Connected by technology: Are you staying compliant with overtime laws?

It’s hard to know when to draw the line when it comes to phones and laptops. As an employer, you know the drill about making sure your employees are compensated for any overtime work that they do. You know you’d be in hot water if you didn’t pay your employees the proper rate for their extra time. But have you considered the time that they put in at home from their electronic devices?

In our technology-dependent world, we tend to take laptops and cell phones for granted. They’re just a part of life. But when it comes to overtime pay, there are some things you need to know as an employer. Your liability goes up if you ignore the extra hours your staff put in outside of the office when they’re staring at a screen. We’ve got a few tips that you can follow to make sure that you’re paying your employees fairly for the amount of work they do.

What do I need to know about overtime laws?

The Fair Labor Standards Act states that employees are entitled to receive pay and a half (or 1.5 times their usual wage) for any amount of work they do that goes over forty hours in a week. If an employee puts in forty-eight hours in a week, for instance, they’d get forty hours of wages at their regular rate and eight hours at pay and a half. There are major consequences for not adhering to these laws, including hefty fines and even jail time.

Some employees are exempt from overtime laws. There are certain qualifications that allow for an employee to be considered exempt, or not eligible for overtime pay. (But that’s not an excuse to work anyone to death.) The FLSA considers all employees to be non-exempt, or entitled to overtime payment for extra hours, unless the employer can show without dispute that the employee in question meets the standards for exempt status.

How do I know if my employees’ remote work is considered overtime?

The employee’s exemption status and the work itself determine whether or not an employee needs to be compensated for remote work. If you’ve determined that the employee is non-exempt, you have to look at the work itself. Are you requiring the employee to work? Are you gaining from it? Are your employees “on-duty” while they work? They might need to be paid. Paying people is good.

Other considerations are whether or not the employee is doing this remote work of their own free will or if they’re being pressured or required to do it by their employer. The amount of oversight that the employer has is also a consideration—is the employee expected to respond to the employer at the drop of a hat? Is the employer pulling the strings? Was the employee assigned any tasks to do at the time of the remote work?

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What can I do to make sure that remote work is done in compliance?

To lower your chances of getting in trouble for noncompliance with overtime laws due to your business’s remote work, you can put the following things into practice. Your employees will thank you.

1. Establish a policy for cell phones, laptops, and remote work.

Some suggestions for your policy are:

  • Evaluate which of your employees really need a company mobile device. Only giving devices to those who require them reduces your chances of running into issues with remote work.
  • Have your non-exempt employees get permission from a supervisor to work remotely so that everyone is aware of the work being put in.
  • Make sure that your employees are clear on what their job responsibilities and hour requirements are.

2. Make sure your employee classifications check out.

You need to make sure that all of your employees are classified correctly as exempt or non-exempt. A good place to start is to familiarize yourself with FLSA exemptions so that you know what you’re looking for.

Once you know what gives an employee “exempt” status, classify your employees accordingly. Salary and job description play a part in determining who’s exempt. You also need to keep these records accurate by updating your employees’ job descriptions and responsibilities frequently. This will help you know if anything has changed with your employees’ status.

3. Don’t skimp on time logs.

You need to make sure to keep accurate logs of the hours worked by your employees. It’s important to keep track of the amount of work being done from home.

4. Get everyone on the same page.

By providing your employees with training, you ensure that they’re aware of your business’s remote work policies and their importance. Training will also help you to clarify your employees’ duties and your expectations for any overtime work.

Your supervisors also need to be aware of the liabilities that come along with increased connectivity to the office, so make sure to give them some quality time, too. They’re the ones monitoring your employees, after all. They should know why it’s so important to keep an eye on time spent working remotely.

Technology can be a good thing, but too much of a good thing…well, you know how the expression goes. If your employees perform any kind of remote work, you need to know if they’re eligible for overtime pay. If you don’t compensate your employees the consequences could be severe.  

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If you have any questions about overtime compliance or your insurance, contact us today. We’re happy to help answer any of your questions and help you make sure that your liabilities are taken care of. If you’d like to get a free quote on your business insurance, fill out our quote form or give us a call!