With the COVID-19 pandemic triggering wide-spread restraint on business operations, best practices for all California companies requires particular consideration of how the California Labor Code’s wage, hour, and expense reimbursement requirements still apply to businesses in the remote-working atmosphere as more businesses transition their non-exempt, hourly-paid, employees to performing their job duties remotely from their homes. Companies must be mindful that although this is an unprecedented period, compliance with the California Labor Code remains paramount as more employees adapt to their new working conditions within their home, and with minimal oversight. Companies will have to simultaneously adapt their policies and procedures in novel ways to ensure compliance with pertinent wage and hour laws in this regard.

Here are some helpful recommendations:

1. Overtime Compensation

As companies are aware, in California, non-exempt employees are workers who must be paid a wage on an hourly basis because their job duties do not fall within an overtime exemption. Non-exempt employees are required to be compensated at a higher rate for their overtime hours worked (1.5x, or 2x), with overtime hours meaning the hours worked over eight (8) in a single day, or over forty (40) in a single week. See California Labor Code § 510(a).

In the context of virtual office spaces, employees will be required to complete their regular job duties as best they can within the confines of their homes, most likely using their own phone, computer, and internet connections to work remotely. Because companies are not excused from compliance with the California Labor Code’s wage and hour requirements, employers should consider implementing the following:

Adopt an attendance policy: Consider asking employees to send their supervisors an e-mail confirming their attendance via e-mail each day.

Adopt an Hour-Tracking policy: Because remote employees will be working with minimal oversight and supervision, consider asking employees to track and log their hours worked, recording the time spent on each task performed during the workday and submitting such logs to supervisors via e-mail at the end of each shift.

Certify accuracy of time worked: Consider implementing a policy that requires remote employees to certify in writing the accuracy of their self-reported hour logs so that it is clear that all self-reported hour logs are correct and cannot be contested in the future.

Certify that employees are not working off the clock: Consider implementing a procedure that requires remote employees to certify in writing that he or she will not continue working off the clock. Alternatively, if possible, employers could implement a system where employees are automatically logged out, or locked out, of remote working access after eight (8) consecutive hours worked each day to prevent any remote employees from working overtime without authorization.

2. Meal and Rest Periods

An employer’s duty with respect to meal periods under both Cal. Labor Code §512 (a) and Wage Order No. 5 is fulfilled if it relieves its employees of all duty, relinquishes control over their activities, permits them a reasonable opportunity to take an uninterrupted 30-minute break, without discouragement from doing so. See Brinker Rest. Corp. v. Superior Court, 53 Cal. 4th 1004, 1040-41 (2012). Employers are not obligated to police meal breaks and ensure that no work thereafter is being performed because a bona-fide relief from duty, and the relinquishing of control, satisfies the employer’s obligations to provide meal periods. Id.

As to rest periods, employers are required to provide employees rest breaks in an amount of no less than ten (10) minutes for every four (4) hours worked, during which, the employees are required to be relieved of their duties. See California IWC Wage Order 4. However, like meal periods, employers are not required to police rest breaks to ensure they are actually taken if the employer met its obligations to provide rest breaks as required. See Lopez v. Wendy’s Int’l, Inc., No. CV 11-00275 MMM (JCx), 2011 U.S. Dist. LEXIS 151513, at *15 (C.D. Cal. Sep. 19, 2011).

In the virtual office realm, employers should consider the following recommendations to help ensure that the company maintains compliance with meal and rest period requirements:

Adopt a Meal and Rest Period Tracking System: Employers should consider implementing a tracking system where employees are required to record and self-report when they take their meal and rest breaks. Employers should further require self-reporting of all meal and rest periods to be performed on a daily basis, and can be as simple as asking an employee to send their supervisor an e-mail whenever he or she begins and ends a meal or rest period.

Certify accuracy of self-reported meal and rest periods: Employers should also implement a policy that requires remote employees to certify the accuracy of their meal and rest period logs so that it is also clear that all self-reported meal and rest period logs are correct and cannot be contested in the future.

3. Expense Reimbursements

Employers are required to reimburse employees for “all necessary expenditures or losses incurred by an employee in direct consequence of the discharge of his or her duties, or of his or her obedience to the directions of the employer.” See Cal. Labor Code § 2802. In the virtual office realm, companies should take careful note of what expenses an employee is likely to incur while performing his or her job duties at home.

Adopt a mechanism for tracking and reimbursing expenses which are regularly incurred by teleworking: Employers should note what equipment their employees require to complete their tasks (i.e. cell phones, internet access, etc.), and implement a procedure for reimbursing employees for the costs of using their personal cell phones, home internet service, and etc. during the performance of their job duties.

Adopt a policy which requires employees to request permission to incur any job-related expense: Employers should require employees to submit requests for written authorization to incur an alleged business expense so that the company can verify that such proposed expense is indeed required for the performance of any duties.

Ensure all business expenses can be confirmed and verified by a receipt or invoice: Employers should implement policies which require employees to provide all receipts and invoices upon requesting any reimbursements for business expenses.

If possible, provide the equipment and tools which employees require to perform their duties remotely in order to minimize having to provide reimbursements: Employers who are able to get better company deals on particular equipment required for employees to work remotely could minimize a potentially greater cost to reimburse employees by purchasing such equipment, and loaning the equipment out to employees for the duration of their remote-working periods. This could also help minimize the number of reimbursement requests which could potentially be made by employees.

Navigating a large-scale transition to relying on employees who work remotely can be challenging, but it is not impossible. Above all, communication between employees and their employers will be critical to ensuring the success of business operations during this period.

The COVID-19 pandemic has certainly highlighted the importance of being proactive to buffer the physical and economic impact of this crisis. As always, if you are concerned about how construct or implement the best policies and practices that will match your company’s needs during a transition to operating remotely, counsel on the front lines are here to help.