FLSA guidelines for employees working off the clock

If an employee responds to a work email while they’re off the clock, does it still count as compensable work? The answer is almost always yes. Even if answering an email only takes 5 minutes, those minutes add up. If you’re not paying your nonexempt employees for that off-the-clock time, you could be violating the Fair Labor Standards Act (FLSA).

Technology has made it easier than ever for employees to work off the clock, out of the office, and after hours. Half of employees say they’ve worked while on paid time off, according to the QuickBooks Time 2019 PTO survey. Unfortunately, overlooking and not compensating employees for their time can result in some serious penalties. Encouraging off-the-clock work may increase a business’s liability in an FLSA lawsuit.

But what can you do if you’re not aware of the time worked? As in all cases with the FLSA, ignorance is not an acceptable alibi. Fortunately, you can protect yourself, your company, and your employees from committing potential FLSA violations. We reached out to top wage and labor law experts to get the answers to your most pressing questions about working off the clock.¹

Staci Ketay Rotman

Littler Mendelson PC

Philip K. Miles

McQuaide Blasko

Dena H. Sokolow

Baker Donelson

Employees work off the clock when they continue to work despite not receiving compensation for their time. The FLSA has explicit definitions of what constitutes “hours worked.” There are some grey areas when it comes to training programs and types of travel. But, in general, any activity an employee performs that benefits their employer should be paid.

“Work that is ‘off the clock’ is any work performed for an employer that is not compensated and not counted towards a worker’s weekly hours for overtime purposes,” explains Sokolow.

Off-the-clock work may happen when an employee is not tracking their time spent on work activities, but their employer allows it to happen. Similarly, an employer may request an employee perform work duties off the clock. Both circumstances could be a violation of the FLSA.

The FLSA requires employers to pay all nonexempt employees for their hours worked. The FLSA says the workweek includes “all time during which an employee is necessarily required to be on the employer's premises, on duty or at a prescribed workplace.” The FLSA’s definition also includes any additional time the employee is allowed to work. The FLSA also considers rest breaks and on-call shifts on the employer’s premises as hours worked.

Nonexempt workers are entitled to the minimum wage and overtime pay based on their salary and job duties. Exempt workers fall outside of the job duties the FLSA covers. They also must make more than $684 per week ($35,568 per year), as per the 2019 update to the overtime salary threshold. Exempt workers are also exempt from overtime pay and are often (but not always) paid a salary wage. As a result, they may be more likely to perform occasional work duties “off the clock.” However, businesses should be cautious of misclassifying employees as exempt. Misclassification can result in its own FLSA violation.

Non-exempt workers must be paid for all hours worked and cannot volunteer to work off the clock. Even if they volunteer to work off the clock, the employer is required to pay them for their time. An employer cannot willingly allow or ask a non-exempt employee to work without pay.

The FLSA also has strict guidelines related to volunteer work and internships. In general, for-profit companies of any size cannot utilize volunteers. Nonprofit organizations and some public companies can utilize volunteers, but their employees cannot volunteer to do work that they typically would be paid to perform. Any person that is performing work that benefits the business or organization is seen as an employee of that business by the DOL.

Yes, employers should outline their policy on not permitting employees to work off the clock.

Both Philip Miles and Dena Sokolow agree. “It is very important for employers to communicate to their employees their policies on timekeeping, overtime, and off-the-clock work,” states Dena.

An example of an off-the-clock work policy is one that prevents non-exempt employees from performing any work duties while not tracking hours. 

Your policy should outline your expectations in requiring all non-exempt employees to track all hours worked. You can include examples of prohibited off-the-clock work, such as checking work emails at home or working through an unpaid lunch break. “The policy should explain when employees are permitted to work overtime and/or off-the-clock, and explain what authorization is required prior to such work,” notes Philip Miles. You can also differentiate between exempt and non-exempt employees if both types are working at your business. 

Also consider including guidelines for managers, as they should be expected not to request non-exempt employees to work off the clock. The policy can also outline guidelines on disciplinary action if an employee or manager violates the policy.

Consult with your employment counsel as you build your policy to ensure it doesn’t violate federal, state, or local laws. 

One common example of off-the-clock work includes performing work before clocking in or after clocking out. Another common example is performing work during an unpaid meal break.

Philip said these two types were the first to come to mind. “Oftentimes, the employees think they’re helping by putting in the extra time,” he explains. “They don’t realize that it’s a huge no-no and could expose their employer to wage and hour liability.”

However, the type of off-the-clock work can also vary based on the industry and job duties of an employee. “All job-related activities that benefit the employer and are associated with the job should be part of the employee’s paid time,” states Dena. She also provided a list of other common examples, including:

• Pre-shift work where the employee is asked to set up before shift, load or warm up trucks, transfer equipment, or prepare a worksite.
• Post-shift work, including clean-up of workspace, equipment or clothing, finishing tasks that “should have” been completed during the shift, or returning to another site to drop off equipment.
• Administrative work, such as completing paperwork, attending meetings, reviewing work documents, or undergoing training. This can also include work emails or calls done on an employee’s own time.
• Rework, such as when an employee is asked to redo a project or correct errors without pay.
• Waiting for work when none is immediately available. Time between assignments or time in which the employee is required or allowed to wait for a task count as work which must be paid.
• Working through an unpaid lunch break by performing work such as answering the phone, working on the computer, answering client or customer questions, or conducting sales.

Employers who do not pay employees for work they performed off the clock could be subject to wage and hour lawsuits. Those lawsuits can result in the employee collecting back pay for up to 3 years of lost wages. Additionally, the employer may experience investigations and audits from both the DOL and state agencies, and all the legal fees that come with these situations.

“Whether the employer is overlooking or encouraging off-the-clock work, it is illegal,” explains Dena. “Employees can file a complaint with the Department of Labor or a lawsuit for unpaid wages under the FLSA. Not only can the employee recover unpaid wages going back up to 3 years, but also ‘liquidated damages.’...[These] are often referred to as ‘double damages.’” In other words, the employers may be expected to pay damages on top of the wages that are owed, effectively doubling what is owed. Those lost wages can add up fast.

However, employees aren’t just entitled to their earned wages in these circumstances. The employer may also find themselves paying for the employee’s legal fees if the business is found at fault.

Dena also notes that former employees “can sue for unpaid wages on behalf of themselves and other employees similarly situated.” This can result in the employer back paying multiple employees for lost wages and liquidated damages. “[Employers] could be looking at a potential collective action under the FLSA (where employees ‘opt in’ to the class) or a possible class action under state wage and hour laws.”

Yes, according to Philip Miles. “If the employer is willfully violating the wage and hour laws, they will face steeper civil money penalties,” he says.

Luckily, employers actively encouraging their employees to work off the clock is less common, Philip explains. “Some employers either don’t realize that they’re violating the law...or find it easier to turn a blind eye rather than go out of their way to pay for that time.”

However, ignorance is never an acceptable alibi. Businesses can still be found at fault for violating wage and hour laws, even if they weren’t aware of the issue. Utilizing time tracking software can help ensure employees are accurately recording their time and being paid for all their work.

Thanks to smartphones and laptops, employees can easily check emails, answer calls, and access work from anywhere with an internet connection.

“Technology has allowed us the ability to work from anywhere,” explains Dena Sokolow. “This technology can be an off-the-clock nightmare when utilized by non-exempt employees.” Any work done outside of the office must be recorded as work time and paid. “As technology allows for more possibilities for working from anywhere, employers need to be especially vigilant about all the resulting off-the-clock work,” she says.

However, technology has also provided new solutions that employers can utilize. “Thanks to modern technology, employers can utilize mobile time tracking software to capture [any] work time,” Philip states. “It cuts both ways.”

Employers must be diligent in explaining to employees the importance of tracking their time. “Employers should have procedures in place either to prohibit such work or to ensure that non-exempt employees are paid for any off the clock work,” explains Staci Rotman. Mobile time tracking software can make time cards more accessible for employees. But they also need to understand the importance of accurately tracking their time, and how to do it.

There are a few options available to employees, with the easiest being a mobile, cloud-based time tracking solution. “The important thing is that the time gets records,” explains Philip, “whether it’s through time tracking software, emailing a ‘note-to-self,’ or even just writing it down on a notepad.” Mobile time tracking allows employees to easily clock in and out, as long as they have internet access and their phone handy. 

Luckily, the FLSA does not require employers to track time in any particular form. Employers are at liberty to choose which form of time tracking is best for them and their teams. The FLSA only requires that records of that time (plus other information such as rate of pay and employee information) are kept for at least three years. 

Choosing which time tracking option is best for you depends on the industry, technology available, and your employee policy, explains Staci. “What matters most is that the employer provides an avenue for employees to accurately keep track of their hours worked and reviews the time records to ensure they are accurate.” 

It depends on the duties and pay rate of the hourly employees, but in many cases hourly employees should never perform work off the clock. 

Hourly employees who make less than $684 a week fall under the non-exempt category of the FLSA. These employees must be paid for all hours worked, and be paid appropriately (time-and-a-half) for any overtime worked. 

Hourly employees who make more than $684 per week ($35,568 annually), or whose job duties classify them as exempt, can occasionally perform duties off the clock. The FLSA does not place requirements on paying exempt employees for all time worked. But you must also ensure their pay and hours worked do not fall below the minimum wage threshold, or they will fall under non-exempt. 

When constructing your off-the-clock policy, be sure to specify to whom the policy applies. Consult your employment counsel if you are unsure if your hourly employees are exempt or non-exempt.

With the recent increase to the overtime threshold, about 1.3 million workers are reclassified as non-exempt under the FLSA. This means businesses should be more diligent than ever about tracking time for employees that make less than $35,568 annually (or $684 per week). Any work performed off-the-clock by non-exempt employees could be seen as wage theft. 

This will also change how non-exempt employees perform their job, Dena notes. “Many of these formerly exempt employees are used to working ‘until the job gets done’ without regard to the number of hours worked. Once an exempt employee is reclassified as non-exempt all of that work time must be reported and paid, including overtime,” she explains. 

For newly reclassified non-exempt managers, the transition might be even more difficult. “The job of a manager is very demanding,” Dena says. “They are often trying to maximize productivity while keeping labor costs down and reducing overtime. [They] may be tempted to take things home and finish work up after clocking out for the day in order to avoid costly overtime. Even if this is well-intentioned, it would be a violation of federal law not to pay them for the extra time worked.” 

The new overtime rule went into effect on January 1, 2020. If your business was not compliant by that time, you may be found liable for violating wage and hour laws. However, there’s no time like the present to make adjustments and improvements to your off-the-clock work policy. Speak with your employment counsel if you have any concerns about your policy or your business’ compliance standing with the FLSA.  

If an employee qualifies as an exempt employee per the FLSA’s guidelines, then the employer may reclassify the employee as exempt. However, if the employee does not qualify and the employer still reclassifies them, then the employer may be found liable for employee misclassification. 

Employers should be cautious to reclassify employees, unless they are certain they qualify. Dena explains there are three requirements for employees to be classified as exempt:

1. The employee is paid based on a predetermined amount (typically a salary amount), and that amount does not change based on the quantity and quality of work. 
2. The employee is paid at or above the salary threshold of $684 per week or $35,568 per year. 
3. The employee’s jobs duties must match the exemptions outlined in the FLSA. For example, the employee must perform primarily “white collar” managerial work, or perform “at-home” care, etc. These job duty exemptions are outlined in Fact Sheet #17A of the FLSA.

Employers can reclassify their employees as exempt if they match these requirements. But it is recommended to do so cautiously. Speak with your employment counsel if you have concerns about your employee’s classification.

DOL audits and lawsuits typically don’t occur unless an employee notifies the DOL of employer misconduct or compliance issues. For off-the-clock work, a single worker or group of employees typically trigger the lawsuits. “When an employee becomes unhappy at work or is terminated, that is when we generally see a lawsuit filed,” explains Staci. 

However, investigations and audits can also happen randomly. As the DOL explains, the Wage and Hour Division (WHD) may show up at a business to conduct an audit at any time. Although WHD is not required to give a notice to businesses, they typically will, according to Fact Sheet #44. If an investigation occurs, the WHD “does not typically disclose the reason…[although] many are initiated by complaints.” The WHD keeps all complaints confidential, including the name of the complainant and the nature of the complaint. They also may not disclose if a complaint exists in the first place. 

Employers can never be sure of when the WHD may stop by for an investigation, or when an employee becomes unhappy and reports the business. Because of this, compliance must always be top-of-mind for business owners, notes Philip. 

Working off the clock can be a serious violation of the FLSA. However, the issue is complicated. There are a lot of nuances to consider and questions that business owners may have. In short, here are some of the biggest takeaways on off-the-clock work and employer compliance: 

• Working off the clock is any work done that does not receive compensation. Non-exempt workers should never work off the clock, as the employer would be found liable of violating the FLSA.
• All employers should create a detailed off-the-clock work policy that explains when employees are expected to work and when they aren’t. 
• Require employees to track their hours worked (both in and out of working hours). Mobile, cloud-based time tracking solutions may be the most useful for employees who occasionally do work away from the office.
• Avoid the risk of an FLSA lawsuit by always paying employees for every minute worked—even after hours.
• The 2019 overtime threshold increase made 1.3 million more American workers eligible for overtime and the non-exempt status. Review your employee’s pay and hours to ensure they’re properly classified. 
• Reclassify employees as exempt at your own risk. It may help eliminate off-the-clock work problems, but it could cause bigger problems with misclassification down the road.
• Focus on achieving compliance now. Don’t wait for an unhappy employee to report your company to the DOL for off-the-clock work complaints.

Staci Ketay Rotman, shareholder at Littler Mendelson PC, advises and represents employers in all aspects of labor and employment law. She represents clients before federal and state courts and administrative agencies, as well as in arbitration proceedings. Staci has experience with class actions, multi-plaintiff litigation, TRO/preliminary injunctions and trials. She uses her litigation experience to counsel employers on how best to achieve their business objectives while minimizing the risks of litigation. She also advises and represents employers on the Fair Labor Standards Act and related state statutes, ranging from worker classification audits to claims alleging unpaid wages. 

Philip K. Miles is an attorney with McQuaide Blasko in State College, Pennsylvania. Since joining the firm, Philip has concentrated his practice on labor and employment law. He and the firm’s labor and employment law team represent clients ranging from individuals to small businesses to large employers with thousands of employees. Miles also publishes a highly regarded independent employment law blog featuring commentary on cases, current events, and other developments in the field of employment law.

Dena H. Sokolow has more than 20 years of experience counseling and defending employers and management on a wide range of labor and employment matters. She partners with her clients (which range from startups to Fortune 500 companies) to best position them to avoid employment law claims or, at a minimum, put the company in the strongest position to defend such claims. She regularly conducts customized audits to ensure compliance with federal and state employment legal requirements (such as wage and hour practices) and conducts management and employee training on a variety of topics that are specifically tailored to each employer’s policies, practices, and particular needs.