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Here’s new guidance on COVID-19 and FLSA

by | Aug 4, 2020 | Blog

By Mike O’Brien bio For managers in charge of HR, the so-called lazy days of summer have been anything but lazy, as they strive to adapt to the COVID era and stay up to date on seemingly constant new government guidances. The Department of Labor has provided more information for employers regarding pandemic-related wage and […]

By Mike O’Brien bio

For managers in charge of HR, the so-called lazy days of summer have been anything but lazy, as they strive to adapt to the COVID era and stay up to date on seemingly constant new government guidances. The Department of Labor has provided more information for employers regarding pandemic-related wage and hour issues. Specifically, the agency answered questions about hazard pay, FLSA’s overtime and minimum wage exemptions, and what time is compensable with respect to pandemic-related telework arrangements:

  • DOL notes that hazard pay is not required under FLSA, but may be required under state or local laws, collective bargaining agreements, or company policies.
  • DOL makes clear that taking leave under the Families First Coronavirus Response Act (FFCRA) will not jeopardize an employee’s exempt status under FLSA’s executive, administrative, and professional overtime and minimum wage exemptions.
  • Moreover, exempt professionals can perform nonexempt duties during the COVID-19 public health emergency and not lose their exempt status. According to the DOL, the FLSA “regulations permit an employee who otherwise qualifies for [an overtime exemption] to perform nonexempt duties during emergencies that ‘threaten the safety of employees, a cessation of operations or serious damage to the employer’s property’ and which are beyond the employer’s control and could not reasonably be anticipated.” The current pandemic is such an event. An employer may temporarily require an exempt employee to perform nonexempt duties without risking the exemption, but must still ensure they are paid on a salary basis (at least $684 per week).

DOL also answered two questions relating to pandemic-driven telework arrangements and compensable time:

I am an employer who allows my employees to telework during the COVID-19 emergency. Now that my employees are no longer at my worksite, how do I determine their hours of compensable work? Do I have to pay my employees for hours I did not authorize them to work? Do I have to pay them for hours worked even when they do not report those hours?
Work performed away from the primary worksite, including at the employee’s home, is treated the same as work performed at the primary worksite for purposes of compensability. Therefore, you must compensate your employee for all hours of telework actually performed away from the primary worksite, including overtime work, in accordance with the FLSA, provided that you knew or had reason to believe the work was performed. This is true even of hours of telework that you did not authorize. You also must compensate your employee for unreported hours of telework that you know or have reason to believe had been performed. However, you are not required to compensate your employee for unreported hours of telework that you have no reason to believe had been performed, i.e., where you neither knew nor should have known about the unreported hours. In most cases, you may satisfy your obligation to compensate your teleworking employee by providing reasonable time-reporting procedures and compensating that employee for all reported hours.

I am an employer who allows my employees to telework during the COVID-19 emergency. I would also like to give my employees flexibility in hours of work so they can take time out of the normal workday for personal and family obligations, such as caring for their children whose schools have closed. If I allow my employees to begin work, take several hours in the middle of the workday to care for their children, and then return to work, do I have to compensate them for all of the hours between starting work and finishing work?

No. Under WHD’s broadly applicable regulation and its continuous workday guidance, all time between the performance of the first and last principal activities of a workday is generally compensable work time. However, the Department recognized that applying this guidance to teleworking arrangement would discourage needed flexibility during the COVID-19 emergency. As such, the Department stated in the Family First Coronavirus Relief Act rulemaking that an employer that allows employees to telework with flexible hours during the COVID-19 emergency does not need to count as hours worked all the time between an employee’s first and last principal activities in a workday. For example, assume you and your employee agree to a telework schedule of 7–9 a.m., 11:30–3 p.m., and 7–9 p.m. on weekdays. This allows your employee, for instance, to help teach their children whose schools are closed, reserving for work times when there are fewer distractions. Of course, you must compensate your employee for all hours actually worked—7.5 hours—that day, but not all 14 hours between your employee’s first principal activity at 7 a.m. and last at 9 p.m.

The full document is available here: https://www.dol.gov/agencies/whd/flsa/pandemic

GOP leaders unveil proposal to limit COVID lawsuits by workers. As Congress continues to wrestle with issues surrounding another COVID-relief package, Senate Majority Leader Mitch McConnell is pushing a litigation shield for employers as part of the legislation. The GOP’s proposed measure, the “Safe to Work Act,” would require plaintiffs suing for coronavirus exposure at work to meet a higher standard than is normally required in negligence cases. Employers would be liable only for failing to make “reasonable efforts” to comply with applicable public health standards and engaging in gross negligence or intentional misconduct that resulted in coronavirus exposure causing injury to the worker. Moreover, plaintiffs would have to prove such violations by a higher burden of proof—that of “clear and convincing evidence,” rather than the “preponderance of evidence” standard normally used in such cases. The measure would also allow employers to remove COVID-exposure claims from state courts into federal courts, and provide protection for unintentional violations of other employment laws. State laws providing lesser liability protections for employers would be preempted by the Safe to Work Act.

McConnell says no bill will pass the Senate without such a measure, vowing: “We’ll preserve accountability in the event of gross negligence or intentional misconduct, but we’re not going to let trial lawyers throw a party on the backs of the front-line workers and institutions who fought this new enemy on the front lines.” Critics of the legislation call it unnecessary, noting that of all pandemic-related cases filed across the nation, only a small fraction have been brought to address workplace exposure. Democrats oppose sweeping limitations on liability, arguing instead for an OSHA provision setting forth national safety standards. The proposed “Safe to Work Act” can be found in full here: https://www.cornyn.senate.gov/sites/default/files/SAFETOWORKAct.pdf

Tenth Circuit recognizes sex-plus-age job bias claims. Ready for some HR news that isn’t COVID-related? Tenth Circuit Court of Appeals has issued an opinion in Frappied v. Affinity Gaming Black Hawk, LLC, 2020 WL 4187420 (10th Cir. July 21, 2020). Frappied was a case brought by former casino workers, eight of whom were females over forty who argued their terminations were driven by job bias against older women.

Some background may be helpful here before delving into the court’s opinion. Claims of discrimination based on sex plus another characteristic are referred to as “sex plus” claims. Previous precedent had established that Title VII prohibits discrimination based on a combination of characteristics protected under the statute (for example, sex plus race). It also prohibits discrimination based on sex plus another characteristic not protected under Title VII—a recent Supreme Court opinion used the hypothetical example of an employer who fired female Yankees fans but not male Yankees fans. Such actions would still be unlawful discrimination based on sex. “Termination is ‘because of sex’ if the employer would not have terminated a male employee with the same ‘plus’ characteristic,” the Tenth Circuit observed.

Frappied presented a slightly different question, whether sex-plus-age claims are viable. Age—unlike being a Yankees fan—is a protected characteristic, but it is protected under a different statute than Title VII (the ADEA). Although some trial courts and the EEOC had already concluded that sex-plus-age claims were viable under Title VII, no federal circuit court had decided the question. The Tenth Circuit upheld sex-plus-age claims, concluding: “Discrimination against older women that does not target older men is a form of sex discrimination.” In support of its decision, the court noted: “Research shows older women are subjected to unique discrimination resulting from sex stereotypes associated with their status as older women. This discrimination is different from age discrimination standing alone.” (Internal citations omitted).

While it is too soon to know whether other federal circuit courts will follow suit, Frappied serves as yet another reminder that employers must avoid sex stereotyping and base all employment decisions on legitimate, job-related factors.

FFCRA tax withholding requirements

As employers implement the Families First Coronavirus Response Act (FFCRA) and the Coronavirus Aid, Relief, and Economic Security Act (CARES), questions may arise regarding required tax withholdings. The FFCRA and CARES Act generally do not alter employee withholding for leave pay. In other words, an employer should continue to withhold from leave pay for EFMLA and EPSLA in the same manner as other leave-related wages. That said, the employer may be eligible for a tax credit to cover the cost of the qualified leave wages paid each quarter.

The employer should continue to withhold for income taxes and the employee’s share of Social Security and Medicare taxes. The employer is then generally required to deposit those withheld amounts with the Internal Revenue Service (IRS) and file a quarterly payroll tax return that also includes the employer’s share of Social Security and Medicare taxes. Under the FFCRA and the CARES Act, an employer that pays qualified EFMLA or EPSLA is allowed to retain certain of those withholdings rather than depositing them with the IRS. Note that the retention must match the calendar quarter in which the qualifying leave payments are made. The payroll taxes that are eligible for retention include withheld federal income taxes, the employees’ share of Social Security and Medicare taxes, and the employer’s share of Social Security and Medicare taxes with respect to all employees (not just those receiving qualified leave wages). Also, note that certain qualified health plan expenses are included in the credit available to the employer.

For example, if an eligible employer paid $5,000 in qualified leave and is otherwise required to deposit $8,000 in payroll taxes, including taxes withheld from all its employees, the employer could use up to $5,000 of the $8,000 of taxes it was going to deposit for making the qualified leave payments. The employer would only be required to deposit the remaining $3,000 with the IRS on the employer’s next regular deposit date. If the employer does not have sufficient amounts available for retention to cover the cost of the qualified leave wages, the employer can file a request with the IRS for an accelerated reimbursement. Appropriate leave documentation must be retained by the employer to substantiate the credits. Also, note that the amount of qualified leave wages cannot be double counted for the calculation of other credits, such as the employee retention credit under the CARES Act.

Employers with questions regarding these issues should consult experienced legal counsel.

Employment litigation in the time of coronavirus

As employers continue to adjust to the realities of the COVID-19 pandemic, they may worry that employment-related litigation will increase. Likely categories of claims resulting from the pandemic include disability discrimination and failure to make reasonable accommodations, age discrimination, violations of leave laws, wage and hour violations, and failure to provide safe working conditions. This lawsuit tracker follows and categorizes COVID-19 litigation by state and type of claim. https://www.huntonak.com/en/covid-19-tracker.html The tracker currently shows 285 COVID-19 employment cases nationwide. The vast majority (143) of the cases allege unlawful termination. The remainder break down as follows: Unsafe working conditions/failure to provide personal protective equipment, etc. (67); ADA and state disability laws (3); Discrimination (9); Leaves of absence (15); Other (13); Retaliation (2); Wage and hour (36).

Senate Republicans are pressing for some type of immunity as part of an anticipated federal COVID-19 relief package. Democrats oppose sweeping immunity measures.