FAQs for Employers During COVID-19

By Muhammed Talal Hussain, Esq. and Patty Chen, Esq.

The world has entered a phase with no known precedent, dealing with a worldwide pandemic, where people who provide non-essential services are required to work from home. In addition to the threat of contracting COVID-19, there is understandable uncertainty about what rules employers must follow and how they should follow them in these times. In addition, many countries, including the United States, have implemented new laws and rules in light of COVID-19, as employers work diligently to keep their businesses afloat and employees continue working so that they can support themselves and their families. Below, in FAQ format, we address some areas where our clients, as employers, have voiced their concerns.

PAY AND LEAVE REQUIREMENTS

Do employers need to pay employees who are not working?

For hourly employees the answer is generally “no.” Hourly employees who are not working are typically not entitled to the wages under the Fair Labor Standards Act (“FLSA”). The FLSA only requires that minimum wage and overtime requirements are met based on the hours an employee worked in a workweek.

For non-exempt salaried employees who perform at least some work in the workweek, they must be paid the entire salary for that particular workweek even if the work is done at home. Also, non-exempt employees paid on a “fluctuating-workweek” basis under the FLSA normally must be paid their full fluctuating-workweek salaries for every workweek in which they perform any work.

Can an employer direct an employee to use their vacation or leave balances?

The FLSA generally does not regulate the accumulation and use of vacation and leave for hourly employees.

However, the employer may direct its salaried employees to take vacation or debit their leave account when the employee is absent from work for a day or more for personal reasons, other than sickness or disability as long as its salaried employees receive a payment equal to their guaranteed salary. Further, a salaried employee who does not have any accrued benefits or has a negative balance in the leave account must receive the employee’s guaranteed salary if the employer is not open for business in light of COVID-19.

Similarly, California permits an employer to manage its vacation policy and employers are permitted to instruct employees to take their vacation time as long as the employees are paid the same rate as the latest rate of pay prior to taking the vacation.

Does family and medical leave apply to this situation?

Generally, employees are not entitled to take medical leave to stay at home to avoid getting sick. However, employees requesting leave conceivably could be protected by the Family and Medical Leave Act to the extent they are requesting leave for the following reasons: (1) bond with a new child, (2) recuperate from a serious health condition, (3) care for a family member with a serious health condition, (4) handle qualifying exigencies arising out of a family member’s military service, or (5) care for a family member who suffered a serious injury during active duty in the military.

Under the Families First Coronavirus Response Act, an employee must be given at least 10 paid sick days (at the employee’s regular rate of pay) if the employee is unable to work because the employee is quarantined (pursuant to federal, state, or local government order or advice of a health care provider), and/or experiencing COVID-19 symptoms and seeking a medical diagnosis. Further, if the employee is unable to work due to a bona fide need to care for an individual subject to quarantine (pursuant to federal, state, or local government order or advice of a health care provider), or a need to care for a child (under 18 years of age) whose school or child care provider is closed or unavailable for reasons related to COVID-19, then the employee must be provided 10 days of paid sick leave at two-thirds of the employee’s regular pay rate. In addition, an employee (who has been employed for at least 30 calendar days prior to the request for leave) is entitled to an additional 50 days of paid sick leave at two thirds the rate to due to a bona fide need for leave to care for a child whose school or child care provider is closed or unavailable for reasons related to COVID-19.

In California, all full-time employees must be provided with a minimum of three paid sick days.

TRAVEL AND POSSIBLE CONTRACTION OF COVID-19

Can an employer prohibit an employee from traveling to a non-restricted area on their personal time? 

On March 19, 2020, the U.S. Department of State issued a Level 4 “Do Not Travel” advisory warning to U.S. citizens to avoid all international travel due to COVID-19. The United States, Mexico and Canada also have suspended all non-essential travel between countries. However, employers generally cannot prohibit otherwise legal activity, such as travel abroad by an employee.

What if an employee has recently traveled to an affected area or otherwise may have been exposed to the COVID-19 coronavirus?

The Americans with Disability Act (“ADA”) prohibits employers from making disability-related inquiries and requiring employees to undergo medical examinations unless (1) the employer can show that the inquiry or exam is job-related and consistent with business necessity, or (2) the employer has a reasonable belief that the employee poses a “direct threat” to the health or safety of the employees or others that cannot otherwise be eliminated or reduced by reasonable accommodation.

The Equal Employment Opportunity Commission has confirmed that an employer can inquire into an employee’s symptoms, even if those questions are disability-related. Those inquiries should attempt to distinguish the symptoms of COVID-19 from the common cold and the seasonal flu. This should include inquiries into whether an employee is experiencing fever, fatigue, cough, sneezing, aches and pains, runny or stuffy nose, sore throat, diarrhea, headaches and shortness of breath.

It is important to remember that an employer must maintain all information about employee illness as a confidential medical record in compliance with the ADA. Further, California employers must comply with the California Consumer Privacy Act’s compliant notice prior to or at the same time as an employer’s collection of this information.

Does contraction of COVID-19 coronavirus implicate the ADA?

Generally, no, because in most cases the COVID-19 coronavirus is a transitory condition. However, some employees could make an argument that the ADA is implicated if the virus substantially limited a major life activity, such as breathing. Moreover, if an employer “regards” an employee with COVID-19 as being disabled, that could trigger ADA coverage.

Do we have any equal employment opportunity concerns related to COVID-19?

Employers cannot select employees for disparate treatment based on national origin. The CDC recently warned: “Do not show prejudice to people of Asian descent, because of fear of this new virus. Do not assume that someone of Asian descent is more likely to have COVID-19.”

Employers will need to closely monitor any concerns that employees of Asian descent are being subjected to disparate treatment or harassed in the workplace because of national origin. This may include employees avoiding other employees because of their national origin.

An employer may not base a decision to bar an employee from the workplace on the employee’s national origin. However, if an employee, regardless of their race or national origin, was recently in China and has symptoms of COVID-19, an employer may have a legitimate reason to bar that employee from the workplace.

LAY OFFS AND SHUTTING DOWN A SITE OF EMPLOYMENT

Do we have an obligation to provide notice under the federal WARN Act if we are forced to suspend operations on account of COVID-19? 

Yes, if your company is covered by the Worker Adjustment and Retraining Notification (“WARN”) Act. The federal WARN Act imposes a notice obligation on employers with 100 or more full-time employees who implement a “plant closing” or “mass layoff” in certain situations, even when they are forced to do so for economic reasons. It is important to keep in mind that these quoted terms are defined under WARN’s regulations, and that they are not intended to cover every single layoff or the shutdown of a single site of employment.

Generally speaking, employers must provide at least 60 calendar days of notice prior to any covered plant closing or mass layoff — which can be triggered with a layoff of as few as 50 employees under federal law (potentially less under applicable state laws). Note, however, that if employees are laid off for less than six months, then they do not suffer an employment loss and, depending on the particular circumstances, notice may not be required. Unfortunately, in light of COVID-19, it is hard to know how long the layoff will last and notice cannot be provided retroactively, so providing notice is usually the best practice.

In cases where its notice requirements otherwise would apply, the WARN Act provides a specific exception when layoffs or plant closings occur due to unforeseeable business circumstances, or are the result of a natural disaster. These provisions may apply to the COVID-19 coronavirus. But due to the fact-specific analysis required, these exceptions are often litigated.

Moreover, these exceptions are limited in that an employer relying upon this exception still must provide “as much notice as is practicable, and at that time shall give a brief statement of the basis for reducing the notification period.” In other words, once an employer is in a position to evaluate the immediate impact of COVID-19 upon the workforce, an employer then must provide specific notice to “affected employees” as soon as practicable. An employer also must provide a statement explaining the failure to provide more extensive notice, which in this case would obviously be tied to the unforeseeable nature of COVID-19 and its aftermath.

The WARN Act has specific provisions requiring notice to employees and specifies the information that must be contained in each notice. Even a seemingly minor deviation from these requirements can trigger a violation. Also keep in mind that some states have “mini-WARN” laws that may apply.

In California, its WARN laws apply to employers with 75 or more full- and part-time employees. Such an employer must give employees a WARN notice 60-days prior to a plant closing, layoff or relocation. In addition to the notifications required under federal WARN, a notice also must be given to the Local Workforce Development Board, and the chief elected official of each city and county government within which the termination, relocation or mass layoff occurs. Also, California WARN laws do not have an exemption for unexpected closures and layoffs and only exempt closures and layoffs as a result of physical calamity and acts of war.

Will the WARN Act really be enforced in light of COVID-19?

It is unclear. Nonetheless, the federal WARN law provides heavy penalties for non-compliance, including up to 60 days of back pay and benefits, along with a civil penalty of up to $500 each day an employer fails to provide the required notice. In addition, if a state’s “mini-WARN” laws apply, the employer may also be subject to those state penalties. More importantly, the federal WARN law provides for a private cause of action in federal court, thus an employer may be subject to lawsuits arising under the WARN Act regardless of the enforcing agency’s official position.

WORKER’S COMPENSATION

My employee alleges that they contracted the coronavirus while at work. Will this result in a compensable workers’ compensation claim?

A compensable workers’ compensation claim is possible, but the analysis would be fact-specific.

It is important to note that the workers’ compensation system is a no-fault system, meaning that an employee claiming a work-related injury does not need to prove negligence on the part of the employer. Instead, the employee need only prove that the injury occurred at work and was proximately caused by their employment. Additionally, the virus is not an “injury” but is instead analyzed under state law to determine if it is an “occupational disease.” The key point will be whether the employee contracted the virus at work and whether the contraction of the disease was “peculiar” to their employment. Even if the employer takes all of the right steps to protect the employees from exposure, there may be a compensable claim where the employee can show that they contracted COVID-19 after an exposure, the exposure was peculiar to the work, and there are no other alternative means of exposure.

Finally, employers should be aware that states are taking action on this issue. For instance, Washington Governor Jay Inslee recently directed his Department of Labor and Industries to “ensure” workers’ compensation protections for health care workers and first responders. The directive instructs the Department to change its policies regarding coverage for these two groups and to “provide benefits to these workers during the time they’re quarantined after being exposed to COVID-19 on the job.” Other states may follow Washington’s lead.

My employee contracted COVID-19 while on a business trip for my company. Is this a compensable workers’ compensation claim?

It depends. While an employee who contracts a disease while traveling for business may be eligible for workers’ compensation benefits in many jurisdictions, the analysis will be fact-specific. In most states, the worker will need to satisfy the test for compensability.

What are the likely benefits an employee will be eligible to receive if their coronavirus infection is found to be a compensable workers’ compensation claim?

Except in rare situations, an employee diagnosed with COVID-19 will have no significant long-term health care problems. Therefore, medical costs associated with the claim are likely to be limited to visits to the family physician and anti-viral medications. More significant cases may involve hospital stays of two to six weeks.

The compensation costs should also be limited to the lost time associated with any recovery time. Compensation costs also may be associated with lost time due to quarantine as required by the employer or local, state or federal government agencies.

There could be more significant costs in extreme and rare situations involving complications from COVID-19. However, these cases would usually be limited to claimants who are older or suffer from immune deficiencies.

The above list is not exhaustive, but is based on inquiries the attorneys at Encore Law Group have received over the past few weeks. If you have any further questions, would like more information on the issues discussed above, or would like an analysis of your specific employments needs during the current crisis, please feel free to contact the authors at muhammed@encorelaw.com or patty@encorelaw.com, or any other Encore Law attorney.

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