Legal Risks and Benefits of Technology

This article accompanies Small-Screen Wonders

Thursday, September 16, 2010
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From a business perspective, it's easy to see the advantages of providing employees with the latest mobile-device technology to keep them connected and increase productivity. However, there are legal risks that employers should carefully consider before doling out the newest device to their workforce.

Specifically, employers should avoid providing nonexempt (hourly) employees with mobile devices and they should clearly communicate company policies regarding usage.

The Fair Labor Standards Act mandates that all hours worked by nonexempt employees be recorded. Mobile-device usage blurs the line as to when an employee is on the clock. If a nonexempt employee checks an e-mail during the commute to work, is this compensable time?

What complicates matters are the strict guidelines the FLSA lays out for classifying employees. The act of classification is not straightforward and, in fact, employee-misclassification lawsuits have seen a radical upswing. This trend is sure to continue. The Department of Labor has earmarked $12 million in the 2011 budget for increased personnel to investigate and enforce misclassification cases.

While it's best not to provide nonexempt employees with mobile devices, there are jobs that may justify it. For example, construction workers at different locations need to stay in contact with headquarters; event planners travel to several locations and meet with clients at various sites.

In these instances, companies may choose to provide their hourly employees with cell phones or PDAs.

When mobile devices are provided, the employer should also consider implementing an advanced labor-management system to integrate with the mobile device. With this type of system in place, the employee can use the device as a data-collection tool that feeds directly into the company's software.

In addition to allowing employees to "clock in" and "clock out" with the device, many labor-management systems also allow employees to view accrual balances, allocate hours worked and track expenses, such as mileage using GPS technology.

Indeed, collecting data such as attendance records, production costs and expenses is a good idea for all employees, not just nonexempt ones.

Organizations that choose to invest in labor-management systems and data-collection tools will have more accurate and complete records. In the event an employee classified as exempt is found to be misclassified, the employer's thorough documentation may mitigate damages and back pay should the employer be found liable.

Regardless of the classification issue, however, all employees issued mobile devices need to realize the risks of such usage, and HR leaders should draft clear company rules and procedures to be followed by all employees.

In addition to the company handbook, employers should have an "acknowledgement and acceptance" form signed by each individual who is provided a device.

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Depending on individual company needs, examples of company policies regarding the use of mobile devices could include:

* Prohibited Usage (operating motor vehicles, during meetings, etc.);

* Privacy;

* Personal versus Company Usage;

* Standard of Care (maintenance, lost devices, etc.); and

* Complaint and Disciplinary Procedures.

In this ultra-competitive 21st century, employers are using every tactic to stay ahead. Oftentimes, the biggest advantage is keeping the workforce connected.

However, employees who are not exempted from the FLSA must be compensated for all hours worked -- which includes time spent using mobile devices before or after normal working hours.

HR leaders need to strictly analyze each employee's job duties, determine if there is an actual need for a mobile device and carefully implement policies regulating the workforce to remain in compliance with legal requirements.

Somer V. Jefferiss, Esq., PHR is a legal and labor consultant with Datamatics Management Services, Inc., and can be contacted at

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