New Challenges for Employers, But Old Accommodation, Anti-Discrimination, Wage Laws Still Apply

In the unprecedented circumstances presented by the COVID-19 pandemic, employers contemplating bringing employees back to work are confronted with a world very different from the one that existed just over two months ago. Although the workplace experience will inevitably be altered by these new conditions, it is important that employers and workers remember that the old rules still apply. This means that employers must continue to ensure that the decisions being made and the policies being adopted in this new reality comply with existing anti-discrimination and wage and hour laws. Employers should consider training human resources employees as well as all of its workers on anti-harassment and anti-discrimination policies, and reinforcing compliance with federal, state and local wage and hour laws.

Compliance with Anti-Discrimination and Anti-Harassment Laws

As employees return to work, employers will likely be faced with making decisions about employees who have been identified as "high risk for severe complications from COVID-19" by the Centers for Disease Control and Prevention (CDC) based on age, underlying medical conditions such as chronic lung disease, heart conditions and diabetes, as well as other factors. However, employers must remain vigilant and be aware that making decisions about groups of people based on their membership in a certain class can constitute discrimination.

When formulating return to work plans, employers may consider asking all employees to first fill out a questionnaire or survey asking about COVID-19 symptoms, exposure to others with symptoms, travel and non-essential activities. As part of the inquiry, employers should consider asking employees to certify whether or not they are in a high-risk category as identified by the CDC. Any such inquiries should be made in compliance with applicable privacy and disability discrimination laws. The U.S. Equal Employment Opportunity Commission (EEOC) has indicated that "an inquiry is not disability-related if it is designed to identify potential non-medical reasons for absence during a pandemic (e.g., curtailed public transportation) on an equal footing with medical reasons (e.g., chronic illnesses that increase the risk of complications)."

Employees with COVID-19

Under the Americans with Disabilities Act (ADA), an employer can exclude an employee from the workplace if the employee poses a "direct threat" to the health or safety of other individuals in the workplace. The EEOC has indicated that, based on the guidance of the CDC and public health authorities, COVID-19 meets the "direct threat" standard. This means that a significant risk of substantial harm would be posed by having someone with COVID-19, or symptoms of it, present in the workplace. Based upon the employees' responses to the survey, employers may determine that certain employees — such as those who have tested positive for COVID-19, those who are experiencing COVID-19 symptoms and those who are still in home isolation because of actual or potential exposure to COVID-19 — may not return to work until circumstances change or until they can provide a doctor's note or other medical certification clearing them to return to work. These types of decisions should be made only after careful consideration of any guidance from the CDC and local health officials. Companies should make sure that employees are aware of the employer's return to work quarantine/isolation protocols.

Employers are likely to be faced with leave policies that do not account for lengthy absences due to quarantines and self-isolation. Employers should consider modifying paid time off and other employee policies that may be implicated when addressing coronavirus-related leaves. For instance, policies covering absence due to illness or job abandonment may be analyzed for possible temporary modification. As discussed in an earlier alert in this series, employers dealing with employees who have tested positive for COVID-19 or who were exposed to COVID-19 must carefully balance understandable employee fears about the coronavirus with the privacy rights of affected employees. (See Holland & Knight's previous alert, "Dealing with COVID-19 in the Workplace," May 15, 2020.) Employers can reassure employees by being transparent about all of the safety measures being taken, but should remind employees that discrimination and harassment of employees returning to work following COVID-19-related leave is against company policy and can constitute unlawful discrimination.

Employees at High Risk of Severe Illness

Armed with the information gathered in the survey, employers may consider creating a separate outreach for high-risk employees and providing applicable accommodations where appropriate. Under the ADA, if the employer knows or has reason to know that an employee has a disability or regards the employee as having a disability (physical or emotional), the employer has an affirmative obligation to engage in the "interactive process" to determine if a reasonable accommodation must be provided to the employee, unless the employer can prove that providing the accommodation sought by the employee would cause a hardship on the employer's business.

Although many employees who have underlying conditions that place them at a higher risk will be proactive and affirmatively seek accommodations, others may seek to return to the workplace without requesting accommodations. An employer may not exclude an employee from the workplace solely because the employee has a disability that the CDC has identified as placing that employee at a higher risk of severe illness in connection with COVID-19. Rather, an employer may do so only if such a disability poses a "direct threat" to the employee's own health that cannot be eliminated or reduced by a reasonable accommodation. The EEOC acknowledges that this is a high standard and it is not likely to be met in most cases.

Not all employers will seek to return all employees to the workplace at once and may decide to implement a phased approach in order to limit the number of employees at the location. Employers utilizing a phased approach may allow high-risk employees to continue to work from home or remain on leave until the employees feel comfortable to return or until later in the phased return process when applicable social distancing and cleaning protocols have been tested and adopted. This may be particularly true if the employee has been productive and effective teleworking for an extended period of time. Employers have an opportunity to reevaluate whether physical presence in the office is actually an essential job function and should be prepared for employees to question whether presence in the office is essential. For high-risk employees who cannot perform their jobs remotely or who wish to return to work, employers may determine whether there are reasonable accommodations, such as increased safety measures that can be taken to protect them when working onsite, including isolated workstations, additional personal protective equipment (PPE) as requested, temporary transfers to a different position, or modifications of work schedules or shift assignments.

Employee anxiety related to returning to the workplace may be high, so employers should formulate a plan and convey it to employees in advance so that employees are comfortable with the measures taken by the company. As always, employers must document their objective decision-making criteria for any employment-related decisions to protect the company from potential discrimination claims. This applies to decisions about which employees to lay off, furlough or terminate, as well as decisions about which employees to bring back or hire once the workplace reopens. Decisions to recall certain employees or to hire certain individuals cannot be based on apparent higher risk of COVID-19 complications (i.e., older or pregnant employees).

National Origin Discrimination

A disturbing consequence of COVID-19 and the characterization of the disease by many as a "Chinese virus" has been a surge of incidents involving targeting and harassment of Asians and Asian-Americans. Numerous news stories have documented the increasing number of occurrences of racial aggression, harassment and violence against Asians since the pandemic began. There is concern that this anti-Asian hostility could worsen as people begin to leave their homes. As workplaces reopen, it will be important for employers to reduce the possibility that employees, particularly those of Asian origin, are not subjected to discriminatory or harassing behavior. Employers should deter such discriminatory behavior by proactively and clearly communicating to employees that heightened fears and concerns related to COVID-19 must not be displaced and projected onto individuals because of their race, national origin or other protected characteristics. This is also an opportunity for employers to review with their employees the existing anti-discrimination and anti-harassment policies, as well as the consequences for violating those policies. Employers should also ensure that these policies, as well as any anti-retaliation policies, are up to date and that employees are aware of the employer's internal process for reporting issues involving harassment or discrimination.

Wage and Hour Considerations

Along with avoiding discrimination and harassment issues, and addressing accommodation needs, employers must ensure that they are complying with the myriad of federal and state wage and hour and wage payment laws. Wage issues may arise and vary by geographic location, industry, nature of the work performed and compensation methodology, among many other factors. Moreover, any missteps can expose an employer to widespread liability because wage payment and wage and hour issues are commonly litigated on a class or collective action basis under both federal and state law. Below are a few hot-button wage issues that employers should be prepared to face due to the impact of the COVID-19 pandemic.

Proper Timekeeping and Compensation for Teleworking Employees

Even after the stay-at-home orders are lifted, employers may choose to continue a number of the employees working remotely. Managing a remote workforce can often create concerns surrounding proper timekeeping and compensation for nonexempt employees who are responsible for self-reporting their work hours accurately in either paper or electronic form. Notably, inaccurate timekeeping by employees does not automatically excuse an employer from potential liability for failing to provide compensation for all hours worked, including overtime premiums, by an under-reporting employee. Accordingly, employers should ensure that all nonexempt employees (including salaried nonexempt employees) who work remotely accurately track and certify their work hours each pay period. Employee certifications also may be utilized to have employees certify that they have been informed of and been provided with the opportunity to take any statutorily required meal or rest breaks. Given the fact that an employer may have limited means of ensuring compliance with its timekeeping policies in a remote work setting, proper management and documentation of employees who violate such policies is particularly critical in order to minimize any potential liability.

On a related note, businesses should take care that their attempts to manage or limit overtime hours do not lead to employees working off-the-clock, which can open the door to liability under federal and state law. Although an employer may set employee schedules in a manner to avoid or minimize overtime hours — and may even require employees to obtain authorization before working overtime hours — it is important that employers ensure that an employee is paid for all hours worked, including unauthorized overtime hours. An employer may discipline employees who violate its policies, such as failing to obtain preapproval before working overtime hours, but once the time is worked, an employer must pay the employee for those hours at the applicable overtime rate.

In addition to timekeeping concerns, employers should be aware of the tools that an employee may need to telework. If employees are being required to work remotely, employers should ensure that they have a policy addressing the reimbursement of any work-related tools, supplies, services and expenditures. Although federal law does not require direct reimbursement for the expenses that an employee incurs in order to perform his or her job, many states impose expense reimbursement requirements. In some instances, expense reimbursement laws apply to nonexempt and exempt employees. Required reimbursement is not necessarily limited to typical office-related supplies and work tools, but may include costs associated with the use of personal cellphones and internet access. Even if reimbursement of telework expenses is not legally required in a particular jurisdiction, employers should consider the impact its decisions may have on employee morale and goodwill, as well as the potential for providing a union a foothold into the company.

Avoiding Misclassification of Exempt Employees

Exempt employees properly classified before the COVID-19 crisis may have temporarily or permanently lost the exempt status during the pandemic. Changes to an employee's compensation structure and/or job duties may result in the employee no longer meeting the salary basis or applicable duties test for an exemption. Exemptions are assessed on a workweek-by-workweek basis. Thus, an employee who falls out of exempt status even for a particular workweek would be entitled to overtime pay if the employee works more than 40 hours in that workweek (or more than the daily overtime trigger under certain state laws). Employers who fail to catch this and fail to pay the required overtime subject themselves to liability for overtime compensation.

Changes to an exempt employee's compensation can cause a formerly exempt employee to now fall within the definition of nonexempt employee, thereby creating the potential for a misclassification claim by that employee. This can arise where an employer reduces an exempt employee's salary, but does not consider whether or not the reduced salary meets the threshold for an applicable exemption under state and federal law. As of Jan. 1, 2020, the minimum weekly salary for an exempt employee under the Fair Labor Standards Act is $684. This amount is not reduced because an exempt employee is expected to work fewer hours or days in the workweek. State laws vary as to their minimum compensation requirements. An employer can also destroy an exemption classification if it stops paying the employee a fixed salary and instead pays the employee a fluctuating salary, particularly if the employee's salary varies by the number of hours worked. Moreover, the retail sales exemption requires an employee to receive at least 50 percent of their compensation through commissions. If, perhaps due to the economic downturn, the employee is no longer receiving the required amount of commission pay, the employee would no longer be properly classified as an exempt employee, and thus must be classified and compensated as a nonexempt employee entitled to overtime compensation.

The impact of a change in duties will vary based on the jurisdiction and applicable exemption. For example, in California, an exempt employee must perform exempt duties more than 50 percent of the time, while federal law merely requires that exempt employees "primarily" perform exempt duties without any quantifiable temporal requirement. Thus, exempt management employees who may have begun performing an increasing amount of nonexempt duties, perhaps due to staffing deficits, may no longer fall within the confines of the exemption. Moreover, employees who may have been classified as exempt pursuant to an outside sales exemption, but who are now limited to conducting sales calls or video conferences from home, may also risk losing their exemption classification because those employee no longer are engaged in sales activity "outside" of the employer's workplace, employee's home or other fixed place of business.

Challenges in Determining and Calculating Compensable Time

As employers determine whether or not to implement temperature and symptom screening and how to best practice social distancing in the workplace, it also important to consider the practical impact of such protections. For instance, an employee may need to spend time waiting to undergo screenings and may also face a delay in reaching his or her work area because of time spent waiting to access the location via an elevator. Accordingly, a common question for employers is whether they are required to pay for such waiting time, which of course will vary by jurisdiction. The U.S. Supreme Court has held that, under the federal Portal-to-Portal Act, an employer is required to pay only for such tasks that are "integral and indispensable" to the workers' main duties, and thus an employer has been held not liable for the time spent undergoing security screenings. Yet, not all states have adopted the Portal-to Portal Act. A recent California Supreme Court decision, relying on the level of employer control rather than the Portal-to-Portal Act, held that time spent waiting for security screenings is considered compensable. Temperature and symptom screenings may be treated similarly to security screenings, with the compensability of that time dependent on the state in which the employee is working. The compensability of increased time spent waiting for an elevator may also vary depending on the particular circumstances and applicable jurisdiction.

If waiting time is compensable, employers will need to identify a practical method in which to adequately capture this time. Such methods may include, but are not limited to, providing a flat amount to all employees based on a good faith estimate or relying on employees to record the actual time spent. Audits based on observations to determine the average amount of waiting time spent may be a prudent means to support an employer's estimates or to flag employees who appear to be recording excessive waiting time.

About This Series

States are easing or phasing out their stay-at-home orders. Nonessential businesses will begin to reopen and their employees will return to work. Many essential businesses that have continued to operate likely will see an increase in the number of employees returning to the workplace. But concerns about transmission of COVID-19 remain. Many states have or can be expected to impose significant obligations on employers to ensure that their workplaces remain safe and that the risk of COVID-19 transmission is minimized. This laudable objective presents many challenges to all employers.

As shelter-in-place orders are being lifted and employers are permitted to reopen their workspaces, they will need to do so with caution while wading through a patchwork of local, state and federal requirements and understanding what guidance or recommendations are mandatory.

To assist companies in their efforts, Holland & Knight has created a series of alerts focused on return-to-work issues. In addition, as state and local governments continue to issue new orders for May, Holland & Knight provides updated summaries of state and local orders to help companies keep track of regulations and requirements that are essential to all businesses.

Previous alerts in our COVID-19 Return to Work Series can be viewed below.

• Part 1: Considerations and Practicalities for Returning Employees to Work During a Pandemic
• Part 2: Maintaining a Safe Workplace: Screening Employees as They Return to Work During a Pandemic
• Part 3: New Employer Obligations in the Age of COVID-19: Safety Policies, PPE and Deep Cleaning
• Part 4: Dealing with COVID-19 in the Workplace
• Part 5: A Dedicated Pandemic Response Team Can Identify and Implement Policies Needed for a Safe Return

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DISCLAIMER: Please note that the situation surrounding COVID-19 is evolving and that the subject matter discussed in these publications may change on a daily basis. Please contact your responsible Holland & Knight lawyer or the authors of this alert for timely advice.

Information contained in this alert is for the general education and knowledge of our readers. It is not designed to be, and should not be used as, the sole source of information when analyzing and resolving a legal problem. Moreover, the laws of each jurisdiction are different and are constantly changing. If you have specific questions regarding a particular fact situation, we urge you to consult competent legal counsel.