Hunton Employment & Labor Perspectives

In an effort to prevent the spread of COVID-19, many employers are permitting, and in some cases requiring, employees to work from home. One unforeseen consequence of requiring employees to work from home is some jurisdictions mandate that employers reimburse their employees for certain expenses incurred as a result of their employment. Accordingly, employers may be required to reimburse employees for reasonable expenses they incur for equipment and services necessary to work from home, such as cell phone, internet, and computer usage expenses.

COVID-19 has disrupted the global economy and employers may soon face the need to reduce expenses associated with exempt employees. Employers can place exempt employees on furlough, or, in some cases, reduce salaries and hours, without jeopardizing the FLSA exemption, but exceptions may need to be made for certain employees on work-authorized visas.

The House amended its Coronavirus Response Bill late on March 16, 2020 and sent it on to the Senate.

Paid Sick Leave Changes

 The sick leave provisions of the bill remained largely intact, and would entitle employees of employers with fewer than 500 employees to take up to 80 hours of paid sick leave for coronavirus-related reasons, including required quarantining, caring for family members with the illness, or for emergency school closings.  To review our initial summary of the bill, which includes discussion of portions of the bill that were unaffected by the technical amendments, click here.  The amendments include a $511 daily cap for leave benefits for employees with their own personal coronavirus-related medical conditions, and a $200 cap for employees caring for others with such symptoms or for school closings.

Importantly, the sick leave amendments also allow the Secretary of Labor to grant exemptions to employers where the secretary determines that imposition of the paid sick leave requirements would “jeopardize the viability of the business as a going concern.”  It also allows healthcare and emergency response employers to apply for exemptions from the Secretary of Labor so that the law would not apply to their employees.

Employers with collective bargaining agreements and union relationships know they generally cannot make unilateral changes to terms and conditions of employment.  But in an unprecedented emergency like the coronavirus (COVID-19) outbreak we are all facing, union bargaining obligations may be relaxed, either based on the terms of a collective bargaining agreement, or under National Labor Relations Board law.  As employers are forced to make ever more difficult operational decisions in the face of this emerging threat, here are some issues unionized businesses should consider when contemplating major workplace changes.

Consider Contract Terms First

 It goes without saying that employers with collective bargaining agreements should first examine the language of their contracts to determine whether they provide for any increased flexibility in decision-making during emergencies, such as a public health emergency.  If the terms of a company’s CBA specifically allow for increased operational flexibility during emergency situations, then the CBA should govern, and the employer should proceed accordingly.

In the early morning hours of March 14, 2020, the U.S. House of Representatives passed a bill to address concerns related to the spread of COVID-19 (the “Bill”).  The Senate is expected to consider the Bill shortly, and according to media reports, the Bill has the Trump Administration’s support.  Our summary below highlights provisions of the Bill related to leave.  This summary provides information regarding how the bill stands currently, but language changes or substantive amendments may still occur.  We will continue to monitor the Bill as it progresses through the legislative process and update this post accordingly.

UPDATE:  Click here to read our update on revisions made to the Bill.

Note at the outset that, as the Bill stands now, the leave provisions pertain only to employers with fewer than 500 employees.

As the national response to COVID-19 intensifies, states and localities across the country have announced school closures.  Employers should review their state and local laws to determine whether such closings may trigger an employee’s right to take job-protected, or paid leave.

State and Local Leave Allowances for School Closings

Many states have laws that require employers to offer employees paid sick leave. In each state, there are different qualifying reasons that entitle employees to take this leave.  What employers may not realize, is that some states require that employees be allowed to use paid sick leave during certain school closing scenarios.  In at least seven states, school closings caused by a public health emergency are a qualifying reason to take paid sick leave.  Those states are Arizona, Michigan, New Jersey, Oregon, Rhode Island, Vermont and Washington.

Workers’ compensation provides the exclusive remedy for injuries and illness that employees suffer arising out of and within the course of their employment.  In the early stages of this pandemic, work-related travel to high impact countries or work-related exposure in a case that was being tracked by public health authorities provided support for work-related exposure.  In healthcare settings, work-related exposure will likely be established when exposure to infected patients occurs.  But in other settings and as the diseases spreads in the United States, the analysis about whether an illness is covered by workers’ compensation will be more difficult.

Workers’ Compensation and “Ordinary Diseases of Life”:  Many states do not authorize workers’ compensation coverage for “ordinary diseases of life.”  Employers should review their own state workers’ compensation laws closely, but an ordinary disease of life is generally defined as an illness to which the general public is equally exposed, and is not a result of the peculiar or unique nature of an employee’s job.  At this stage of the pandemic within the United States, it is possible that state workers’ compensation commissions may view COVID-19 as an ordinary disease of life because untraced community infection is widespread.  In that case, an employee would not qualify for workers’ compensation, and the employer’s workers’ compensation insurance might not apply.

As reported on the Hunton Insurance Recovery Blog, many businesses rely on event cancellation insurance caused by the necessary cancellations of many marquee events.  Is your event covered?  Read more here.

As reported on Hunton’s Business Immigration Insights Blog, employers face many urgent issues in responding to the US outbreak of the novel coronavirus, COVID‑19.  Employers should remain aware that extraordinary workplace actions can have a special impact on foreign employees with work-authorized visas and can trigger additional employer obligations under US immigration law.

Read more here.

Under California law, an employee’s prior salary cannot be used to justify a pay disparity.  Now, the same is true under federal law – at least in the Ninth Circuit.

In Rizo v. Yovino, the Ninth Circuit recently ruled that an employee’s prior pay history is not a “factor other than sex” that can justify a pay gap under the Federal Equal Pay Act (“EPA”).  This outcome may not surprise employers in California, where state law expressly prohibits using prior salary as a basis for a pay disparity.  But unlike California’s statute, the federal law does not directly prohibit consideration of prior pay.  Rather, the Ninth Circuit looked beyond the plain language of the statute and examined the purpose of the “catch-all” exception, which permits pay differentials based on “any factor other than sex.” The Court concluded that this broadly worded exception “comprises only job-related factors.”