EMPLOYERS: BE PREPARED – RISKS OF CLAIMS TRIGGERED BY THE COVID-19 PANDEMIC
Although employers are working hard to confront the unprecedented legal and practical challenges raised by the COVID-19 pandemic, a variety of employment claims arising from pandemic-related personnel actions must be anticipated. The purpose of this DDWK Update is to discuss the steps employers can take now to reduce exposure to foreseeable employment claims arising from the pandemic.
Wage and Hour Claims
Wage and hour claims are nothing new to employers in California. And with reductions in employee wages, hours, remote-work, and adoption of staggered schedules, it is a virtual certainty that pandemic-related wage and hour claims will follow. We anticipate the following:
- Claims alleging that non-exempt employees working remotely were not paid for all hours worked (due to relaxed or different timekeeping systems used for remote work and/or due to performing some work while on an unpaid furlough);
- Claims alleging that employees were not reimbursed for all necessary business expenses associated with remote work;
- Claims that employees who were temporarily furloughed and then laid off were not timely paid their final wages; and
- Claims that exempt employees had pay deductions that violated the rule requiring that exempt employees generally must be paid their full salary for any workweek in which they perform work.
What to do?
Employers should ensure that employees performing remote work are provided with clear, written remote-work and expense reimbursement policies, signed and acknowledged by each employee. Employers should also carefully review timesheets of all hourly, non-exempt employees on a weekly basis to ensure employees are properly recording and taking meal and rest breaks.
Concerned about wage and hour pitfalls? Contact us to discuss strategies and policies to implement now in order to protect your business and minimize exposure to claims.
FEHA Discrimination, Failure to Accommodate, and Retaliation Claims
Employers have already been dealing with essential workers who are afraid (and refuse) to physically report to work due to a general fear of COVID-19 exposure and/or infection. Although fear of contracting COVID-19 is likely not a qualifying reason to refuse work, or for FFCRA leave, employers that have terminated employees for refusing work may be exposed to claims by employees that they were unlawfully discriminated against due to a disability (physical or mental) and/or retaliated against for engaging in the protected activity of refusing to work in unsafe work conditions.
Each such case will be highly fact specific. There are no clear rules to guide employer decision-making during this health crisis. However, cautious employers will be flexible with respect to requests for accommodations and leave time during the pandemic. For now, we advise employers to consult with legal counsel before taking adverse actions against employees who are not reporting to work due to any COVID-19 related concerns.
Failure to Provide Paid FFCRA Leave
By the time the Families First Coronavirus Response Act (“FFCRA”) was enacted, employers already had their hands full with determining whether they could lawfully operate, whether they provided essential services, and whether they were complying with Stay-at-Home instructions. The well-intended FFCRA only complicated matters. Unfortunately, it is very likely that we will see claims for unlawful denial of paid leave and related violations (e.g. failure to calculate the amount of pay for sick leave) as a result. Are your employees entitled to FFCRA leave? This can be a challenging question and it’s one without an obvious answer. The best safeguard against exposure under the FFCRA is to educate and provide training and other support to your Human Resources staff on federal, state, and local paid leave laws and the development of compliant policies and practices.
And it’s not just about avoiding claims. With a tax credit reimbursement from the federal government on the line, making a proper FFCRA eligibility determination is crucial to the bottom line for multiple reasons. To ensure that you have sufficient information to make a determination and documentation needed to obtain a payroll tax credit, we recommend preparing a FFCRA Employee Eligibility form. Need a form, but don’t know where to start? Contact us for a sample FFCRA Employee Eligibility form.
Keep in mind, all FFCRA eligibility determinations require a case-by-case assessment, and you should contact legal counsel for guidance on any specific questions, issues, and situations.
WARN Act Claims
As a result of California’s statewide Stay-at-Home order, many businesses have been forced to temporarily close their doors and cease operations. This has necessitated furloughs and layoff decisions, most of which could not have been foreseen early enough to comply with existing notice requirements under the federal and/or California WARN Act notice requirements (i.e. certain covered employers must provide workers and other entities with 60 days’ advance notice of a layoff or closure). Although Governor Newsom relaxed many (but not all) of the California WARN Act requirements, there is still no clear law on whether the pandemic excuses strict compliance with these laws’ notice requirements. We anticipate that this issue will be litigated in the courts, especially for California employers who conducted layoffs prior to Governor Newsom’s executive order.
Employers who are still considering layoffs and furloughs should contact legal counsel now to conduct a WARN Act analysis (under federal law and the California WARN Act) to determine whether notice requirements need to be followed.
Our team of attorneys are here to assist your business with understanding what kinds of strategies and protocols may minimize potential liability due to COVID-19-related personnel actions, and guiding employers on FFCRA leave issues, including employee eligibility determinations and obtaining tax credit reimbursement. Please contact us for further assistance.