More frequently, employees are now working from home, an action sometimes referred to as “telecommuting.” Since telecommuters are not at the employer’s place of business, they cannot be directly observed performing their work. It is thus more difficult to establish what and how much work was actually performed. Nevertheless, the employer still has the obligation to compensate its employees for hours worked under the federal Fair Labor Standards Act (“FLSA”) as well as related state compensation laws. It is therefore important for employers to be able to establish an accurate timekeeping system. Recently, a United States Court of Appeals for the Tenth Circuit in Denver upheld the grant of summary judgment to an employer in a telecommuting and timekeeping claim.
Mr. Brown worked for Script Pro LLC, a developer and manufacturer of automated prescription drug dispensing systems and related software. He had been granted a leave of absence under the FMLA and, while on leave, claimed that he had worked 80 hours of overtime for which he had not been paid. In its decision upholding the grant of summary judgment for the employer, the court declared that in an FLSA claim for overtime compensation, it is the employee’s burden to first produce “sufficient evidence to show the amount and extent of work performed as a matter of just and reasonable inference.” In this case, the court found that Mr. Brown had in fact produced uncontroverted evidence that he actually worked the overtime he sought. To show how easy a burden that is to meet, note that “evidence” came only from Brown’s testimony, his wife’s testimony, and one discussion Brown had with his supervisor about working at home.
However, the key factors which led the court to deny Mr. Brown’s claim were that he did not enter any of the hours he allegedly worked from home in the Script Pro’s timekeeping system; nor did he keep any other record of any sort to document the hours he had actually worked.
The circuit court noted that the plaintiff’s burden to show the amount of overtime worked is only relaxed when the employer fails to keep accurate records. In this case, Script Pro had utilized a Kronos timekeeping system which could be accessed remotely by employees. In other words, Mr. Brown easily could have entered all his hours worked. As a matter of fact, under Script Pro’s policy, he was required to do so. Since he did not follow the company’s policy and enter actual hours worked into Script Pro’s timekeeping system, the employer’s failure to pay any overtime compensation did not violate the FLSA.
For those employers who wish to allow employees to work from home, this case reinforces the importance of a written policy requiring employees to report the hours that they worked from home on a regular and recurring basis. Similarly, having a system by which timekeeping entries can be made remotely is critical. Of course, it would be wise for supervision to review work hours claimed on a daily or at least pay-week basis.