By Zheyao Li and Kevin Young

Seyfarth Synopsis: The U.S. DOL has suspended its “continuous workday” rule for employees working from home as a result of COVID-19. This development has important implications for how small businesses may schedule and compensate non-exempt employees working from home due to the pandemic.

The wave of new law, new guidance on that law, and new guidance on that guidance continued rolling on April 1, 2020, when the U.S. Department of Labor issued a “temporary rule” providing further guidance on COVID-19-related issues under authority of the Families First Coronavirus Response Act (“FFCRA”). As part of the new guidance, which will remain in effect until year-end, the DOL declared its “continuous workday rule” to be “inconsistent with the objectives of the FFCRA and CARES Act” with respect to employees who are teleworking during the crisis. Because it was issued under the FFCRA, this new guidance applies to employers with fewer than 500 employees.

Under the DOL’s prior continuous workday guidance, all time between the first and last principal activity of the day is generally considered compensable work time. The continuous workday rule has been relied upon in the past to argue, for example, that otherwise non-compensable commuting time or walking time that occurs after the beginning of the employee’s first principal activity, and before the end of the employee’s last principal activity, is covered under the FLSA.

With its new temporary rule, the DOL has determined that adherence to the continuous workday rule for employees teleworking due to COVID-19 would “undermine the very flexibility in teleworking arrangements that are critical to the FFCRA framework Congress created within the broader national response to COVID-19.”

So what does this mean? Employers who, as a result of COVID-19, allow non-exempt employees to WFH and break their day into chunks of working time, with personal business in between, need not necessarily treat the entire day as compensable under the FLSA. As an example, the DOL describes an employee who, because of COVID-19, is scheduled to work from home 7-9 a.m., 12:30-3 p.m., and 7-9 p.m. That employee would need to be paid for the 7.5 hours actually worked, not the 14 hours between 7 a.m. and 9 p.m.

Beyond the DOL’s example, the temporary suspension of the continuous workday rule also has implications for unscheduled WFH. For example, if that same employee is interrupted at 8:30 p.m. to care for a child, and then returns to finish work from 9 to 9:30 p.m. (while technically off-shift), the employee should still be paid for 7.5 hours, not 8 hours.

One cautionary note: while courts confronted with a continuous workday claim in these sorts of situations should defer to this new DOL guidance, particularly given the exigent circumstances, it is not a certainty that they will. Nevertheless, the new guidance is persuasive and makes good practical sense in the shadow of COVID-19.

Further, although the DOL’s new guidance allows greater flexibility for small businesses in managing WFH arrangements, it also underscores the importance of accurate timekeeping. Employees should continue to stick to a schedule to the extent possible, aided by the option to flexibly schedule as described above. And as before, employees should be expected to accurately record the times they start and stop work. Managers must remain vigilant as greater flexibility may make it easier for employees to work more than intended and at odd hours, or to become lax with timekeeping.

Finally, employers should remain cognizant of state laws regulating compensable time, including state laws with their own continuous workday rule as well as state laws mandating certain meal and rest breaks. The new DOL guidance pertains to the FLSA only and does not override more restrictive state law requirements.

We will continue to monitor and report on significant developments in this period of uncertainty and change. If you have any questions in the meantime, we are here to help.