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The Dangers of OTC Work

Two years ago, these words were seldom used in the business context – remote workers, hybrid schedule, and essential workers. Now they are the norm. During the pandemic, many employers have embraced telework opportunities for their workforce. While surveys consistently report that many employees favor the flexibility that telework and hybrid work offers them, telework has potential issues for employers, one of which is regulating “off-the-clock” work (“OTC Work”) of their non-exempt employees.

What is OTC Work?

The name says it all. OTC Work occurs when a non-exempt employee performs work and fails to record their time. Some examples include working during “off hours,” working during an unpaid meal period, completing work before clocking in or after clocking out, and answering work related phone calls, emails, or text messages while not clocked in.

Underreporting time may be intentional or unintentional. For instance, some employees perform OTC work intentionally to catch up on work or to finish time-consuming projects in a timely fashion. On the other hand, some employees simply forget to clock in or out. This is especially true in the remote work environment.

In a traditional employment setting, it is easier to monitor OTC work. Employers can require employees to take breaks and lunches outside of their work areas, limit employees’ remote access to email and telephone, prohibit employees from taking work home, and other such measures. However, this becomes much more difficult in a remote and hybrid work environment as company policies are more difficult to enforce and some employees are not maintaining set work schedules.

Employers’ Responsibility as to OTC Work

The FLSA is clear—employers must pay employees for all their time spent engaging in compensable activities. The FLSA, however, does not require employers to pay for work they do not know or have no reason to know about. Instead, the DOL charges employers with actual or constructive knowledge a reasonably diligent employer should have acquired. Employers are also supposed to provide training to employees on how to report any OTC Work.

Employers need to make every attempt to monitor OTC work and prevent such work from occurring. This includes having a clearly written policy forbidding OTC work. Having such a policy on its own, however, is not enough. Instead, employers are tasked with making every effort to enforce the rule. Employers should train managers and supervisors relative to OTC work and discourage them from communicating with non-exempt employees using any method other than company approved communication channels. The policy should list what those communication channels are as well as allowed text and/or phone communications on mobile devices. The policy should have clear steps an employee must take to report overtime work and to seek approval for overtime in advance.

Employers should also enforce their OTC policies and discipline employees who fail to comply. While there are no mandates that employers take impractical steps to verify hours worked by cross-referencing time slips with emails and calls, employers want to take every step to ensure OTC is not happening. Employers should seek legal counsel to review their policies and practices with respect to OTC Work. Otherwise, they run the risk of an expensive overtime lawsuit, including an audit from the U.S. Department of Labor.

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