Coronavirus (COVID-19) has us all scrambling with work, with family, and with our sanity. We all know the news changes daily (as do the closures and emergency legislation), but we have put together guidance on some common questions we’ve been hearing from clients. Please treat this as a general resource only—these decisions are often fact-specific and the laws might be changed by the time you read this!! This is a mix of legal and our best-guess practical advice. Bear with us as we try to answer novel questions in unusual circumstances. Although (like many of you) our physical office may not be open today, the Shulman Rogers Employment and Labor Law Group is hard at work and available for phone calls/emails if you have further questions.
If the business is still open and employees are working on-site
Information is key. Keep your employees advised regarding status, options and precautions required and taken.
If your business is open and your employees refuse certain tasks (travel, high-risk contact duties, or even to come in due to family obligations, societal risk, or just plain fear), keep in mind that employees may have protections under laws like:
• Disability laws (the coronavirus may not constitute a disability, but if the employee has an underlying health condition, an accommodation may be legally mandated);
• The NLRA, which entitles non-managerial employees the right to take concerted action to impact the terms and conditions of employment — meaning employees can protest or strike against what they think are unsafe work conditions;
• OSHA, which regulates workplace safety; and,
• Paid sick leave and parental leave laws. Schools are closed. We are in uncharted territory. But it’s not impossible that a court would say that employees are entitled to use paid sick leave to care for kids who are home from school because of a virus, even if their own child does not have the virus.
If the business is still open and employees are working remotely
Be mindful of wage/hour issues. This is similar to a snow day—if your hourly employees cannot work from home, you do not have to pay them (although, as described throughout, you might have to allow them to use accrued paid sick/safe or parental leave). But, if your exempt employees cannot work from home, and you are telling them they cannot come into work, you may have to pay them UNLESS you are telling the exempt employees not to work for the entire workweek. This is complicated and you can easily make costly mistakes. Please call your lawyer if you have questions.
We have also been asked about bringing equipment home, workers compensation for injuries sustained at home and whether employers can monitor productivity.
• On equipment, best bet is to have the employee sign an agreement itemizing what equipment they are bringing home and obligating them to return the equipment or risk a paycheck deduction for its value. Even if they signed something earlier, or you have something in your handbook—our advice is to get something signed now for anything that goes home.
• On injuries, if the injury is sustained at work, it does not matter if the work was conducted at home. In better times we can help you prepare telework agreements that limit the chance for injury. But if you do not already have anything in place and do not have time to get something drafted, all is not lost. Workers compensation is insurance and it is there for emergency situations just like this.
• On monitoring productivity- yes, working from home does not equal no work obligation. Your handbook (or telework agreements) might specify what rights the employer has to monitor work remotely. Regardless, the regular rules apply. Outline your expectations regarding hours of work, time for response, etc. If the employee fails to meet those expectations let the employee know the problem, what needs to be done to solve the problem and consequences for failure to fix. Compassion may be appropriate – but that might look like leave instead of termination of employment.
The bottom line is we all have to have a little faith and trust in each other, and we will have to do our best in these trying times.
If you need to furlough employees
If work has slowed and you need to furlough employees, you need to be mindful of wage issues such as FLSA status and accrued leave obligations.
If your employees are paid on an hourly basis, you typically only need to pay for hours worked. This means you can implement a reduced work-week schedule (shortened days, or less than 5-days a week) as a way to reduce payroll obligations.
If your employees are paid on a salary basis, you can only implement FULL WORKWEEK furloughs. The law does not allow you to maintain the FLSA exemption if you reduce a salaried employee’s compensation in any workweek in which the employee performs any work. (And for you complicated employers who pay some employees on a salaried, non-exempt basis… this applies to you too!) This means both that the salaried employee has to be out for the full week AND that the employee cannot perform any work (checking emails, phone calls, etc.) during that week. If the employee performs work, s/he may have the right to compensation for the entire workweek.
What about health insurance? Bottom line—you need to check your plans. Most plans will cover the employee through the end of the month in which s/he last performs work, but it is absolutely contract (plan) specific. After that, once the employee becomes inactive as defined by your plan, the employee will be eligible for federal COBRA if you have 20 or more employees. But there are state COBRA laws too that might be triggered for smaller employers.
And then there is the question of paid leave. If the employee is furloughed, you may have to allow the employee to use accrued sick leave if the employee or a family member is sick, and/or if your employees work in a state/city/county that has passed paid sick/safe leave laws. Things get more complicated if you have a Paid Time Off (PTO) policy instead of separate sick and vacation leave buckets. It is an open question on whether you have to allow paid sick leave to care for a child home from school because of a virus, even if the child does not have the virus. Even if you offer your employees PTO, you may be able to cap the use of the leave and still be in compliance with the various state sick and safe leave laws.
Locally, for example, Maryland caps the sick and safe leave usage requirement at 64 hours per year, and the Montgomery County cap is 80 hours per year. We suggest that you permit the use of liberal paid sick leave – if you guess wrong, potential consequences could be double, triple or even quadruple damages. And, if your policy/practice allows for the payout of accrued vacation leave at termination, it might make sense to allow employees to use it on furlough. You might be struggling with cash flow issues – and your employees might be struggling with cash flow issues. None of this is easy. Call your lawyer if you want to discuss options.
If you need to layoff employees
The Federal WARN Act typically is triggered when the employer terminates 50 or more employees within a 90 day period. The law is complicated and the consequences are significant, so our suggestion is that if you are doing a layoff please check with a lawyer first.
There are also state WARN obligations that are often triggered even when the layoff does not involve 50 employees.
Whether you have to pay out accrued leave is often determined by state law. As one example, in Maryland, the default understanding is that you do have to pay out accrued vacation (and accrued PTO if that’s what you use) UNLESS you advised the employee AT THE TIME OF HIRE that you do not pay out the accrued balance.
Please stay tuned. As we learn more, we will share more.
Good luck, and stay safe everyone.
Contact info: Meredith S. Campbell Chair, Employment and Labor Group, Shulman Rogers firstname.lastname@example.org |T 301.255.0550 | F 301.230.2891