Compliance Update with Amy K
by Amy Kleinschmit
Chief Compliance Officer

Teleworking Employees

The Department of Labor recently issued a bulletin relating to tracking teleworking employees’ hours of work. This bulletin can be found here and is a good review for your HR/payroll person.

The bulletin discusses the employer’s obligation to track hours actually worked for which the employee was not scheduled as it relates to telework or remote work arrangements. The Fair Labor Standards Act (FLSA) generally requires employers to compensate their employees for all hours worked, including overtime hours. The DOL estimated in 2019 that roughly 24 percent of working Americans performed some work at home on an average day. In response to the COVID-19 pandemic, these arrangements have expanded even further in 2020. It is important to update policy and procedure to reflect telework and remote work arrangements as may be necessary.

As discussed, “an employer is required to pay its employees for all hours worked, including work not requested but suffered or permitted, including work performed at home. See 29 C.F.R. § 785.11-12. If the employer knows or has reason to believe that work is being performed, the time must be counted as hours worked. An employer may have actual or constructive knowledge of additional unscheduled hours worked by their employees, and courts consider whether the employer should have acquired knowledge of such hours worked through reasonable diligence. See Allen v. City of Chicago, 865 F.3d 936, 945 (7th Cir. 2017), cert. denied, 138 S. Ct. 1302 (2018).”

The DOL provides that, “one way an employer may exercise such diligence is by providing a reasonable reporting procedure for nonscheduled time and then compensating employees for all reported hours of work, even hours not requested by the employer. Id. If an employee fails to report unscheduled hours worked through such a procedure, the employer is not required to undergo impractical efforts to investigate further to uncover unreported hours of work and provide compensation for those hours. Id. However, an employer’s time reporting process will not constitute reasonable diligence where the employer either prevents or discourages an employee from accurately reporting the time he or she has worked, and an employee may not waive his or her rights to compensation under the Act. Id. at 939; see also Craig v. Bridges Bros. Trucking LLC, 823 F.3d 382, 388 (6th Cir. 2016).”

“Employers must, as a result, pay for all work they know about, even if they did not ask for the work, even if they did not want the work done, and even if they had a rule against doing the work.” Allen v. City of Chicago, 865 F.3d 936, 938 (7th Cir. 2017) (citations omitted).

InfoSight Highlight – Keeping up With the Guidance!

Previously, we told you about the August FFIEC statement setting forth prudent risk management and consumer protection principles for financial institutions to consider while working with borrowers as initial coronavirus-related loan accommodation periods come to an end and they consider additional accommodations. It outlined several points to consider:

  • Prudent Risk Management Practices
  • Well-Structured and Sustainable Accommodations
  • Consumer Protection
  • Accounting and Regulatory Reporting
  • Internal Control Systems

Having a hard time staying on top of all the guidance and changes being issued by the regulatory agencies? Be sure to check the COVID-19 – Regulatory Relief Measures topic on InfoSight to see a breakdown of rules and regulations by credit union operation. 

As always, CUAD members may contact me Amy Kleinschmit with any compliance related questions.


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