The rapid transition of many employees to a remote working environment due to COVID-19 presents challenges for maintaining compliance with wage and hour laws. One such challenge involves creating accurate and precise records of hours worked for remote hourly employees. And a commonly cited strategy for promoting compliance is to develop policies to communicate timekeeping expectations to remote employees. However, the effectiveness of this strategy is not entirely clear.
Experts in BRG’s Labor and Employment practice recently conducted an empirical study of nearly 800 remote hourly employees across the United States to examine their compliance with wage and hour laws in a remote work environment. The results provide insight into the degree of employees’ compliance with specific timekeeping practices and into the organizational and individual employee attributes that contribute to wage and hour compliance.
Compliance Through Clarity
Clear timekeeping policies have been emphasized as an important factor in managing employee compliance. And sure enough, the findings from the study support this assertion: Employees reported that most employers have remote-work timekeeping policies in place, and that these policies have been communicated to them.
In addition, more than 75% of employees feel that their company’s communications regarding remote-work timekeeping policies have been clear. Likely due to these communication efforts, approximately 80% of respondents indicated that they know their company’s remote timekeeping policies, understand the policies, and know their timekeeping responsibilities.
Even more compelling is the finding that clear company policy is statistically related to aspects of compliance. In particular, clarity of policy has the strongest impact on whether employees report certain activities as compensable.
For example, employees in companies with clear policies are more likely to report time spent on typically compensable activities, such as sending and receiving emails and instant messages to and from coworkers. They’re also less likely to report time spent on typically noncompensable activities, such as getting dressed or eating breakfast.
These results indicate that company policies can play an important role in helping employees properly define compensable and noncompensable activities. Of the organizational factors studied, company policy clarity has the strongest effect on compliance.
But Challenges Continue
Despite employer efforts to communicate timekeeping policies and the employees’ assertion that they understand these policies, approximately half of respondents reported they never or sometimes record time for computer boot-up and shutdown at the beginnings and ends of their workdays.
Similarly, more than 35% reported they never or sometimes record time spent on text messages with coworkers before or after the workdays. Additionally, more than 25% of respondents reported they never or sometimes record time spent on work-related instant messages and chats, as well as reading and responding to work-related emails before or after the workdays.
Based on these findings, employers may benefit from a review of their remote timekeeping policies, specifically with respect to activities performed outside of normal working hours. Doing so can help ensure that the policy language is clear and unambiguous, given its importance in maintaining compliance and minimizing legal risk.
Personality Plays a Part
Aside from company policies, individual employee personality characteristics also play a role in how employees report time. The study found that among factors studied, employee self-discipline was one of the strongest characteristics influencing compliance. Specifically, employees with higher levels of self-discipline are more likely to report their time more precisely at the beginnings and ends of the workdays and are less likely to report both typically compensable activities and typically noncompensable activities.
While self-discipline typically is viewed as a positive trait, in this context, individuals with high self-discipline appear to be more likely to underreport hours worked.
Ultimately, it will behoove employers to review their policies and ensure that they are clearly communicating them to ensure compliance with wage and hour laws.
The views and opinions expressed in this article are those of the authors and do not necessarily reflect the opinions, position, or policy of Berkeley Research Group, LLC or its other employees and affiliates.