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What Do Employers Need to Know About COVID-19 Liability?

This episode covers COVID-19 liability. As an employer recovering from shutdowns in your area, you may be in danger of getting a consumer or employment complaint from their potentially getting sick in your office or store. The liability shield for these situations is a major part of the discussion for the proposed stimulus bill because there is a major concern that, without it, many businesses will become vulnerable to legal troubles once they reopen. Since the federal government has not yet acted, many states have come in and put their own liability shields in place. Hunton Andrews Kurth’s COVID-19 Complaint Tracker tracks by state and type. Of the 4,280 complaints filed as of August 13, most (around 1,000) are related to insurance claims, malpractice suits, civil rights cases, and government taking. The key cases to be covered by the liability shield proposed by Congress are called “consumer cases”. These include personal injury, price gouging, product liability, recurring membership fees charged during a shutdown, and wrongful deaths. Through the tracker, it was found that only a few of the aforementioned 4,280 cases are actually related to consumer cases. Nevertheless, many states have taken action to blunt the risk that businesses will be held liable for COVID-19-related injuries. Take the time to examine the CDC guidelines for businesses and employers and make sure that they are being followed, as they do provide extreme protection in the case of a lawsuit.

How Many Businesses Were Prosecuted by the DOL Last Month for Primary Violations?

Despite the many drastic developments that the U.S. has undergone in 2020, the Department of Labor remains vigilant in prosecuting and charging those convicted of primary violations. This episode covers the five cases filed last month.

Three unrelated employers in Florida and Minnesota have paid a combined $6,528 in back wages to three employees for violating the paid sick leave requirements of the newly-enacted Families First Coronavirus Response Act (FFCRA), according to the DOL’s Wage and Hour Division (WHD). The agency also announced collecting $92,290 for 27 employees from an Idaho company that violated the Davis-Bacon Act, and a civil money penalty of $17,586 for a North Carolina McDonald’s franchise for violating the FLSA’s child labor requirements.

These are the cases:

Medley, Florida-based Martinez Truss Co. has paid an employee $4,352 in back wages for wrongly denying paid sick leave under the FFCRA. The employee had requested time off after their child’s school closed due to the coronavirus pandemic.
After a WHD investigation, the County of Carver, Minnesota, has paid $1,136 in back wages for violating the FFCRA by wrongly denying a worker’s request for paid leave to care for her child when her daycare center closed during the pandemic.
The Boys & Girls Club of Palm Beach County, Florida has paid $1,040 in back wages to an employee after the wage and hour agency determined that the employer violated the FFCRA’s paid sick leave requirements. WHD found that the Boys & Girls Club of Palm Beach County wrongfully denied an employee’s request for emergency paid sick leave after the worker’s doctor-directed the employee to remain at home due to coronavirus-related concerns.
Federal contractor JM Concrete Inc., based in Idaho Falls, Idaho, has paid $92,290 in back wages to 27 employees for violating the Davis-Bacon Act’s prevailing wage requirements on a government project.
Mt. Airy Partners Inc., a Summerfield, North Carolina-based enterprise operating 12 McDonald’s restaurants in North Carolina, has paid a civil money penalty of $17,586 for violating the FLSA’s child labor requirements.

These incidents demonstrate that the DOL is attentive even to “smaller” cases involving amounts as little as $1000. Should your business be prosecuted, the legal costs involved are going to be significantly higher than the penalties, and the wasted time and morale impact on your employees will be huge.

Take the time to review your wage and hour policies, including overtime, minimum wage, prevailing wage, minor payments, employment of minors, required leaves, and considerations around the FFCRA.

How Does President Trump’s New Executive Order Affect H-1B Visas?

On August 3, 2020, a Tennessee Valley Authority action prompted President Trump to issue an Executive Order that cracks down on H-1B visas by requiring federal agencies that use government contractors to scrutinize contracts awarded in fiscal years 2018 and 2019 to determine whether:

Contractors and subcontractors used temporary foreign labor for contracts performed in the United States, and, if so, to determine the nature of the work performed by temporary foreign labor on these contracts; whether opportunities for U.S. workers were affected by this hiring; and any potential effects on the national security caused by this hiring.
Contractors and subcontractors performed in foreign countries services that were previously performed in the U.S. and, if so, whether opportunities for U.S. workers were affected by such offshoring; whether affected U.S. workers were eligible for assistance under the Trade Adjustment Assistance program authorized by the Trade Act of 1974; and any potential effects on the national security caused by this offshoring.

Among other things, the EO also directs the Secretaries of Labor and Homeland Security to take action within 45 days to protect U.S. workers from any adverse effects on wages and working conditions caused by the employment of H-1B visa holders at job sites. According to the EO, it is the policy of the executive branch to create opportunities for U.S. workers to compete for jobs, including jobs created through federal contracts. These opportunities, particularly in regions where the federal government remains the largest employer, are especially critical during the economic dislocation caused by the COVID-19 pandemic, according to Trump. “When employers trade American jobs for temporary foreign labor, for example, it reduces opportunities for United States workers in a manner inconsistent with the role guest-worker programs are meant to play in the Nation’s economy,” the EO states. Each agency head that enters into contracts must assess any negative impact of contractors’ and subcontractors’ temporary foreign labor hiring practices or offshoring practices on the economy and efficiency of federal procurement and on national security. The EO directs each agency head to propose action, if necessary and as appropriate and consistent with applicable law, to improve the economy and efficiency of federal procurement and protect national security. Agency heads also must, in coordination with the Director of the Office of Personnel Management, review the agency’s employment policies to assess compliance with Executive Order 11935 of September 2, 1976, “Citizenship Requirements for Federal Employment,” and Section 704 of the Consolidated Appropriations Act, 2020. The EO further requires each agency head to submit a report within 120 days to the Director of the Office of Management and Budget summarizing the results of the required reviews, recommending, if necessary:

Corrective actions that may be taken by the agency and timeframes to implement those actions; and
Proposing any Presidential actions that may be appropriate.

In short, issuing H-1B visas when outsourcing (replacing American workers with foreign workers) is going to have a much higher level of scrutiny under the Department of Labor, the specifics of which will be made clearer in the next few months. If you are someone who uses H-1B visas currently, please take a close look at your documentation as you may soon be required to turn them over.

How Many People Will Work From Home in 2021? When Will We End the Layoffs?

A recent COVID-19 employer survey conducted by Willis Towers Watson says that a majority of North American employers expect that most of their furloughed workers will return to work by the first quarter of 2021. However, relatively few employers expect this to be the case for laid-off employees.

Even though more employees are working remotely than ever before, few companies have policies in place that could encourage this arrangement once the dust settles around the pandemic.

According to the survey, 55 percent of respondents expect most (at least three out of four) of their furloughed employees to be back at work by the first quarter of next year; however, just one in six (16 percent) expect to rehire most of their laid-off workers by then. Public health and economic recovery are two of the biggest factors in deciding which employees to bring back to work. However, employers need to adapt to having a larger percentage of remote workers—a new normal which will fundamentally change their culture.

Looking ahead, employers expect that the proportion of their workforce who are full-time employees working from home (19 percent) will be less than half of the current levels (44 percent) but nearly three times what it was last year (7 percent).

However, less than two in 10 employers (19 percent) have changed policies to encourage more remote work although 60 percent are planning or considering doing so. Only two in 10 (20 percent) have provided tools and resources to employees who may work remotely long term, although two-thirds (66 percent) are planning or considering doing so. And just one in 10 respondents (10 percent) have acted to offer employees subsidies to manage costs of working remotely while nearly three times as many (29 percent) are planning or considering doing so.

Nevertheless, roughly eight in 10 employers (79 percent) made adjustments to reflect the new protocol while more than half (58 percent) adjusted to the definition of the role of the workplace and what work should be primarily done onsite versus remotely. And nearly three in 10 employers (29 percent) made changes to move work to different jobs.

Additional survey findings include:

Over half (52 percent) of employers expect most (three out of four) workers who took a pay cut or had their workweek reduced will be back to normal levels by the first quarter of 2021.
Three in 10 employers (29 percent) have accelerated or adopted new special initiatives, such as technology rollouts, while nearly four in 10 (38 percent) have changed or are planning or considering changing where work is done to reduce supply chain risks.
More than half of respondents believe changes they have made since the pandemic began have had a positive impact on employee wellbeing (53 percent) and the employee experience (51 percent).
Most respondents have a sufficient budget to maintain and effectively deliver existing talent and reward programs (88 percent), but fewer have the budget to add critical new programs (58 percent) or adopt new technologies (49 percent).

What is in the New Q&A Released by the Department of Labor on COVID-19?

In this episode, we discuss the new Q&A released by the Department of Labor around Coronavirus, particularly with regards to labor-related scenarios. QUESTION #1: How many hours is an employer obligated to pay an hourly employee who works a partial week because the employer’s business is closed? Under the Families First Coronavirus Response Act (FFCRA), an employer has obligations to provide leave in a variety of cases. But what if you have to close your business? The Fair Labor Standards Act (FLSA) generally applies to the hours actually worked. It does not require employers who are unable to provide work to nonexempt employees to pay them for hours the employees would have otherwise worked. QUESTION #2: If an employer directs salaried exempt employers to take a vacation or leave without pay during office closures due to a public health emergency, does this impact the employee’s exempt status? No. Exempt employees who are salaried generally must receive their full salary in any week that they perform any work, subject to certain very limited exemptions. The FLSA does not require employer-provided vacation time. However, when an employer offers bonafide benefits or vacation time to their employees, there is no prohibition on an employer requiring that vacation time be taken on specific days. QUESTION #3: What are an employer’s obligations to an employee who is under government-imposed quarantine? The U.S. Department of Labor’s Wage and Hour Division (WHD) encourages employers to be accommodating and flexible with workers impacted by government-imposed quarantines. They can offer alternative work arrangements such as teleworking, work-from-home, and additional paid time off. However, they are under no obligation to retain them. If the employee is ill or is taking care of someone who is ill, this falls under the FFCRA. If a quarantine order prohibits employees from physically going to work, this falls under the answer to Question #1. QUESTION #4: How many hours per day or per week can an employee work? The FLSA does not limit the hours per day or per week that employees aged 16 or older can be required to work. However, employers must pay for overtime. QUESTION #5: Can an employee be required to perform work outside the employee’s job description? Yes. The FLSA does not limit the type of work that employees aged 18 or older can be required to perform. QUESTION #6: May an employer encourage or require employees to telework or work from home as an infection control strategy? Yes. Telework can also be a reasonable accommodation for high-risk employees (i.e. asthmatic, overweight, etc.). Employers cannot single out employees to telework or continue reporting to the workplace on a basis prohibited by any of the Equal Employment Opportunity (EEO) laws. QUESTION #7: In the event that an organization bars employees from working from their current place of business and requires them to work from home, will employers have to pay those employees who are unable to work from home? Under the FLSA, employers generally only have to pay employees for the hours they work, whether at home or at the employer’s office. However, employers must pay at least the minimum wage for at least all hours worked and at least time-and-one-half the regular rate of pay for hours worked in excess of 40 hours a week. Salaried employees must receive their full salary in any week in which they perform work with very limited exemptions. QUESTION #8: Are businesses and other employers required to cover any additional costs that an employee may incur when they work from home (i.e. internet connection, phone lines, security, electricity, etc.)? We have to break this down into those who are covered by the FLSA and those who are not. Employers have no obligation to cover expenses incurred by salaried FLSA-exempt workers. For those who are covered by the FLSA, the employer cannot be required to pay for or reimburse the employee for items that fall under business expenses if doing so reduces the employee’s earnings below required minimum wage or overtime. QUESTION #9: I am a salaried exempt employee from the minimum wage and overtime requirements under Section 13A1 of the FLSA as a bona fide executive, administrative, or professional employee. Can my employer reduce my salary during the COVID-19 pandemic or an economic slowdown? Would I lose my exempt status if my employer does so? As long as your employer changes your salary going forward, then this is not a problem. It will not result in you losing your exempt status. Any such reduction has to be predetermined rather than an after-the-fact reduction from your salary. Also, the salary change must be what is called “bona fide”, meaning that the change is not an attempt to evade the salary basis requirement and is actually due to the economic slowdown/COVID-19 situation as opposed to the quality or quantity of the work you perform.

What Do Employers Need to Know About COVID-19 Liability?

How Many Businesses Were Prosecuted by the DOL Last Month for Primary Violations?

How Does President Trump’s New Executive Order Affect H-1B Visas?

How Many People Will Work From Home in 2021? When Will We End the Layoffs?

What is in the New Q&A Released by the Department of Labor on COVID-19?

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