The current crisis presents a vast number of serious and novel concerns for the American workforce. Working through it is going to require a cooperative and collaborative relationship between employers and employees. Wood + Lamping is here to help facilitate that relationship and ensure that employers stay on the right side of the law in these trying times. This guidance memo is intended only as a general summary of the potential issues and legal requirements. If you have specific questions, do not hesitate to reach out to one of our attorneys for the answers. We are in this together.
As the United States prepares to hunker down in the hopes of mitigating the impact of the COVID-19 pandemic, every employer should be inquiring as to how to manage their workforce in a way that both mitigates the risks of spreading the virus and maintains some level of productivity without violating applicable employment laws. Wood + Lamping’s Labor and Employment Practice Group has some guidance and answers to employers’ questions.
Communication is Key
Communication with your workforce is an incredibly important first step. Many employees are going to be panicked by the tidal wave of news, information, and misinformation. Employers can attempt to calm some of this panic with reassuring communications and helpful and accurate information. Employers should start by letting employees know that they are monitoring the situation, taking steps to minimize the risk of infection, and are committed to keeping employees as safe as possible. Among other steps, employees should be instructed to wash their hands frequently, practice “social distancing” (staying at least 6 feet away from others and avoiding large groups), limit travel, and work from home where feasible and appropriate.
Numerous government agencies have established websites specifically addressed to COVID-19 and compliance with the law. Links to a number of these sites are contained below. It will be helpful if employers share information from the Center for Disease Control (“CDC”) and other vetted information sources with employees so that they can stay accurately informed and take appropriate measures to protect themselves.
Employee Leave and Medical Inquiries
Per the CDC’s guidance published at the following link- www.cdc.gov/coronavirus/2019- ncov/hcp/guidance-prevent-spread.html, employers should instruct anyone who is feeling ill or exhibiting symptoms (fever, cough, shortness of breath) to remain home from work for a period of at least 14 days. The employment laws can make it risky for an employer to inquire about an employee’s health or medical condition, but given the incredibly serious nature of the COVID-19 outbreak and the fact that it has been declared a pandemic, employers will have more leeway in monitoring the health of employees. Employees should be strongly encouraged to self-report and isolate, but employers should also advise managers and supervisors to report if they are seeing anyone exhibiting symptoms.
We urge clients to carefully review their leave policies and the needs of their business to determine what is the best policy during this emergency. This review might include suspending any “no fault” attendance policies and extending as much paid leave as possible to encourage employees to stay home from work when exhibiting symptoms or after coming into contact with people or places that have been confirmed or presumed to have been infected. This can be accomplished by allowing or requiring employees to apply any paid time off (“PTO”), sick leave, or vacation time to absences due to infection or precautionary quarantines. Employers should review their employee handbooks and leave policies to determine if any temporary modifications or exceptions are necessary and should clearly communicate those changes to employees. If possible, employers should consider extending paid leave to affected employees even when the employee does not have any available paid leave. Doing so should greatly reduce the pressure on employees to come to work even if they are sick or exhibiting symptoms.
Employers with 50 or more employees are likely covered by the Family Medical Leave Act (“FMLA”). Employees diagnosed with COVID 19 or any other serious health condition have a right to up to 12 weeks of unpaid leave under the FMLA. However, an employee does not automatically have a right to take leave simply because they are worried about the virus or their kids are off school. The FMLA only requires leave for employees or family members with an actual serious health condition. If an employee is sent home strictly as precautionary measure, never develops symptoms, and is not diagnosed with COVID-19, the time away from work should not be counted against their FMLA leave. The Department of Labor (“DOL”) has published helpful guidance on complying with the FMLA during the current pandemic at the following link – https://www.dol.gov/agencies/whd/fmla/pandemic.
However, employers should take note that legislation is currently pending in the House or Representatives (H.R. 6201) that could significantly increase employers’ obligations to provide unpaid and even paid leave to employees under the FMLA. More on that below.
Employers can require employees who have been quarantined at home to provide a doctor’s note verifying that they are not ill or contagious and are capable of returning to work before the employee’s return – although the CDC is advising against the practice at the current time because it could lead to even more strain on already overloaded doctors’ offices.
When employees think of privacy, most think of the Health Insurance Portability and Accountability Act (“HIPAA”) notices that they are given when they visit their doctors’ office. Most employers outside of the healthcare industry are not “covered entities” under HIPAA’s definitions and, therefore, will not have HIPAA protected information. Medical information obtained in connection with FMLA leave, workers’ compensation claims, disability accommodation, or other legitimate workplace needs is not “Protected Health Information” under HIPAA.
With that said, the Americans with Disabilities Act (“ADA”) and the FMLA do require employers to maintain the confidentiality of employees’ medical conditions and information.
If an employee has become ill, is suspected of having COVID-19, or is sent home because of potential infectious contact, that specific information and the employee’s identity should not be disclosed to co-workers. Any doctors’ notes or other medical documentation should be maintained in a file separate from the employee’s personnel file. If there is infection or possible exposure, it will generally be enough to tell affected employees that there has been possible exposure in the workplace and direct those potentially infected to stay home and seek treatment if they exhibit symptoms.
Wage and Hour Issues
One of the most difficult challenges that employers will face during this crisis will be implementing measures that mitigate the spread of the virus while also ensuring compliance with federal and state wage and hour laws. The Fair Labor Standards Act (“FLSA”) is the primary law governing these issues, but employers should consult their state and local statutes, as some jurisdictions may have different or more stringent requirements.
Hourly employees need only be paid for time that they actually perform work. As such, if an hourly employee is required to stay home, the law does not require that they be paid. However, employers should be considering more than just basic compliance with the law. As stated above, employers should relax leave policies and find ways to extend as much paid leave as possible.
The rules relating to salaried exempt employees present more complications. The basic rule is that if an exempt employee does any work in a workweek, they are entitled to their full salary for that week. If an exempt employee is sent or chooses to stay home because of possible infection, employers should be clear about whether that employee is expected to perform work while away from the office. If that employee is answering e-mails or otherwise working remotely, they are entitled to be paid their regular salary.
Employers also need to be careful in making any deductions from exempt employees’ pay for absences or reduced levels of work. If an exempt employee is out for a few days because of illness and has exhausted paid sick/time off, the employer may reduce the employee’s salary in full-day increments as long as the employer maintains a sick leave policy or other PTO type plan. If an exempt employee has available paid time off, that leave bank can be reduced in half day or smaller increments.
It is likely that some employers will implement reduced work schedules or furloughs. If an employer is going to have a temporary shutdown or furlough and does not want or expect exempt employees to work during that time, the employer should clearly communicate that no work is to be performed. Employers may even consider restricting exempt employees’ access to e-mail or other computer systems to ensure that no unauthorized work is performed during the shutdown. If the goal is to reduce payroll costs and salaries for exempt employees, the furlough must be at least a full week. If it is for any less than a full week, exempt employees must be paid their full weekly salary.
Employers who choose to reduce the number of days or hours worked (instead of completely shutting down) also must also evaluate the wage and hour issues associated with doing so. Non-exempt hourly employees only have to be paid for the hours that they work, so reducing the number of days or hours to be worked could be a useful tool to save on hourly payroll costs. Simply reducing the number of days or hours worked will not affect the pay of exempt employees. However, employers may choose to temporarily reduce exempt employees’ salaries on a going forward basis (as long as it is not reduced below the current $35,568 salary threshold) to account for the reduced amount of work being performed.
Wage and hour laws can be extremely complicated under normal circumstances, let alone during a crisis like the one we currently face. Consult your legal counsel if you have any questions about how to effectively and legally manage your workforce. Employers should also consult the Department of Labor’s specific guidance on the FLSA and COVID-19 at the following link – https://www.dol.gov/agencies/whd/flsa/pandemic. As a general guideline and where feasible, employers should administer leave policies in a way that encourages affected employees to stay away from the workplace to protect the workforce and slow the rate of infection.
Working from Home
The CDC has identified allowing employees to work from home as one of the principal means of limiting exposure to the virus. Employers who will allow employees to “telecommute” should implement written policies setting forth the rules and expectations when doing so. Procedures should be put in place for non-exempt employees to accurately record their time while working from home, whether by logging into time-keeping software or by completing a physical timesheet.
Companies should have their IT providers assess the equipment and software necessary to allow a significantly larger number of employees to work remotely. If there is additional equipment or extra costs (increased internet speed or data charges), employers should pay for those expenses. Employers should also be scrutinizing the potential security risks associated with larger number of employees working from home.
Workers’ Compensation and Safety and Health Regulations
If an employee contracts COVID-19, it is unlikely that it would be considered as “work-related” for purposes of workers’ compensation coverage. The exception to this may be employees in industries that are particularly at risk for workplace exposure, such as healthcare, laboratories, airline employees, waste management, and those businesses requiring travel to highly infected areas. Employees working in those settings have a higher risk of exposure due to the nature of their work and, therefore, contracting COVID-19 could be viewed as work-related for purposes of workers’ compensation coverage.
OSHA requires most employers with over 10 employees to record any workplace injuries or illnesses on a required OSHA 300 Log. OSHA regulations specifically exempt the common cold and flu from these recording requirements. However, OSHA has strongly suggested that the regulations do not exempt cases of COVID-19 from the record-keeping requirements. As such, OSHA seems to be taking the position that if an employee contracts COVID-19 and needs medical treatment or takes days away from work, that incident will need to be recorded on the appropriate forms. Attorneys who are well-versed in OSHA’s recordkeeping requirements take issue with OSHA’s suggestion that COVID-19 should be a recordable illness, so consult with counsel if you have any confirmed cases in your workforce.
When the outbreak first became prevalent in the news, many people began wearing respiratory masks in an effort to protect themselves from infection. The CDC and other agencies have now strongly condemned the wearing of masks by those who are not infected. Those agencies have explained that masks do little to stop initial infection and the mass purchase of medical masks has created a severe shortage for the medical professionals who need them. Given this guidance, employers are not required to permit employees to wear such masks. If employees are permitted to voluntarily wear masks, the employer must provide each employee who does so with Appendix D to 29 C.F.R. § 1910.134. In workplaces where employees are required to wear such masks or other respiratory protection, employers must maintain a much more extensive respiratory protection program.
Many employers have asked whether panicked employees can simply refuse to come to work out of fear that they might contract the virus. OSHA does allow employees to refuse to work in situations where there is a reasonable threat of serious physical injury or death. As long as employers follow the CDC’s and other agencies’ guidance and take steps to limit infection, the current outbreak will likely not rise to a level where employees could refuse to work. As such, employees can be required to come to work, despite their fears about infection.
Like the Department of Labor, OSHA has also published guidance on how employers should respond to the pandemic. A link to that guidance can be found here – https://www.osha.gov/Publications/OSHA3990.pdf.
Layoffs, Reductions in Force, and Continuation of Health Insurance
It is widely anticipated that many employers will need to implement temporary layoffs to reduce payroll and other overhead expenses. In contrast to reductions in hours or other types of furloughs, layoffs allow employees to receive unemployment compensation. Depending on the expected length of the layoff, employees may also be exempt from the requirement to search for work while receiving unemployment benefits.
Unfortunately, some employers may be forced to undergo more permanent reductions in force (“RIF”) in response to the pandemic. Employers conducting such RIFs typically offer severance packages to those employees being terminated in exchange for an employee’s execution of a release of claims. The purpose of doing so is to limit the risk of employees filing employment-related claims relating to the RIF. The risk of such legal claims in the current climate is greatly reduced because the COVID-19 outbreak is a widely recognized and a very legitimate non-discriminatory reason for employers to reduce their workforces. As long as employers conduct such reductions in a way that does not disproportionately impact protected classes of employees, the risk should be minimal. If an employer does decide to offer severance benefits to a group of terminated employees, the release agreements need to comply with the Older Workers Benefit Protection Act (“OWBPA”), which requires that employees over the age of 40 be provided with certain information about the RIF and be given 45 days to consider the severance package offered by the employer.
RIFs, layoffs, and furloughs can all trigger an employer’s obligation to notify employees of their right to continue their health insurance pursuant to the Consolidated Omnibus Budget Reconciliation Act (“COBRA”). Employers most notify employees of their rights under COBRA within 30 days of such an event and employees then have 60 days to elect continued coverage at the employee’s expense. If an employee’s hours are reduced below the threshold established for coverage by the employer’s health insurance plan, the employee is also eligible for COBRA coverage. Given the importance of health insurance in the current crisis, employers may want to consider offering to reimburse employees for health insurance coverage pursuant to COBRA, whether as a part of a severance package or simply as a gesture of goodwill.
Mass layoffs or plant closings also implicate an employer’s obligations under the WARN Act. Employers with 100 or more employees who implement a mass layoff (50 employees or more at a single site) are generally required to provide 60 days’ notice of that layoff. However, there are exceptions to the 60 day notice requirement when the layoff is necessitated by unforeseeable business circumstances or a natural disaster. Both of those exceptions are implicated by the current crisis. If a mass layoff is necessitated by the outbreak, employers will be required to provide notice of the layoff as soon as is reasonably practicable.
Consistency is the key word in human resources and employment law and the current crisis is no exception. Employers should not target or treat specific groups differently or with additional scrutiny because of assumptions about their risk of exposure. For example, employers should not focus on employees of Asian descent because they assume that such individuals may be more likely to have contact with infected individuals. Likewise, workplace policies such as the use of paid leave and working from home should be administered in a non-discriminatory manner. If employees need to be treated differently, the employer should ensure that there are documented legitimate, non-discriminatory reasons for the differences in treatment.
Collective Bargaining and Employment Contracts
Employers with unionized workforces (in both the public and private sector) will need to consult their collective bargaining agreements to determine whether they will need to negotiate over any proposed changes in schedules, hours, or other terms and conditions of employment. This also applies to employees who have employment agreements setting forth the terms of their employment, the reasons they can be terminated, or the amount or nature of their compensation. Failure to comply with the terms of these contracts could create serious legal liability or administrative action such as unfair labor practice charge.
On top of all the employment laws already in place, on March 14, 2020, the House of Representatives passed the Families First Coronavirus Act, H.R. 6201. That bill is widely expected to be approved by the Senate and signed by the President early in the week of March 16, 2020. While the details of the bill could change, the following is a brief summary of its provisions.
The first part of the bill addresses amendments to the FMLA, which amendments will remain in place until at least the end of 2020. The new and expanded FMLA obligations will apply to any employer with 500 or fewer employees, although the legislation leaves open the opportunity for subsequent regulations to exclude healthcare workers, emergency responders, and companies with less than 50 employees that are at risk of going out of business. These added FMLA benefits will apply to any employee with more than 30 days of employment (eliminating the requirement for 1 year of service and 1,250 work hours).
Covered employees will be entitled to take up to 12 weeks of leave if: 1) the employee is subject to an order or instruction from a health care authority or provider because the employee has been exposed to COVID-19 or has exhibited symptoms and is unable to perform the function of the job and comply with that order; 2) the employee must care for a family member subject to the same order or instruction; or 3) the employee must care for a child who is under 18 years of age and whose elementary or secondary school has been closed, or whose childcare provider is unavailable due to the public health emergency. The first two weeks of such leave can be unpaid. The remaining time must be paid by the employer at 2/3 the employee’s normal rate of pay.
The second part of the legislation will provide up to 80 hours of paid sick leave if the employee must: 1) self-isolate because the employee is diagnosed with COVID-19; 2) seek a medical diagnosis because the employee is experiencing symptoms of the disease; 3) comply with an order of a health authority or health care provider to remain away from work because of possible exposure or symptoms; 4) care for a family member who is self-isolating, diagnosed, or ordered to remain home; or 5) care for a child whose school has closed or whose childcare is unavailable. Leave taken for reasons 1 through 3 must be paid at the employee’s full rate of pay. Leave taken for reasons 4 or 5 can be paid at 2/3 of the employee’s normal rate of pay. Under the bill, this paid leave must be provided in addition to any leave that the employer already provides.
One important caveat to this legislation is that it does not appear to apply to situations where an employer closes its facilities in response to COVID-19 concerns. If an employer prohibits employees from reporting to work because of the pandemic and employees are unable to work remotely (and they do not fall under the above categories of coverage), they would not be entitled to paid leave under the current legislation.
If passed, the new leave provisions will take effect within 15 days. Like any legislation, this bill is subject to change or amendment, so please check back with Wood + Lamping for updates.
The guidance provided in this Memo is meant to be a general overview of the applicable law and not a comprehensive answer to every employment-related question. You should consult with legal counsel and the specific laws of your jurisdiction to make sure you are taking appropriate and legal steps.