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FLSA Implications of the Coronavirus Pandemic

On March 10, the Department of Labor’s Wage and Hour Division issued guidelines that address many Fair Labor Standards Act issues that have arisen due to the COVID 19 pandemic. This Alert identifies some of the highlights.

Employers should be sure to consult their union contracts, individual employment agreements, the Service Contract Act, state law, and local law for any apposite requirements or prohibitions.

If an employer suspends operations mid-week, for how many hours that week must an employer pay its non-exempt employees?

Under the FLSA, employers must pay non-exempt employees for all hours that they work. Non-exempt employees who don’t work because their employer has suspended operations are entitled to no pay for the hours that they would have worked.

Do exempt employees retain their exempt status if their employer directs them to take vacation, leave bank deductions, or leave without pay?

Under the FLSA, employers need not pay exempt employees for weeks in which they perform no work. But, employers generally must pay exempt employees their full salary for each week in which they perform any work. An employer may require exempt employees to use accrued leave, paid time off, or vacation time if the employer pays their full guaranteed salary. But, those employees may lose their exemption if the employer reduces their salary because the employer suspended operations during a week in which the exempt employees performed any work.

There’s an important caveat to the rule about paying exempt employees for a full week whenever they work any part of the week: If an exempt employee, for personal reasons, chooses not to work when work is available, his or her employer does not have to pay the employee in one-day increments, for the days on which the employee doesn’t work.  Thus, if an exempt employee works a full day on Monday, chooses not to work on Wednesday and Thursday for personal reasons, such as fear of COVID 19, but returns to work on Friday, the employee would be entitled only to compensation for Monday and Friday.

What are an employer’s obligations to an employee who is under government-imposed quarantine?

The FLSA does not specifically address this scenario. But, the Wage and Hour Division encourages employers to be accommodating and flexible toward employees who are subject to a government-imposed quarantine. According to the Agency, employers should consider allowing quarantined workers to work remotely or take additional paid leave.

May employers require employees to work remotely?

Nothing in the FLSA bars employers from requiring employees to work remotely. But, employers must not single out employees either to telework or to continue reporting to the workplace based on the employees’ national origin, or any other protected characteristic. Also, employers should consider reasonable accommodations for qualified employees who, due to a disability, are unable to work remotely.

Must employers pay employees their same hourly rate or salary if they work at home?

If the employer is allowing remote work as a reasonable accommodation to a qualified employee with a disability, the employer must maintain the employee’s compensation rate. So too, if the employer is subject to a union contract that mandates the compensation rate.

Otherwise, under the FLSA, employers generally must pay non-exempt employees only for the hours they actually work, whether at home or at the employer’s office. And, generally, employers must pay non-exempt employees their minimum guaranteed salary for any week in which they perform any work. Of course, employers should accurately record all hours that their employees work, including those participating in telework or other flexible work arrangements.

If an employer requires employees to work from home, must the employer pay employees who are unable to do so?

Again, under the FLSA, employers generally must (1) pay non-exempt employees only for the hours they actually work, whether at home or at the employer’s premises; and (2) pay exempt employees their guaranteed salary for any week in which they perform any work. For employees who are unable to work remotely, the Wage and Hour Division encourages employers to consider additional options to promote social distancing, such as staggered work shifts.

Must employers cover the additional costs — internet access, computer, additional telephone lines, increased use of electricity, etc. — that employees may incur if they work remotely?

Employers may not require FLSA-covered employees to bear business expenses if doing so reduces the employee's earnings below the statutory minimum wage or overtime premium. Nor, may employers require employees to bear those expenses if telework is being provided as a reasonable accommodation to a qualified employee with a disability.

May an employer be liable if it brings on temporary workers from a staffing agency that fails to comply with the FLSA?

Yes. Under the FLSA, an employee may be employed by multiple individuals or entities. If one or more of these employers are deemed joint employers, they may both be responsible— jointly and severally liable — for the employee’s required minimum wage and overtime pay. See our Alert regarding the Department of Labor’s recently promulgated joint employer regulations.

This is part of a series of Alerts that address the employment and labor issues implicated by the COVID 19 pandemic. A link to Arent Fox's Coronavirus Task Force is here. A link to our earlier analysis of the US House passing a bipartisan coronavirus relief bill is here.

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