Core Wage and Hour Issues Relating to COVID-19

As the COVID-19 pandemic sweeps across the nation, it brings not only consternation related to individual health but also a plethora of issues for employers. Although this is a highly dynamic situation changing daily as various governmental agencies issue and revise guidance and Congress passes additional legislation, this article endeavors to highlight several wage and hour issues related to COVID-19. But note, given how rapidly developments are occurring, employers should seek legal counsel before acting on any information in this article.

Families First Coronavirus Response Act (“FFCRA”)

The FFCRA, applicable to employers with less than 500 employees, requires employers to provide two weeks (up to 80 hours) of paid sick leave at the regular rate to an employee unable to work because the employee is quarantined (pursuant to Federal, State, or local government order or advice of a health care provider) or because the employee has COVID-19 symptoms and is seeking a medical diagnosis. Note that recently issued CDC guidance suggests that “quarantined” means a person has been specifically directed to stay home, not a general “stay home” issued within a municipality. For more information, see Corey’s article.

The FFCRA also requires employers to provide two weeks (up to 80 hours) of paid sick leave at 2/3 the regular rate to an employee caring for an individual subject to quarantine or caring for a child whose school or day-care is closed or unavailable due to COVID-19. The FFCRA also expands on FMLA leave, providing for up to ten weeks of paid leave at 2/3 the regular rate to an employee caring for a child whose school or day-care is closed or unavailable due to COVID-19.

Furlough Pay

In general, most employment is “at-will”-thus an employer is free to send employees home without pay for a period of time, or may require employees to use acquired leave subject to the employer’s policies. But this is subject to several caveats:

• Employees must not work during furlough: If a non-exempt employee performs any work during the furlough, he or she must be compensated for that time. Similarly, if an exempt employee performs any work during the furlough, he or she must be compensated for the entire week in which work was performed. Another consideration is whether an employee is engaged in compensable “waiting time.” Employers should clarify any expectations about work to be performed during a furlough, and should consider drafting a policy about not performing work during a furlough and requiring employees to sign an acknowledgment.

• Some states require reporting time pay: Several states, including California, New York, and the District of Columbia, require employers to pay an employee for reporting to work even if the employee is sent home immediately. This would apply if employees reported to work only to learn about a furlough being implemented. However, several states also have exceptions for “acts of God” or similar force majeure issues, so employers should consult legal counsel to determine what is required in the jurisdictions in which the employer operates.

• Some states or cities require predictability pay: These jurisdictions require an employer to give advance notice of a schedule change, typically one or two weeks. Failure to do so requires the employer to provide “predictability pay” to offset the lack of notice. Of course, in light of sudden stay at home orders or other government mandates that make business operations difficult or impossible, it may likewise be impossible to provide adequate notice before implementing a furlough. Again, some jurisdictions offer exceptions for “acts of God,” so it is important to consult counsel for the specific jurisdictions at issue.

Lay-off Pay

Again, employment is generally “at-will,” but several states have a requirement to pay a last paycheck immediately upon termination of employment or within a set period of time. It is important to be familiar with the specific jurisdictions in which an employer operates to know if this applies.

WARN and Mini-WARN Acts

Though not a pay issue, employers should also be aware that instituting layoffs or furloughs may implicate the federal WARN act or state mini-WARN acts that require advance notice of layoffs.

The Bottom Line

This article highlights several potential issues, but this is only the tip of the iceberg. Each of these issues is nuanced and potentially evolving. Employers should carefully consider these issues and seek counsel to confirm any legislative/administrative changes or any jurisdiction-specific issues before taking action in response to COVID-19.