Overtime Rules For Employees Who Work From Home
Overtime Rules For Employees Who Work From Home

Overtime Rules For Employees Who Work From Home

Working from home is the new reality for millions of employees across America, and it might be a while till the entire workforce will be able to get back to the office. More than a third of workers who used to commute are now working from home, according a recent survey.

Among the many new challenges SMB leaders face is keeping track of the hours their employees work at home and understanding what mandatory WFH policies mean for calculating overtime.

Read 5 Ways to Make Remote Work Successful.

Exempt Employees

If you only have exempt employees, relax—the rules for exempt employees are unchanged. As a reminder, that requires:

  • For most exempt categories, a minimum salary of $684 per week or $35,568 annually
  • Highly compensated employees must earn a minimum of $684 per week and $107,432 annually
  • Nondiscretionary bonuses and incentive payments can make up 10% of these amounts (For more details, read our New DOL Overtime Rules: FAQs)

If an employee was exempt while working at the office, they’ll still be exempt now and so businesses don’t need to calculate the number of hours they work. However, moving to remote work can be a challenge for anyone. Managers and HR leaders should make expectations clear.

Inform employees of best practices for working from home and encourage them to set their own boundaries to encourage work-life balance (like actually unplugging at the end of the day). Increased productivity is great, but long term these sorts of behaviors put employees at risk of burnout.

Non-Exempt Employees

The good news, the rules also stay the same: the Department of Labor demands that non-exempt employees must be paid an overtime rate at least 1.5x their regular rate for any hours worked in excess of 40 hours per week—wherever an employee works. Remember to also be aware of any state-specific overtime laws.

However, things get a lot more challenging when calculating overtime for non-exempt employees who work from home. In the workplace, it can be relatively easy to track who is working and when (though work completed during an employee’s commute, which should be counted, is a common source of confusion). How should it work for remote employees?

Sticking to Work Schedules

Just like exempt employees, non-exempt workers might find it tricky to separate professional and personal life when working from home. However, there can be no “grey areas” allowed—either work is tracked (and compensated) or it isn’t.

The easiest way to ensure this is for employees to work their regularly scheduled hours, or as close to it as possible. Employers should be clear about whether employees are allowed to work overtime, and how much. If employees work overtime despite being instructed not to, they must still be compensated—but this can be grounds for termination.

Tracking Working Time

The simplest way to track the hours employees work is to use a software solution. Employees can log in and out—or rather, clock in and out. Have employees sign an agreement acknowledging that they will only work when clocked in and that they will clock out for meal times and any other breaks.

Ideally, this will be part of a company-wide WFH policy. Employers should remember that mandatory breaks and rest times don’t just apply in the workplace—they must be included wherever employees work.

How Paycor Can Help

Paycor Time & Attendance allows employees to clock in and out through a web-based solution or Paycor Mobile. SMBs leaders can track overtime and collect reliable timesheets for payroll. To learn more, talk a member of our sales team.

Get In Touch

More to Discover

Employee Safety During COVID-19: Compliance Toolkit

Employee Safety During COVID-19: Compliance Toolkit

Vaccines are coming to the rescue, but we’re not out of the woods yet. HR leaders can’t afford to take their eye off the ball when it comes to employee safety and compliance. Now’s the time to think about creating a vaccine policy that works for your organization, and it’s not too late to implement workplace testing. If an employee does test positive for COVID-19, you’ll want to make sure you’re ready to offer the right information and support to your whole team. Paycor is offering this free compliance toolkit, including customizable letter templates to use when you: Create a mandatory vaccine policy Implement workplace testing Inform your team that an employee has tested positive for COVID-19

Demotion Letter Template

Demotion Letter Template

There’s nothing better than seeing employees thrive, but setbacks and slips in performance do happen. One way to address performance problems is a demotion. Sometimes, it’s necessary to take a step back before you can take two steps forward. Download Demotion Letter Template When is a Demotion Necessary? In an ideal world, there wouldn’t be demotions. They are a sign something’s wrong: it could be that an employee has failed to respond to a performance improvement plan or they could just be disengaged. A demotion is the last stop before termination. If you believe the person has potential and is worth investing in, then a demotion might be the best way forward. Demotions are risky, though. You could end up with an employee who is even...

Maximum PTO Accrual Letter

Maximum PTO Accrual Letter

Encouraging employees to use their vacation days can feel strange. After all, nobody wants to leave themselves under-staffed and the rest of their team over-worked. On the other hand, what if employees rarely ever, or even never, take time off? That’s been a question facing business owners this year, as vacation plans were delayed, then cancelled, and PTO built up like never before.One problem is, PTO payout laws can turn unused PTO into an unwanted financial liability. There’s also a risk of schedule chaos down the line as everyone tries to use their days up at once. Most worrying of all is that employees who go too long without a break, even by choice, risk ending up disengaged and burned out. Download Sample Maximum PTO Accrual Letter...

How Long to Keep Payroll Records

How Long to Keep Payroll Records

Running a business, you know that compliance isn’t just about being compliant—you also need to prove it. You never know when the IRS, the DOL or the EEOC will demand to see your paperwork, which is why it’s so important to retain payroll records. To make things more complicated, each agency has its own rules for which documents you have to keep and for how long. The good news is, you don’t have to buy more filing cabinets. HR software can automatically store everything you need, with the added benefit of simplifying the whole payroll process. Why You Need to Retain Payroll Records At a federal level, you’re keeping payroll records primarily for three agencies: The IRS The Department of Labor (Wage and Hour Division) The EEOC These...