Thursday, August 25, 2022

The wage and hour implications of employee electronic surveillance

Every now and again I come across a story that make me question how any in-house counsel blessed a workplace policy or practice.

The following story, taken from yesterday's episode of The Daily on the rise of workplace surveillance, is one of those stories.

Carol works as a Vice President for a bank. Like many white-collar employees these days, she's working remotely from her home. Pretty early on in her employment, she begins to notice that her paychecks are light. Then she figures out why.

Every 10 minutes at random points the company took a screenshot of her computer monitor and a photo of her face. The company was using that information to pay Carol (and every other worker) only for the minutes when they appeared be active according to the photos. If, for example, the photo happened to capture Carol during a moment of inactivity (for example, a 30-second interval when she went to get a cup of coffee), it would dock her for the entire 10-minute span. As you can imagine, the digital tracking actually missed a lot of Carol's work, including any work she did offline. She's working, but the company thinks she's not working, and it's going to dock for that any perceived increments of inactivity. 

There are two HUGE Fair Labor Standards Act red flags here.

🚩 Exempt vs. Non-Exempt

First, Carol is a bank vice president. As such, she is almost certainly classified as an exempt employee. The white-collar exemptions require that an exempt employee be salaried. By docking Carol for times of perceived inactivity, it's treating her as an hourly employee. The basic rule of a salary under the FLSA is that it becomes earned in its entirety as soon as the salaried employee works even one minute during any given work week. And that full salary is due and owed no matter how many hours the exempt employee works. If you're docking the exempt employee's salary for minutes not worked (actual or perceived) then you are treating that employee as an hourly employee. And hourly employees are not exempt. Thus, by paying exempt employees in this manner, you are converting them to non-exempt employees and making them overtime eligible. 

🚩 Unlawful Docking for Working Time

For non-exempt employees (those classified as such or converted through improper docking), this practice raises a huge issue as to docking employees for time spent actually working. The standard is simple in statement but difficult in execution — an employee must be paid if the employer knows or should have known that the employee was working. In the example explained above, all the employer knows is that the employee might not be working during the precise moment in time at which the photo is snapped. As to the rest of that 10-minute slice of time? The employer really has no idea when Carol is and isn't working other than that one snapshot of time every 10 minutes. I'll make it simple — unless you have a reasonable reason to believe employees aren't working, they should be paid (including for the de minimus split second of time captured via the screen shot and photo).

Your employees are people, not tagged wildlife. Let's manage them accordingly. Tracking and recording your employees' every move will create a work environment of distrust and apathy. Instead, let's treat all employees like professionals, and address performance-based issues as they arise on a case-by-case basis. And let's make sure they're paid correctly.