feasible for all companies or for all nonexempt employees but it is one method of reducing risk.

Second, employers should ensure that their policies clearly state that employees must report all working time spent on portable electronic devices. For example, employees would be informed that they must report all time spent reviewing and/or responding to emails outside of normal working hours, in order to ensure that they are properly compensated for all working time.

Finally, employers may want to consider limiting a nonexempt employee’s access to company provided email and/or portable electronic devices before and after working hours. In such cases, only exempt employees would be issued smartphones and other portable electronic devices. This approach, while drastic for some companies, virtually ensures that a company is able to accurately track all working hours by nonexempt employees.

With over 30 years’ experience in advising employers and employees on workplace issues, such as what to do with I-9’s, let Boznos Law work with you to ensure you are ready to meet the challenges posed by working in the digital era. Call Bill Boznos today at (630) 375-1958 or contact us at www.boznoslawoffice.com/contact-us through our website at www.boznoslawoffice.com


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