Nightmare #3: The Telecommuter

The increasing popularity of working at home is creating a variety of overtime problems and liabilities.

The FLSA does not contain any exemptions for telecommuting employees - the rules apply no matter the location at which the employee performs his or her work. This has led to scenarios in which non-exempt employees claim (usually after they leave your company) that during the last year they actually spent an average of 65 hours per week working - 40 in the office, and another 25 at home. Having received no overtime pay for their efforts, they now seek retroactive compensation, at time and one-half plus fines and penalties, for their efforts.

Every company that allows telecommuting or other work at home arrangements must establish and enforce policies that require non-exempt employees to keep detailed, daily time logs, and to turn them in weekly. The policy should also provide that employees are not to work more than 40 hours per week unless authorized in advance and in writing. Otherwise, your employees, not you, control and define your payroll budget.

SUMMARY: Most of our clients find these results to be a slap in the face, and the disheartening truth is that there is a vast array of additional and equally unforeseeable and confusing pitfalls in the overtime area.

For instance, do you really know who is exempt and who is non-exempt? Chances are that not all of the employees you consider to be professionals or executives are exempt from overtime requirements. There are detailed criteria that appear in the FLSA regulations and cases, and the decisions smacking employers for failure to pay overtime to a salaried professional or executive are legion.

Do you really understand how to calculate overtime payments? What if an employee works 30 hours one week, 30 hours the next week, and 45 hours the next week? Is the employee entitled to 5 hours of overtime, even though he worked less than 40 hours in the previous weeks?

Do you really know what kinds of records you are supposed to keep? If you are subjected to an FLSA audit, will your records explain and support what you did as required by the law?

The message to be taken from all of this is clear and simple: this is an extremely hyper-technical area, the potential liabilities are substantial, and it should not be trifled with or handled based on "common sense." A "preventive law" approach to these issues is mandatory.

Powell, Trachtman, Logan, Carrle & Lombardo, P.C. is a full service law firm with offices in suburban Philadelphia, PA, Harrisburg, PA and Cherry Hill, NJ. Powell Trachtman represents a variety of commercial enterprises, entrepreneurs and business executives in respect to their litigation, litigation avoidance planning, business formation, business transactions, estate and tax planning, and other needs. We are also approved defense counsel for numerous insurance carriers in matters pertaining to professional malpractice, products liability, employment practices, directors and officers liability, and many other fields. For more information, contact us at info@powelltrachtman.com and visit our website at www.powelltrachtman.com.

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