Key Wage and Hour Issues for Employers with Remote Employees

Key Wage and Hour Issues for Employers with Remote Employees post thumbnail

Do you have business clients with employees that are working remotely? If yes, then it is important for these clients to understand what their legal obligations are regarding laws that govern remote workers to help mitigate potential risks. An issue of particular importance involves wages and hours.

Key wage and hour challenges facing employers who have employees that work off premises include the outside sales exemption and compensating employees for unauthorized work.  

The outside sales exemption

The outside sales exemption excludes outside salespeople from certain wage and hour laws that apply to non-exempt hourly workers, such as minimum wage, overtime pay and rest/meal breaks. This includes employees who regularly work more than one-half their working hours out of the office who sell or obtain orders for products and services.

Your employer clients must know the outside sales exemption law in their state as outlined by the Fair Labor Standards Act and how to properly classify and compensate employees. Failing to do so could result in wage/hour lawsuits.  

Payment for unauthorized remote work

Regulations set forth by the U.S. Department of Labor require an employer to pay their employees for all the hours that they work – whether or not requested or permitted, or if those hours were worked remotely or from home. (LexisNexis.)  An employer that knows or should have known of the work being performed by an employee, whether scheduled or not, must compensate the worker for their time.

According to LexisNexis, it is the employer’s burden to exercise control to prevent work from being performed when it is not desired, and that management must make every effort to enforce the rules. But how do employers go about tracking an employee’s time and preventing them from working unauthorized hours when working remotely?

One suggestion would be to establish a process for employees to report any uncompensated work time to their employer. Should an employee fail to report hours worked under these established procedures, the Fair Labor Standards Act will not require the employer to compensate an employee for “work the business didn’t’ know about and had no reason to know about.” ( In addition, employers should also communicate in writing that any unauthorized or overtime work that is performed remotely is strictly prohibited.

With so many workplace changes and updates to employment-related laws, it will become increasingly critical for your employer clients need to stay informed to better minimize risks associated with remote work.

About FastrackCE

FastrackCE can help insurance professionals get their life, health, and property and casualty continuing education credits done in one place and at their convenience. We offer online insurance continuing education courses in most states, covering a broad range of topics including most of the state-mandated courses such as in ethics, flood, long-term care and annuity training.

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