Productivity Through Technology: A FLSA Trainwreck

by Michael Haberman on July 10, 2008 · 4 comments


As the gas crunch continues to escalate in the U.S. many companies are trying come up with solutions that help employees deal with the costs. One of these solutions is telecommuting, allowing workers to spend time at home and less time on the road. It is nothing new. This interest in telecommuting has been around for awhile as a way to reduce traffic, part of a corporate social responsibility initiative or as part of a progressive employee relations policy. The gas crunch has just sparked more interest. Plus study after study has shown that most workers are more productive as telecommuters.

So companies issue laptops, Blackberrys or Treos or IPhones, and other mobile devices to make their telecommuting (and traveling) employees productive. And with this come a host of issues that make this move more problematic than most companies would like it to be. These issues include:
  • Security, for both the devices and the information contained on them.
  • Personal use of the devices and privacy expectations
  • Use of these devices by non-exempt employees and payment of overtime.

As we have seen in several news stories about stolen government laptops this is certainly an issue. So you need to have some policy and procedure statement that covers leaving these devices laying about for someone else to pick up. This should probably contain some statement about use in WIFI hotspots and use of a firewall. Get your techies to help on that.

If you issue business devices for business use do you allow personal use of those devices as well? Ideally not, that would make it cleaner to deal with. But that is not practical in the real world. You cannot expect your traveling employees to carry two computers so that they will be able to do personal things at night. If you have employees who are gone all week long they need to communicate with family and the bank and their doctors, etc. But you need to have a policy that does let them know that it is a company owned machine and as a result they should have no expectation of privacy and that all information on the machine is subject to review by the company if it is deemed necessary. This expectation of privacy also needs to apply to company owned phones and texting devices. All of that information is recoverable and employees need to be aware of that fact.

The train wreck I alluded to in the title is with the Fair Labor Standards Act. The FLSA requires that all non-exempt employees (both hourly and salaried non-exempt employees) be paid for time worked more than 40 hours in a week (in some state and local jurisdictions for more than 8 hours in a day). This means if you have a non-exempt employee with a company issued laptop/Blackberry/phone and they are checking email, working on projects, etc. you have to track all their time and then compensate them for the overtime. This can get very complicated, particularly if those devises are used for personal things.

We have learned that it is human nature that when an email pops up it gets read, especially on a Blackberry (that is why they are referred to as a “Crackberry.”) Few of us ignore that late night email or that after-hours call. The law does allow some “de minimus” use that take up insignificant time. However, if that time starts adding up it then becomes compensible. So you need to set up a policy on the use of those devices and recording that time. If it is going to put someone into an overtime situation then you need to have some approval process in place to make sure OT does not run rampent. It is expensive.

This stuff can get so complicated sometimes that it discourages employers from issuing those devices to non-exempt employees. This can create a “digital divide” in our employee groups. So be careful of your reaction to this. The law can be a roadblock to a technologically productive workforce if you let it be. Perhaps it is time for an other overall of the FLSA. But don’t hold your breath. With the influence of unions on the government it is not going to happen.

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{ 4 comments… read them below or add one }

Ann Bares July 10, 2008 at 3:56 pm

Good stuff, Mike! Since I covered related territory yesterday, I have added a follow-up post on my blog today linking back here. Cheers!

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Michael Moore July 11, 2008 at 10:48 am

Companies need to be mindful that the FLSA is a devil’s playground for plaintiff’s employment class action lawyers. The FLSA is anachronistic and ill suited for today’s technology. See John Hyman’s post at the Ohio Employer’s Blog: http://ohioemploymentlaw.blogspot.com/2008/06/is-flsa-

Telecommuting only complicates an existing issue of nonexempt employees “working” through their PDAs and laptops. Unless this work is de minimus, it is compensable time under the FLSA. I wonder how many nonexempt employees really use PDAs and laptops at all. I was thinking of the nonexempt job classes that this might apply to and came up with news reporters, inside sales, and some clerical positions. The solution is a simple one: Don’t give nonexempt employees after hours access to the computer system.

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Michael D. Haberman, SPHR July 11, 2008 at 11:13 am

Good point Michael. I might add a couple more positions. Some companies have customer service people working from home, some HR people, perhaps some level of IT people.

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HR Wench July 12, 2008 at 12:54 am

Another thought: non HR folks that are non-exempt often don’t understand “what the big deal is” when it comes to working off the clock. I’ve had people tell me “Oh, I don’t mind. It’s my choice. It’s not like I would sue the company”, etc.

I’ve found that new hire orientation is a good time to have a heart to heart with non-exempts about how working off the clock is no good and WHY.

The “why” part seems to be the ticket to people understanding things better and complying.

“Yes, I know YOU would never accuse the company of not paying you OT when it didn’t know about the OT but here is the thing: the state (Oregon at least) doesn’t care…they will ding us anyways, even if you say we never knew”.

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