COVID-19: Key Questions From Employers
In their Employment Law column, Jeffrey Klein and Nicholas Pappas share guidance for employers navigating the new legislation and executive orders implemented in response to COVID-19 by government entities and health care authorities.
March 30, 2020 at 11:15 AM
11 minute read
COVID-19 has resulted in a rapid flurry of new legislation and executive orders at both the federal and state levels in recent weeks, as well as additional guidance from government entities such as the CDC, OSHA, the DOL, and the EEOC. By now, most employers understand the basic rules to prevent further spread of COVID-19, such as frequent hand washing, cleaning and disinfecting frequently touched surfaces, and sending symptomatic workers home. In today's column, we address some of the more difficult and recurring questions employers are confronting in applying both pre-existing and newly enacted law in a number of areas related to COVID-19. Due to the speed at which government entities and health care authorities have implemented new legislation, executive orders, and guidance in response to COVID-19, employers should consider the guidance below in light of the most recent legal and medical authority on these issues. [See update below]
How should an employer with multiple affiliates determine if it meets the "500 employee" threshold for coverage under the Emergency Family and Medical Leave Expansion Act (FMLEA) and the Emergency Paid Sick Leave Act (EPSLA)?
President Trump signed into law the Families First Coronavirus Response Act (FFCRA) on March 18, 2020, and included therein the FMLEA and the EPSLA. The applicability of both Acts to private employers is limited to those with "fewer than 500 employees." The DOL's recent guidance on the FMLEA and EPSLA states that, "typically" a corporation (including its separate establishments or divisions) would be deemed a single employer for purposes of the 500-employee threshold, and where a corporation has an ownership interest in another corporation, the two corporations are separate employers unless they qualify as joint employers under the FLSA. U.S. Dept. of Labor, Families First Coronavirus Response Act: Questions and Answers, Q&A. The DOL further states that separate entities may be a single employer under the FMLEA if they meet the "integrated employer" test under the FMLA. In the integrated employer analysis, employers must consider such factors as: (1) common management, (2) interrelation between operations, (3) centralized control of labor relations, and (4) degree of common ownership/financial control. 29 C.F.R. §825.104(c). The DOL also stated that employers should include temporary employees who are jointly employed by the employer and another entity, regardless of whether the jointly-employed employees are maintained on the employer's payroll, but that independent contractors are not counted. Employers that conclude that certain employees are jointly employed for purposes of the FFCRA should keep in mind the potential adverse consequences for purposes of other labor laws, such as wage/hour violations by staffing agencies supplying temporary workers.
Is leave under the EPSLA in addition to leave available under applicable state law?
Section 5107 of the EPSLA states that nothing therein shall be construed to "diminish the rights or benefits that an employee is entitled to under any–(A) other Federal, State, or local law; (B) collective bargaining agreement; or (C) existing employer policy." Therefore, the paid leave granted under this new legislation is in addition to any other leave to which an employee may be entitled pursuant to an employer's policies or state or local law. Moreover, in its guidance, the DOL made clear that an employer may not deny employees paid sick leave if the employer provided paid leave for a reason identified in the EPSLA prior to the Act going into effect (April 1, 2020). The EPSLA also expressly provides that employers may not require employees to use paid leave provided by the employer before the employee may use that time provided by the EPSLA. However, the EPSLA does not preclude employers from amending their own policies. Employers may do so as long as their policy documents allow such amendments and otherwise provide the minimum leave required by the EPSLA and applicable state or local laws.
Can employers reduce employees' compensation during this period of economic uncertainty?
An extraordinary step that some employers facing a liquidity crisis are considering is temporarily reducing some or all of their employees' compensation or weekly hourly expectations, instead of engaging in layoffs. Employers generally must pay non-exempt employees only for hours worked absent a contract providing otherwise, and employers may reduce non-exempt employees' regularly scheduled hours for a variety of reasons, including reduced demand for products or services or a temporary closure. Employers also may prospectively reduce non-exempt employees' hourly wages, so long as such compensation does not fall below the applicable minimum wage.
On the other hand, employers must pay exempt employees their full salaries for any week during which they perform any work, "without regard to the number of days or hours worked." 29 C.F.R. §541.602(a)(1). They "need not be paid for any workweek in which they perform no work." Id. If employers employ exempt workers "at will" and no contract provides any right to a specific salary for a period of time, employers may prospectively reduce their salaries. The DOL's September 2019 guidance recognized this right in these circumstances: "An employer is not prohibited from prospectively reducing the predetermined salary amount to be paid regularly to a Part 541 exempt employee during a business or economic slowdown, provided the change is bona fide and not used as a device to evade the salary basis requirements." U.S. Dept. of Labor, Fact Sheet #70: Frequently Asked Questions Regarding Furloughs and Other Reductions in Pay and Hours Worked Issues (September 2019). Employers concerned about maintaining the exempt status of employees whose salaries they have reduced must also consider the minimum salary such employees must earn under the FLSA or applicable state law. If an employer reduces salaries below the applicable salary threshold (currently $35,568 under the FLSA, and higher amounts in certain states or municipalities), the employer must comply with minimum wage and overtime laws applicable to non-exempt employees.
What should employers do when an employee has symptoms of or tests positive for COVID-19?
Employers have an obligation under OSHA to maintain a workplace that is "free from recognized hazards that are causing or are likely to cause death or serious physical harm" to their employees. 29 U.S.C. §654(a)(1). To that end, employers should follow the guidance from medical professionals, the CDC, local health departments, OSHA, and the EEOC regarding how to respond to varying risks of exposure of employees to COVID-19. The CDC has published guidance titled "Interim Guidance for Businesses and Employers to Plan and Respond to Coronavirus Disease 2019 (COVID-19)" Centers for Disease Control and Prevention, in which it directs that "[e]mployees who have symptoms (i.e., fever, cough, or shortness of breath) should notify their supervisor and stay home." CDC further states "[e]mployees should not return to work until the criteria to discontinue home isolation are met, in consultation with health care providers and state and local health departments."
The CDC has published a table titled "Summary of CDC Recommendations for Management of Exposed Persons by Risk Level and Presence of Symptoms" that sets forth recommended action for "people who have been determined to have at least some risk for COVID-19." The Guidance does not answer the key question of whether an employee has "some risk for COVID-19," as the agency's table of "Exposure Risk Categories" ("High," "Medium," "Low," and "No identifiable risk") does not replace "an individual assessment of risk for the purpose of clinical decision making." Whether an employee has "some risk for COVID-19" is a factual question that employers must assess in consultation with medical professionals and public health officials.
If an employer learns that an asymptomatic employee has been exposed to someone who has tested positive for COVID-19, it must conduct a risk assessment under the CDC's guidelines to determine whether to advise the employee to remain at home. Of course, this applies only to the extent the employee is still physically in the workplace, either because the employee works for an "essential business" under the applicable stay-at-home order, or is there is no such order in effect in the relevant jurisdiction. With respect to co-workers of such an asymptomatic employee, the CDC does not currently recommend "testing, symptom monitoring or special management" for those individuals exposed to asymptomatic people with potential exposure to COVID-19 ("contacts of contacts").
However, if an employee is symptomatic, and in either the CDC's "Medium" or "High" risk category, employers should send the employee home and recommend that the employee seek medical treatment. Employers should further disclose at least to those employees known to have been in "close contact" (as defined by the CDC) with such a symptomatic employee (without disclosing the employee's name, as required under the ADA) that they may have been exposed to a symptomatic individual with COVID-19, and take any additional actions recommended by medical or health care professionals. To that end, the employer should ask the at-risk employee to identify the persons with whom the employee had close contact while symptomatic in the workplace.
What additional actions can employers take to contain the spread of COVID-19 within their workforce?
As noted above, employers should follow guidance issued from health authorities in determining measures to take to contain the spread of COVID-19. Some employers are instituting mandatory temperature checks of all employees before they enter the workplace. The EEOC views measuring body temperature to be a medical examination (U.S. Equal Employment Opportunity Comm'n, Pandemic Preparedness in the Workplace and the Americans With Disabilities Act), and the ADA prohibits such examinations of employees unless the examination is job-related and consistent with business necessity. However, the employer may conduct such an examination if it has a reasonable belief, based on objective evidence, that an employee poses a "direct threat." The EEOC's March 21, 2020 guidance on "Pandemic Preparedness" states that, due to health care authorities' acknowledgment of the community spread of COVID-19 and their attendant precautions, COVID-19 presents a "direct threat" and employers may take employees' temperatures.
Rather than implementing mandatory temperature checks, employers may instead require workers to complete pre- and post-shift questionnaires in order to collect data on employees' actions to monitor their current and recent symptoms, travel activity, social distancing and cleaning/sanitizing efforts during their time at work. Eliciting such information assists employers in keeping the workforce healthy through timely identification of immediate issues, as well as in informing any "close contacts" of such individual during the relevant time period if the employee is diagnosed with COVID-19. Employers should consider whether time spent completing such questionnaires could result in additional compensable time owed to non-exempt workers.
Are employees who are temporarily laid off (i.e., "furloughed") entitled to paid or unpaid leave under the FFCRA?
The FMLEA and EPSLA each state that compensation for paid leave must be calculated based on "the number of hours the employee would otherwise be normally scheduled to work." §§110(b)(2)(B)(II); 5110(5)(A)(ii). Many employers have taken the well-reasoned position that furloughed employees would not otherwise be scheduled to work any hours, and therefore need not be paid for leave they take under the Acts. The DOL confirmed this position in a recent update to its guidance on the FFCRA. See U.S. Dept. of Labor, Families First Coronavirus Response Act: Questions and Answers, Q&A 26 & 28,
April 3, 2020 Update: For example, on the date of the original publication of this article, the CDC updated its recommendations for community-related exposure to COVID-19. See Centers for Disease Control and Prevention, Public Health Recommendations for Community-Related Exposure (last updated March 30, 2020). As of March 30, 2020, the CDC recommends that asymptomatic individuals who have been in "close contact" for a prolonged period of time with an individual "with symptomatic COVID-19 during [the] period from 48 hours before symptoms onset until [that symptomatic individual] meets criteria for discontinuing home isolation" to stay home until 14 days after the last exposure to such individual. Id. (emphasis added). This recommendation, alongside the most up-to-date medical guidance from other public health authorities and legal guidance from government entities, should inform how employers respond to information regarding their employees' potential exposure to COVID-19.
Jeffrey S. Klein and Nicholas J. Pappas are partners at Weil, Gotshal & Manges, in the employment litigation practice group. Larsa Ramsini, an associate in the group, assisted in the preparation of this article.
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