Employment law is an odd twentieth-century beast that doesn’t quite fit with the new nature of work, especially for small businesses. Your employees may be acting more and more like independent contractors — working from home, popping into the office on Saturday morning, putting in extra after-hours work without being asked, and answering e-mails on vacation. What about that summer intern who puts in 50 hours a week for free?
The concept of being “at work” is getting fuzzier by the minute, and it has significant implications for overtime, workers’ compensation, tort liability and the duty to provide a safe workplace. Those risks may be part of the price of a talented and engaged workforce. There is a lot that isn’t clear yet, but before we devolve into total confusion, let’s put down some markers on what we do know.
After-Hours Work that Exceeds the Overtime Threshold
The Fair Labor Standards Act requires that employers pay non-exempt employees at time-and-a-half for weekly hours above 40. This applies whether or not you asked the employee to work those hours, just as long as you know about them. If you don’t want to pay them at this rate, you must prohibit them from working the extra hours. Just to be completely counter-intuitive, you may have to threaten to fire an employee for working too much.
The first question, however, is whether this very independent worker is really an employee. Depending on the amount of control you exercise over how and when the worker works, this person may actually be an independent contractor, for whom you do not have to pay overtime. The second question is whether this individual is exempt from coverage under FLSA. Most higher-paid employees including executive and administrative workers — the ones most likely to rack up those extra hours– are exempt from the overtime provisions.
You should be aware that state overtime rules, although never less generous to employees than the federal rules, may be different. California, for example, sets a daily, rather than a weekly overtime threshold.
Your Employee Gets Hurt
Admittedly, he was on a pleasant Caribbean beach, but he was also on the phone with you, discussing business. You called him. Whether his injuries will be covered by your workers’ compensation policy will depend on state-specific rules. If you do business in Texas, and you have opted out of the workers’ compensation system, you may be looking at some real liability.
In general, employers also have a duty to provide employees with a safe workplace. The law in this area is developing very rapidly, so this is an area you may want to watch. Our beach example may seem a little far-fetched, but imagine the problems that could ensue if, for instance, the light bulb in the stairway of your office space burns out on Friday at 3 pm and is not immediately replaced. You know that your employee often comes in on Saturday. Employee comes to work, falls down the stairs and breaks a leg. This could be an issue, and although the employee/independent contractor distinction remains important, the exempt/non-exempt question is irrelevant.
What if Your Employee Hurts Someone Else?
Occasionally legal language becomes weirdly playful, and the distinction between a “frolic” and a “detour” is one of those spots. It’s a matter of degree.
- An employer is generally liable for the harm committed by an employee in the course of employment. If an employee of your hardware store drops a bag of cement on a customer, breaking the customer’s foot, your hardware store will probably be on the hook.
- If you are a florist, direct your employee to deliver flowers in the van, your employee stops for gas on the way back to the shop and rear-ends another vehicle at the gas station, that’s likely a detour and you are probably liable.
- If your employee delivers the flowers, then goes off for a long liquid lunch with her boyfriend and, two hours later rear-ends another vehicle at the same gas station, that’s probably a frolic, and you may not be liable.
Applying these general principles to after-hours work, work from home and vacation work should make your head hurt.
So, What to Do?
Well, the fallback advice is to consult a lawyer, but presumably you want to do a little self-help first. The first step would be to seriously limit the number of your employees who are involved in after-hours work. You may be able to reduce your potential liability by reducing the number of employees who have keys or who phone in from home or vacation. With respect to those who have this opportunity, it is important to be informed of when they are working and under what conditions. As nice as it may be to get the benefit of extra work, sometimes you have to say no. And, unless you really have to, don’t call them at home or on vacation.
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