DOL Issues Opinion Letters Regarding Pay Calculations for Teleworkers, In-Home Caregivers
On the last day of 2020, the Wage and Hour Division of the U.S. Department of Labor (DOL) ushered out the year with two new Opinion Letters. These may be the final two Opinion Letters of the Trump Administration and perhaps the last two for a while, depending on whether the Biden Administration continues the practice, reimplemented during the current administration, or abandons it, perhaps in favor of the informal administrator interpretation letters issued during the Obama Administration. That remains to be seen but, for now, here is a quick summary of these latest Opinion Letters:
In FLSA2020-19, the DOL addressed an issue that has arisen during the Covid-19 pandemic, namely, what time qualifies as compensable work time for an employee who works in part at home (“teleworks”) and in part at the employer’s regular worksite (e.g. “the office”), particularly when the employee also attends to personal business at times during the day. In other words, how does the “continuous workday” rule come into play with remote employees? In setting forth its analysis, the DOL reiterated that compensable worktime is only that time spent “primarily for the benefit of the employer,” and if the employee is completely relieved of duties for a sufficient period of time such that it may effectively be spent for her own purposes, this latter time is not compensable worktime. Moreover, the DOL reminds us, normal commute time – whether to or from the workplace – is not compensable worktime.
In the Opinion Letter, the employer provides hypothetical scenarios, premised generally on an employee who normally works from 8:00 a.m. to 4:30 p.m. and has a one-hour commute but is now teleworking in part (presumably due to the pandemic). The employer then asks whether the employee’s travel time would be compensable, first under the following scenarios:
The employee leaves the office at 1:00, drives to a parent-teacher conference (PTC), attends the PTC for 45 minutes, then drives home and works at home the remainder of the day.
Same facts as Scenario 1, but the employee attends to personal business for an hour after arriving home and before resuming work.
Same facts as Scenario 1, but the employee’s personal time is extended to two hours.
Same facts as Scenario 1, but after the PTC ends, the employee attends to personal business for an hour, drives home, attends to more personal business for an hour, then resumes work.
The DOL concluded that under all of these variations, only the time spent working at the office or working at home is compensable. The travel time is normal commute time, and the personal time is not primarily for the benefit of the employer and is long enough to effectively be spent for the employee’s own purposes. Moreover, this is NOT the “worksite-to-worksite” travel that is considered compensable under the regulations. The employer is not requiring that the employee travel as part of her work duties; rather, she is traveling of her own volition and for her own personal purposes. “When an employee arranges for her workday to be divided into a block worked at home and a block worked at the office, separated by a block reserved by the employee to use for her own purposes, the reserved time is not compensable, even if the employee uses some of that time to travel between home and the office,” notes the DOL (emphasis added).
In the second scenario, the employee has a doctor’s appointment from 8:30 to 9:15. With permission, she works for an hour at home before the appointment but, after working from 5:00 a.m. to 6:00 a.m., she attends to personal affairs for two hours before leaving for the appointment. Following the appointment, she travels directly to the office, where she works until the end of the normal workday. She then drives directly home, where she undertakes no more work for that day.
Just as with the first scenario, the DOL concludes that only the time spent actually working, either at home or at the office, is compensable worktime. The employer did not require the employee to work from 5:00 a.m. to 6:00 a.m. – and that is important, because the outcome may have been different if the employer mandated when the work had to be undertaken (a scenario the DOL expressly notes it is not considering in this Opinion Letter). Rather, the employee chose to work at this time before undertaking personal tasks. As one court noted, if it were otherwise, an employee could get up and perform work in the middle of the night, then go back to sleep for several hours before arising again to leave for the office, and “she would be entitled to compensation for the time she spent unconscious….It simply cannot be the case that an employee is empowered unilaterally to convert her commute into compensable time merely by deciding to perform her daily routine in a particular manner.” Garcia v. Crossmark, Inc., 157 F. Supp.3d 1046 (D.N.M. 2015) (emphasis added) (quoting 29 C.F.R. § 785.16).
In FLSA2020-20, another pandemic-related Opinion Letter (albeit one with a narrower audience), the employees at issue are in-home or live-in caregivers who typically work shifts of 24 hours or more (commonly, 5-day/120-hour shifts). Because of the difficulty of tracking hours spent by the employees performing work-related tasks versus time that can be used effectively for their own purposes, the employer “pre-calculates,” based on a presumed 120-hour workweek, that all hours not reported for sleeping or bona fide meal periods (up to 8 hours per day) are considered compensable. For these hours, it pays the employees a half-time premium for all hours over 40 per week or 8 hours per day, and then pays an additional amount at 1.5 times the standard hourly rate for any hours worked in excess of the presumption (due, for example, to shortened sleep periods or meal breaks). The employer wants to know whether the overtime payments are excludable from the regular rate and whether they may be credited toward any overtime owed.
Yes to both, says the DOL. Provided there is an agreement or understanding (written or unwritten) between the employer and employee, 29 U.S.C. § 207(e)(5) “permits an employer to exclude extra compensation provided by a premium rate paid for certain hours worked in any day or workweek because such hours are in excess of 8 in a workday or 40 in a workweek. Section 207(h) further permits an employer to credit any payments excludable under Section [207(e)(5)] towards overtime pay owed under the FLSA” (citing 29 C.F.R. 778.202(a)).