Returning to Work After COVID-19 Means More Wage & Hour Concerns
With states, cities and counties taking measures to reopen after COVID-19, businesses are also faced with reopening and returning employees to work while still facing many unknowns. Despite these unknowns, employers must ensure compliance with applicable laws when designing a plan to reopen. From the typical issues related to classifying employees to more nuanced considerations related to testing, employers must adhere to and consider federal and state wage and hour laws when implementing plans to reopen.
Employee Classification Issues
When concerns with COVID-19 began, many employers changed their employee structure to cope with economic uncertainties. Now with reopening and bringing employees back, employers likely will face additional changes to structure their businesses around the new normal following COVID-19.
Generally, when bringing exempt, salaried employees back to work, employers must evaluate how to ensure such employees retain their exempt status. This includes adhering to the minimum salary requirements and ensuring that the job duties still fit under an exemption. Otherwise, employers risk liability for misclassification, including but not limited to financial liability unpaid overtime.
Employers must also be cognizant on returning exempt employees on a “partial” basis – as the FLSA requires that exempt employees that are working only part of a workweek at the direction of the employer are still entitled to their entire salary for that week. Thus, if an employer has the idea of bringing back an exempt employee for 4 out of 5 work days and considering doing an automatic reduction of salary to account for the reduced schedule, the employer must communicate to the employee beforehand that the employee’s salary will be reduced – as failing to do so may jeopardize the employee’s exempt status.
Additionally, salaried employees brought back from furlough, but being paid a lower rate, present unique issues. When making these changes, employers should ensure that the salary meets federal and state minimum salary levels, that the employee’s responsibilities have not changed so much as to take them out of an exemption category (e.g., that exempt employees, even if given non-exempt duties to cover employee shortages, are still spending the majority of their time on exempt type duties), and that the proper reason for the salary reduction is communicated (e.g., that the reductions are due to the pandemic, correspond with a reduced schedule, etc.). Employers need to also ensure they are complying with applicable state laws relating to properly communicating any salary reductions to employees.
Additionally, some employers may have reclassified previously exempt employees to non-exempt due to a change in business needs caused by COVID-19. Employers should be cautious when deciding to return such employees back to exempt status and should be aware of any notice requirements that must be given to employees when changing their classification. For example, employers should evaluate the financial circumstances of the company and changing economy before reclassification to ensure that the exempt classification is expected to remain.
Plans to reopen may include a redesign of schedules which could include staggered shifts, a continued or new focus on teleworking, or an overall change in hours. Employers must be cognizant of how this will impact all employees, whether exempt or non-exempt.
When implementing these changes employers must remember the principle that exempt, salaried employees generally must receive their full salary in any week in which they perform work, with limited exceptions. As such, if a salaried employee is instructed to perform no work during a given week, the employer must ensure this is enforced or risk liability – meaning that the exempt employee must be prohibited from answer emails, responding to texts, etc. Similarly, as discussed above, if less work is available but must still be performed each week, employers cannot deduct an exempt employee’s pay due to reduced hours from week to week – rather, the employer must anticipate the reduced hours and set a “new” salary ahead of time that will be paid every week to the employee when they perform work. However, the exempt employees cannot be paid on an hourly, daily, etc. basis, as that will destroy the exemption. Employers should evaluate whether any changes in workload or duties necessitate reclassification of exempt employees.
For non-exempt employees, new schedules may impact the number of hours worked. Regardless, non-exempt employees must be paid for all hours worked, at the minimum wage necessitated by both state and federal law. Additionally, as employers evaluate the costs and benefits of allowing teleworking, employers must continue to ensure non-exempt employees are accurately tracking all their time worked and are being paid for all hours worked. Employers should require that non-exempt employees accurately record rest breaks and meal breaks and ensure that they take such breaks in accordance with applicable law. Moreover, to ensure that overtime is not only recorded, but also does not place a financial strain on the business, employers may consider requiring that all overtime be pre-approved.
Using Vacation and Other Paid Time Off
While businesses are choosing to reopen, some employees may still feel unsafe going into work due to COVID-19. In addition to determining whether allowing these employees to stay home is a reasonable accommodation under the ADA, employers should consider whether they can appropriately require such employees to use vacation or other paid time off benefits during this time. Additionally, use of vacation or other paid time off may provide assistance for employers grappling with how to pay exempt employees their required salary, despite such employees not working full weeks.
Many employers are instituting testing, such as temperature checks, before enter a worksite or return to work. When deciding to implement temperature screenings, which are akin to security screenings required before entering work, employers must determine whether employees must be paid for this time. Whether screenings constitute paid time depends on a business’s location. Regardless of where a business is located, however, not paying employees for time spent undergoing a screening will always be the riskier approach. As such, employers should consider whether options to minimize the time spent during a screening are available and comply with local and state orders requiring screenings.