UNITED STATES EMPLOYER’S ISSUES DURING COVID-19 PANDEMIC
By Kelly Schoening Holden, Dressman Benzinger LaVelle psc
Many of the 50 states in the United States have taken drastic measures to curb the spread of COVID-19 including shutting down non-essential businesses such as restaurants, bars, clothing stores, car dealerships; ordering residents to stay at home unless they are going out for essentials such as food and medicine. In many aspects, businesses have been completely or partially shut down. These measures also include attempts to preserve personal protective equipment (PPE) for those individuals affected by COVID-19 and the healthcare workers. This includes closing of dental and optometry offices as well as a ban on elective surgeries. This has had a cascading effect and over 3 million US workers applied for unemployment benefits in the past two weeks. This is the highest unemployment in history.
Due to the closures, employers are having to layoff, terminate or furlough staff during the mandated isolation. This raises many issues and questions about the proper handling of these decisions. Below is a summary of some of the issues that employers are grappling with.
HOW TO HANDLE REDUCED NEED FOR STAFF – FURLOUGH VS. TERMINATION
Employers are considering all the options including reduced hours, reduced pay and staggering workforce so that staff work one week but not the next. They are also considering furloughs or terminations (as a last resort). Wise employers are asking for voluntary layoffs for employees who want to or can do so. The difference between a furlough and layoff/termination, is that a furlough is a temporary layoff and the expectation is that the employee will be returned to his/her position once the need for their services returns. Also, in a furlough employers may be able to maintain all benefits and have the employee continue to pay their share of the health insurance premiums. The Department of Labor is issuing guidance on a daily basis to assist employers with these issues. www.dol.gov
FAMILY AND MEDICAL LEAVE
There is a federal Family and Medical Leave Act (“FMLA”) that provides for up to 12 weeks of unpaid leave for workers who have a serious health condition or to care for certain family members with a serious health condition. If an employee is out on FMLA leave but the job has been eliminated or furloughed, the employer may include the employee on FMLA in this layoff.
REDUCING HOURS AND PAY – SALARIED VS. HOURLY EMPLOYEES
There is a significant difference when cutting pay for salaried/exempt and hourly/non-exempt employees. Employers can cut the pay or hours of hourly workers pay as needed with no concerns from a legal standpoint.
However, if a salaried employee does any work in a given week, that employee is entitled to be paid for the entire week. There are a few exceptions. For example, if the employee requests an entire day off work and performs no work, employers can require them to utilize paid leave to make up for that day of missed work. Additionally, employers may reduce the salary of a salaried employee (implement a pay cut) for reduced work so long as the salary is not reduced below the required minimum of $684 per week to retain salaried/exempt status.
Likewise, a salaried exempt employee may be converted to an hourly/non-exempt employee. In this case, however, the converted employee will then be entitled to overtime pay if he or she works more than 40 hours in a week and must track all hours worked.
If an employee has a contract of employment and changes are made to the work or pay, the contract should be amended to avoid a breach of contract action.
Many employers have had to adjust the type of work that is done by employees due to remote work as well as change in business caused by the pandemic. Employers can adjust work duties and mandate that employees due work that is needed. If the employer is union and has a collective bargaining agreement (“CBA”), the employer may need to work with a union representative. Absent a CBA or contract, if an employee is at-will, duties can be changed. For salaried individuals, there is a job duties requirement and some duties are not considered salaried-exempt but to temporarily change such duties is not a concern in this situation.
Many states have made changes to their unemployment compensation systems to address the mass layoffs and terminations occurring. Numerous states have waived the waiting period for receipt of pay so that employees are immediately eligible for benefits. States have also waived the requirement that an employee must be actively looking for work to qualify for benefits. Additionally, many states have an insurance fund that is funded by employers and rates can vary depending on the number of claims. States are waiving this requirement as well.
The U.S. federal government is working on legislation to supplement states unemployment compensation funds and provide additional benefits to employees who are now unemployed as a result of this crisis.
Employees and employers should also be aware that if an employee has had their hours reduced, the employee may still be eligible for unemployment benefits for the reduced hours.
Many states are changing the application processes to handle the sudden influx of applications. For example, many have shuttered their offices and applications must be online or via fax. Some states are even staggering what days an employee may apply according to the first letter of their last name.
CHECKING TEMPERATURES OF EMPLOYEES
For employees who are still physically reporting to work, employers are strongly encouraged to take temperatures at least once, if not twice per day. This is particularly true with healthcare workers. The Equal Employment Opportunity Commission has waived the normal requirements for performing such a “medical exam” in this pandemic. See EEOC guidance for details on ADA and health issues related to employees during this crisis:
Additionally, workers are to remote if they are feeling ill and coworkers may be informed that an employee has symptoms of COVID-19 to further reduce spread. The ill employee must self-isolate for up to 14 days and in some cases, so must coworkers.
REFUSAL TO WORK
For employees who cannot work remotely, some employees are refusing to do so for fear of contamination. In this situation, employees are not eligible for sick leave and should be considered either a voluntary resignation or voluntary furlough. This poses a significant problem for those employees who are still working with the public and are taking risks so many employers are choosing to have the employee resign rather than be on a leave status. Employers also cannot mandate workers that they consider high risk (elderly, pregnant, those with health conditions) stay home because to do so is unlawful discrimination.
Many states have enacted orders mandating social distancing guidelines such as retail groceries or restaurants doing carry-out to mark a 6 foot distance while customers wait. They are also required to provide sanitizing wipes and protective equipment for employees. The Occupational Safety and Health Administration has issued guidelines in addition to some state’s guidelines. www.osha.gov. These measures have been taken to protect workers and the general public.
Many states have mandated that workers work remotely instead of reporting to work. This can cause challenges for employees who do not have such capability. If an employee does not have Internet access and cannot work remotely, the employer can but is not mandated to take whatever steps to assist. If the work cannot be done remotely and the business may not operate, the employee should be temporarily furloughed. The US Government is asking employers to be flexible with employees and to keep them working remotely, if at all possible.
Each state has its own set of unique laws so employers need to be mindful of federal and state employment laws in addition to the state mandates that are related to COVID-19. This pandemic is raising new issues that each state and the federal government are addressing as quickly as possible.
Kelly HoldenGGI member firm
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Dressman Benzinger LaVelle psc (DBL Law) provides a complete range of services to meet legal needs in a wide variety of industries. With cross industry collaboration, their attorneys offer comprehensive service on complex matters that transcend simple categorisation in many areas of law.
Kelly Holden heads DBL Law’s Employment Law practice, representing private and public employers in employment-law matters. Kelly advises clients and conducts training on employment compliance, including drafting of employment and noncompete agreements, employee handbooks, and employment policies.
Published: COVID 19: Labour Law Implications in different jurisdictions, March 2020