The U.S. Department of Labor’s Wage and Hour Division earlier this week published additional employer guidance regarding compliance with the FLSA during the COVID-19 pandemic (“Guidance”). The Guidance is a helpful aide in understanding general wage and hour principles during the crisis. But it leaves some questions with respect to more nuanced scenarios, and did not address some questions many employers have, such as whether temperature checks constitute compensable time under the FLSA. Below are the highlights, with additional insight on the issues the Division did not address.
- Reimbursements For Costs Associated With Telework
The Guidance clarifies that employers generally may require employees who are covered by the FLSA to pay for business expenses associated with teleworking (internet access, increased use of electricity, laptop, etc.), unless doing so reduces the employee’s earnings below the required minimum wage or overtime compensation. But there are other laws to bear in mind:
- Greater Restrictions Imposed By State Law: Many state laws require an employer to bear such costs. For example, California Labor Code Section 2802 requires employers to reimburse employees “for all necessary expenditures or losses incurred by the employee in direct consequence of the discharge of his or her duties, or of his or her obedience to the directions of the employer.”
- Greater Restrictions Imposed By Other Federal Laws: The Americans with Disabilities Act (“ADA”) imposes an additional wrinkle. Employers may not require employees to pay or reimburse the employer for such items if telework is being provided to a qualified individual with a disability as a reasonable accommodation under the ADA.
- Maintaining the Exempt Status of Salaried Employees During the Pandemic
Below are tips based on the Guidance to navigate pay deductions, mandatory use of paid leave, the performance of non-exempt job duties, and salary reductions without jeopardizing an employee’s status as exempt from overtime.
- Deductions From Pay: To maintain an employee’s status as exempt from overtime, a private employer is required to pay the exempt employee their same salary in any week in which they perform any work. This is the rule regardless of whether the employee is working from home or if a COVID-19-related emergency causes an unexpected early or mid-week office closure. Exempt salaried employees are not required to be paid their salary in weeks in which they perform no work. But employers may not deduct wages from an exempt employee’s salary for partial day absences during any week in which the employee performs any work, even if, for example, an early or mid-week emergency related to COVID-19 exposure mandates an unexpected office closure.
- Mandating Use Of Vacation Or Other Paid Leave: A private employer may direct exempt staff to take available vacation or debit their leave banks in the case of an unexpected office closure, whether for a full or partial day, provided the employees receive in payment an amount equal to their guaranteed salary.
- Performing Non-Exempt Job Duties: A salaried executive, administrative, or professional employee who is exempt from the FLSA’s minimum wage and overtime requirements under Section 13(a)(1) may temporarily perform other nonexempt duties as necessitated by the COVID-19 public health emergency without losing the exemption. Specifically, the regulations permit an employee who otherwise qualifies for a Section 13(a)(1) 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 Division opined that the COVID-19 public health emergency meets the FLSA’s regulatory criteria for emergencies. Such employees must continue to be paid on a salary basis of least $684 per week.
- Salary Reductions: An employer may prospectively reduce the amount regularly paid to a salaried employee exempt under Section 13(a)(1) for economic reasons related to COVID-19. Any such reduction must be predetermined rather than an after-the-fact salary deduction based on the employer’s day-to-day or week-to-week needs. Salary changes must not be an attempt to evade the salary basis requirements and must actually be because of COVID-19 or an economic slowdown as opposed to the quantity or quality of work the employee performed. However, employees must continue to be paid on a salary basis of least $684 per week to maintain their exempt status.
- Encourage Telework In A Non-Discriminatory Fashion
The Guidance makes clear that an employer may encourage or require employees to telework as an infection-control or prevention strategy. An employer may base its strategy on timely information from public health authorities about pandemics, public health emergencies, or other similar guidance. Of course, employers must not single out employees either to telework or to continue reporting to the workplace on a basis prohibited by any of the Equal Employment Opportunity laws, including but not limited to: disability, age, or pregnancy.
- Employer Liability For Unsafe Conditions In An Employee’s Home
The Department of Labor’s Occupational Safety and Health Administration (OSHA) previously issued a directive stating that the agency will not conduct inspections of employees’ home offices, will not hold employers liable for conditions in employees’ home offices, and does not expect employers to inspect the home offices of their employees.
Nonetheless, employers who are required to keep records of work-related injuries and illnesses will continue to be responsible for keeping such records related to a home office. As work-related injuries and illnesses are less “visible” to the employer when an employee is working from home, employers should consider updating their policies to remind employees to report such illnesses and injuries in the same manner they would if they were working in the Company’s office.
- Exceptions To The Continuous Workday Rule And Recordkeeping Obligations
Under the Wage and Hour Division’s continuous workday guidance, all time between the performance of the first and last principal activities of a workday is generally compensable work time. The Division recognizes, however, that applying this guidance to a teleworking arrangement would discourage needed flexibility during the COVID-19 emergency. An employer that allows employees to telework with flexible hours during the COVID-19 emergency for personal and family obligations does not need to count as hours worked (and compensate employees for) all of the time between an employee’s first and last principal activities in a workday.
This is relatively easy to administer when an employee agrees to set blocks of time for their teleworking schedule. For example, the employer and employee might agree on the following schedule: work 7 a.m. to 11 a.m., home school children from 11:00 a.m. to 4:00 p.m. when schools are closed, and work from 4:00 p.m. to 7:00 p.m. during weekdays. This schedule would only require the employer to compensate the employee for 7 hours of work. However, we all know that life does not always go according the schedule. For example, what happens when, during scheduled work time, an employee’s home schooling obligations cause an unexpected 20 minute break?
- The Guidance Does Not Address The Compensability Of Temperature Checks
The Guidance does not address the compensability of time employees spend undergoing temperature checks that so many employers have implemented during the pandemic. Under the FLSA, temperature checks seem most analogous to time spent on security screenings (or bag checks), which has been held noncompensable under the FLSA under the Supreme Court’s 2014 Integrity Staffing Sols., Inc. v. Busk decision. Wage and Hour Division guidance would be very helpful in confirming this point. Note, however, that several state laws will treat this question differently, including California’s.
If you have questions regarding whether your Company’s employment practices comply with state or federal wage and hour laws, contact your favorite Seyfarth attorney.