As you may already know, the U.S. Department of Labor’s (“DOL”) salary requirements for the white-collar exemptions under the Fair Labor Standard Act (“FLSA”) will be revised in 2016, making millions of additional employees eligible for overtime protection. However, there is another issue lurking in the shadows, which is whether non-exempt employees who use their smartphones after regular work hours must be paid overtime.

As smartphones and other personal electronic devices become more common, the issue of employees using electronic devices after work hours has become a serious problem for employers.  Take, for example, the class action case of Allen v City of Chicago, which was decided in December 2015 after nearly six years of litigation.

In the Allen case, a police officer sued the City of Chicago for unpaid overtime related to the off-the-clock usage of his smartphone (a BlackBerry).  According to the officer, the police department issued electronic devices and required police officers to respond to work-related emails, text messages and voicemails while off duty.  Although the City had a policy in place to pay overtime for the officers who worked on their smartphones after work, the officers claimed there was an unwritten policy, or uniform culture or belief, that it was not acceptable for officers to turn in time slips for off-duty work performed on their smartphones.

In analyzing the potential liability for overtime, the court first addressed the issue of whether the activities pursued by the police officers on the smartphones constituted compensable “work” under the FLSA.  The court held that, to be compensable under the FLSA, the work must involve “substantial” duties pursued necessarily and primarily as part of a person’s job. Activities that fall below that “murky” standard – “de minimus activities” – don’t require compensation.

The court determined that some, but not all, of the activities performed by the officers on their smartphones after regular work hours were compensable.  What constitutes de minimus (non-compensable) work is not well-defined.  However, the court did provide some guidance. According to the court, the mere act of monitoring smartphones did not constitute an activity compensable under the FLSA, so long as the plaintiffs could still spend their off-duty time primarily for their own benefit without persistent interruptions. The court, citing a case from the Sixth Circuit Court of Appeals (which covers Michigan), also noted that an employer’s requirement that employees carry a radio and respond if necessary did not result in compensatory time under the FLSA, unless monitoring the radio prevented an employee from using the free time for the employee’s own benefit. However, activities such as immediately responding to witness tips or emergency situations, did constitute compensable work.

Despite finding that some activities by the officers were compensable work, the Allen court nevertheless dismissed the case. Again, citing decisions from the Sixth Circuit, the court held that under the FLSA, if an employer establishes a reasonable process for an employee to report uncompensated work time, the employer is not liable for non-payment if the employee fails to follow the established process. However, having such a process in place will not necessarily shield an employer from liability if employees can show an unwritten policy to deny overtime compensation.  Since the court held that the police officers failed to prove that the city knew or had reason to know that the officers were not receiving compensation for any particular period of overtime the officers may have worked, it dismissed the case.  The officers intend to appeal.

The DOL will likely implement new rules related to non-exempt employees’ use of smartphone and other electronic devices outside of normal work hours.  In the interim, employers should take proactive steps toward complying with the impending rules concerning white-collar exemptions and to guard against overtime liability for non-exempt employee use of smartphones outside of work. With respect to the latter, employers should update or implement policies addressing the issue. Two types of policies are needed:

• A wage and hour policy that must say that if employees perform work that is not recorded in the usual way, there is a procedure by which they can report and be paid.  The established procedure must be reasonable.
• A personal electronic device policy that clearly states when employees may and may not use smartphones or other electronic devices. This policy must inform employees that, in the event they use devices for work purposes that are not minimal outside their normal work hours, they must report the time using the procedures set forth in the wage and hour policy.

2016 has arrived, marking the beginning of a year of political transition. While we cannot be certain what the upcoming Presidential election holds for 2017, we can expect to see at least seven employment law trends as we move through this year.

1. Increase in Fair Labor Standards Act (FLSA) initiatives and enforcement

The Department of Labor (DOL) has proposed changes to the thresholds for exempt status, which will increase the number of employees eligible for minimum wage and overtime payments. In addition, technology advances in the workplace are likely to collide with wage and hour laws with the increased use of smartphones and tablet devices by non-exempt employees and the rise of the sharing economy through businesses such as Uber, AirBnB, etc. Finally, the election year likely will bring with it even more emphasis on laws forcing employers to increase the minimum wage and provide for equal pay and paid family/sick leave on a federal, state and local level.

2. Expansion of the National Labor Relations Board’s (NLRB) efforts to increase unionization

2016 will give us the first full year operating under the NLRB’s new speedy election rules, which so far have served unionization well. In addition, in its last year under the Obama administration, we should expect to see other pro-union decisions and initiatives from the NLRB, including the Board’s efforts at increasing the likelihood of joint employer findings and its onslaught against non-union employment policies.

3. Expansion of Equal Employment Opportunity laws to include LGBT protections

The Equal Employment Opportunity Commission (EEOC) has been pushing an agenda to bring LGBT non-discrimination rights up to the level of other protected classes and this should continue in 2016. Expect state and local laws to begin doing the same.

4. Increased focus on employee privacy protection.

Data breaches occurring in recent years have put the spotlight not only on businesses’ protection of their customer data, but also their own employees. In addition to class action litigation being brought, with increasing success, by victims of data breaches, the Federal Trade Commission has begun enforcing its authority over unfair and deceptive trade practices to regulate in the data privacy/security space.

5.  Employer reliance on wellness programs

As health care costs continue to rise, employers have turned to wellness programs to keep a lid on those costs. Here is another place where technology is creating opportunities and issues as employer wellness programs rely more on smartphone apps and wearable devices to spur on improvements in their workforce health. The EEOC also is weighing in as it relates to the incentives that can be offered to employees for participating to ensure that participation is truly voluntary.

6.  Ban the Box.

Expect the Ban the Box movement, which seeks to prevent employers from asking job candidates about prior criminal convictions on their employment application, to gain additional traction throughout the year.

7. Immigration

Expect the 2016 elections to shine a light on federal immigration policy. Though the election year almost certainly won’t be conducive to any immigration legislation, it could provide whoever wins election with enough political capital to push his or her policy through Congress beginning in 2017.

As onrushing technological changes continue to disrupt our society, the concepts of how we work and, more particularly, where we work, are not immune from that disruption. Forbes Magazine reports that 11 percent (8,000 employees) of Xerox’s employees now work remotely 100 percent of the time. At Aetna, as many as 43 percent of its employees telecommute (in some form) while 20,000 Dell employees telecommute. This sector of the workforce will only expand and, like many disruptive technological changes, will challenge how we measure, regulate, and compensate work, requiring reexamination of yardsticks developed when workers clocked in at a factory gate, took a mid-shift meal break, and traveled home at the end of the work day.

“Working remotely” or “telecommuting” has obvious attractions for many employees and employers, often for different reasons, and there will be increasing pressure to expand its scope. But fitting this square peg into the current legal round hole is challenging and, to be successful, requires smart, multi-disciplinary advance planning and, just as important, continuous monitoring and reappraisal. In this first piece of a two-part article, we examine some of the major legal concerns that face employers who are considering, starting, or expanding their offsite workforce.

Developing a Policy Is Essential

Some employers develop telecommuting practices accidentally (e.g., a valued employee relocates with his spouse to another city). Employers should avoid developing a policy with this approach and instead plan ahead, ultimately developing a well-planned program with input from many disciplines such as IT, tax, wage and hour, insurance, ergonomics, privacy, legal, and labor.

There are many reasons for expanding telecommuting: It is viewed as a “benefit” to certain employees; a business advantage to many employers; a defensive measure to retain or attract key or hard-to-attract employees; a means to operate in different locations; and even a cost saving measure. Employers must also remember that the Equal Employment Opportunity Commission argues that, on occasion, working from home must be considered as a reasonable accommodation option, even if the employer has no existing telecommuting program. However, as we have previously noted, federal courts of appeal have concluded that regular, on-site attendance is often an essential function of many jobs and, in those circumstances, an employer is not required to offer the employee the option to work at home.

Jurisdictional Questions Must Be Considered

Some of the preliminary questions surrounding telecommuting challenges involve possible jurisdictional issues. Working remotely may permit the employee’s work location to be in a different state from the employer’s business. It must therefore be determined which state laws will regulate the work and to which state the employee will owe taxes. Moreover, the employer must check if the employee may be working in a state that insists that, because of this activity, the employer must pay state corporate taxes. (At least New Jersey and Virginia make that claim.) Indeed, telecommunication advances permit employees to work remotely from other countries, which introduces a whole other phalanx of additional complications. The employer should check whether local zoning laws or property restrictions inhibit or ban “commercial” activity in the employees’ homes.

Measuring and Regulating the Work

Once the jurisdictional questions have been settled, it is time to work on the nuts and bolts and, for many employers, the most challenging aspect of telecommuting. For non-exempt employees, work is measured and compensated by time – the amount of hours the employee is or is not “at work.” In more traditional contexts, the time an employee spends working is relatively easy to measure and monitor: a supervisor is present to observe; a time clock, or more commonly, an electronic time device, precisely records when the employee is at work and when he is not, and co-workers are present. An employer who wants to rely on more than a telecommuting employee’s say so must get creative and develop technological methods to substitute for the traditional time clock. Indeed, the Department of Labor gives no breaks to an employer and explicitly applies its rules “to work performed away from the premises or the job site, or even at home”; employers must count the time as hours worked “[i]f the employer knows or has reason to believe that the work is being performed.”

In the more heavily regulated states (e.g., California), the employer must ensure that the remote worker “receives” appropriate meal and rest breaks, has the requisite number of days off and enjoys the many other protections afforded employees. Generally, the governing employment laws will be those of the state in which the employee works, not the law where the employer’s business is located. In all situations, employers who require employees to be available such that they are on “standby,” and who “call them back” from standby, must think through the implications of such policies and practices in the context of an employee working from home to ensure they are not exposed to significant back pay claims including class action claims.

These are only some of the issues employers must navigate when assessing the increasing need to address telecommuting.

Ohio law has long held that an employee’s particular health conditions, personal frailties and peculiar susceptibilities do not prohibit the employee from having a compensable work injury when the injury occurred in the course of and arising out of the employee’s employment. Ohio courts do not deny an employee a compensable claim merely because the employee’s physical fitness at the time of the work incident rendered him more susceptible to the injury than an otherwise healthy individual.

Recently, an Ohio employer questioned the compensability of a workers’ compensation claim when an employee with pre-existing arthritis suffered a subsequent work-related injury. In Luettke v. Autoneum N. Am., Inc.,, the Sixth Appellate District found the injured worker sustained a compensable injury. In October 2006, Ruth Luettke (“Luettke”) fractured her left leg in a work-related fall. An MRI of her left knee demonstrated osteoarthritis. Thereafter, Luettke complained of occasional pain, but continued to work full duty. In August 2012, Luettke alleged that while holding a pry bar to open a dock plate, she put her weight on her left foot, turned and felt a snap in her left knee.  She sought to have a workers’ compensation claim recognized for the conditions of sprain of the left knee and tear of her quad tendon.   Both Luettke’s physician and the employer’s examining physician opined that Luettke suffered from pre-existing arthritis and that Luettke’s injury would not have occurred in an otherwise healthy individual. The Industrial Commission recognized the claim and the employer appealed to court.

The employer opposed the claim, contending that Luettke’s injuries occurred primarily as a result of the pre-existing natural deterioration of the weakened condition of her leg and knee. In Ohio, the definition of an “injury” does not include an injury caused primarily by the natural deterioration of a part of the body.

In addition, the employer argued that Luettke failed to eliminate her pre-existing left knee weakness as a cause of her alleged left knee injuries. The Ohio Supreme Court has previously held that in cases involving unexplained falls, the injured worker has the burden of proof of eliminating idiopathic causes. Idiopathic injuries are an employee’s pre-existing physical weakness or disease which contributes to the work incident. Although the Supreme Court’s ruling relates specifically to unexplained falls, many appellate courts have expanded this doctrine and applied the burden of eliminating idiopathic causes to claims involving pre-existing conditions in mechanisms of injuries other than unexplained falls. The Sixth Appellate District Court concluded that every health-impaired injured worker who seeks compensation for a subsequent injury to the same body part need not eliminate the pre-existing condition as a cause of the injury. In this case, the court held that the fact that the force of twisting would not have resulted in a torn tendon to a healthy individual or to Luettke in the absence of her pre-existing arthritis did not make her injury unexplained.

The Sixth Appellate District Court held that workers’ compensation law does not require all employees to meet a certain level of physical fitness. Further, the court held that even a health-impaired employee is entitled to compensation for an injury subsequent to a pre-existing condition occurring in the course and scope of employment, even if the same action would not have injured an otherwise healthy employee. Overall, the court found that Luettke sustained a compensable injury and that her injuries were caused by her specific work-related exertion.

Employers should remember that Ohio law remains that employers take their employees as they find them, whether healthy or with pre-existing conditions. The best way to avoid workers’ compensation claims is to provide a safe work environment for all employees.