Hurricane Headaches: HR Tips for Employers

Hurricane.jpgHurricane Dorian is approaching the Southeastern United States, and first and foremost, employers need to make sure their employees, customers, and guests are safe from the storm.

Natural disasters such as hurricanes, earthquakes and tornadoes have posed unique human resource (HR) challenges from wage-hour to FMLA leave and the WARN Act. The best protection is to have a plan in place in advance to ensure your employees are paid and well taken care of during a difficult time.

Although no one can ever be fully prepared for such natural disasters, it is important to be aware of the federal and state laws that address these situations. Our guidance can be used by employers in navigating through the legal and business implications created by events such as hurricanes.  In addition, the information may be applicable to other crises and disasters, such as fires, flu epidemics and workplace violence.

Frequently Asked Questions 

If a work site is closed because of the weather or cannot reopen because of damage and/or loss of utilities, am I required to pay affected employees?

The Fair Labor Standards Act requires employers to pay their non-exempt employees only for hours that the employees have actually worked. Therefore, an employer is not required to pay nonexempt employees if it is unable to provide work to those employees due to a natural disaster.

An exception to this general rule exists when there are employees who receive fixed salaries for fluctuating workweeks. These are nonexempt employees who have agreed to work a specified number of hours for a specified salary. An employer must pay these employees their full weekly salary for any week in which any work was performed.

For exempt employees, an employer will be required to pay the employee’s full salary if the work site is closed or unable to reopen due to inclement weather or other disasters for less than a full workweek. However, an employer may require exempt employees to use available leave for this time.

Is it lawful to dock the salaries of exempt employees who do not return to work when needed after an emergency or disaster?

The U.S. Department of Labor considers an absence caused by transportation difficulties experienced during weather emergencies, if the employer is open for business, as an absence for personal reasons. Under this circumstance, an employer may place an exempt employee on leave without pay (or require the employee to use accrued vacation time) for the full day that he or she fails to report to work.

If an employee is absent for one or more full days for personal reasons, the employee’s salaried status will not be affected if deductions are made from a salary for such absences. However, a deduction from salary for less than a full-day’s absence is not permitted.

We recommend caution, however, in docking salaried employees’ pay and suggest that you first consult with legal counsel. Moreover, many employers instead require employees to “make up” lost time after they return to work, which is permissible for exempt employees. This practice is not allowed for nonexempt employees, who must be paid overtime for all hours worked over 40 in a workweek.

What other wage and hour pitfalls should employers be aware of following a hurricane or other natural disaster?

On-call time: An employee who is required to remain “on call” at the employer’s premises or close by may be working while “on call,” and the employer may be required to pay that employee for his “on call” time. For example, maintenance workers who remain on the premises during a storm to deal with emergency repairs must be compensated — even if they perform no work — if they are not free to leave at any time.

Waiting time: If an employee is required to wait, that time is compensable. For example, if employees are required to be at work to wait for the power to restart, that is considered time worked.

Volunteer time: Employees of private not-for-profit organizations are not volunteers if they perform the same services that they are regularly employed to perform. They must be compensated for those services. Employers should generally be cautious about having employees “volunteer” to assist the employer during an emergency if those duties benefit the company and are regularly performed by employees.

Can employees affected by a hurricane seek protected leave under the Family and Medical Leave Act (FMLA)?

Yes, employees affected by a natural disaster are entitled to leave under the FMLA for a serious health condition caused by the disaster. Additionally, employees affected by a natural disaster who must care for a child, spouse or parent with a serious health condition may also be entitled to leave under the FMLA.

Some examples of storm-related issues might include absences caused by an employee’s need to care for a family member who requires refrigerated medicine or medical equipment not operating because of a power outage.

If a work site or business is damaged and will not reopen, what notice must be provided to affected employees?

The Worker Adjustment and Retraining Notification (WARN) Act, a federal law, imposes notice requirements on employers with 100 or more employees for certain plant closings and/or mass layoffs. However, an exception exists where the closing or layoff is a direct result of a natural disaster.

Nonetheless, the employer is required to give as much notice as is practicable. If an employer gives less than 60 days’ notice, the employer must prove that the conditions for the exception have been met. If such a decision is contemplated, it is advisable to consult with legal counsel about the possible notice requirements to ensure compliance with the WARN Act.

Our HR department has been disrupted, and it may be weeks before things are back to normal. Will the government extend any of the customary deadlines governing employer payment for benefits, pension contributions and other subjects during this recovery effort?

During previous natural disasters, particularly Hurricane Sandy and Katrina, many governmental agencies and entities extended the deadlines for certain reports and paperwork. Therefore, it is expected that with future natural disasters, the government will provide some deadline extensions, but, as with every natural disaster, the government’s response will vary.

Regardless of what extensions may be granted, employers should be fully aware of state laws and implement any policies or plans necessary to minimally interrupt the payment of wages to their employees.

Employees from other states want to donate leave to affected employees. Is this lawful?

Yes. Employers can allow employees to donate leave to a leave bank and then award the donated leave to the affected employees.

Disaster Preparation Checklist

  • Identify and notify those employees whom you believe should be deemed “emergency services personnel” and will be required to work during a storm or evacuation order. Make arrangements for providing these employees with food and shelter. Make sure to have procedures in place for the evacuation of these employees if the hurricane or other disaster causes the workplace to become unsafe.
  • Identify your “essential employees.” These are employees whom you cannot require to be at work during a natural disaster but you believe are vital to the continued operations of your company. Determine what incentives you can provide to these employees to entice them to work during a disaster or to return to work as soon as possible. These incentives can include shelter, hot meals, fuel and arrangements for family members.
  • Establish a contingency plan to address the needs of those employees who may be temporarily living in company facilities during a storm or disaster. Ensure that you can provide such necessities as gas, food and shelter to these employees.
  • Review your existing policies to determine how to distribute paychecks to employees who cannot come to work because of adverse weather conditions or a lack of power.
  • Establish a communication plan. This will include identifying ways to keep the lines of communication open with your employees even if power is out in the local community. Collect primary and secondary contact sources from your employees. Consider establishing a toll-free phone line, through which employees can obtain updated information regarding the company’s status during an emergency.
  • Review applicable leave policies and procedures to address and allow for disaster-related leave requests, including how such leave will be treated (i.e., paid or unpaid).
  • Formulate a team of decision makers who will have authority to make crucial decisions related to other human resource matters in the midst of the hurricane or other disaster. This team should establish a method of communicating with each of its members during the hurricane.
  • Review any existing employee assistance programs and ensure that employees know how to utilize these programs during the aftermath. A successful program can promote the fast and efficient return of your employees.
  • Remember to be sensitive to the needs of your employees who have experienced extensive property damage or personal devastation. Always keep in mind that human life and safety trumps all other business necessities.

Natural disasters can pose a myriad of HR challenges for employers. While many employers are working around the clock on recovery efforts, other employers find themselves unable to function for extended periods of time because of damage or loss of utilities.  The economic effects of a natural disaster will have long-term consequences on businesses in the affected region.

 

DOL Opinion Letter Clarifies One-Month Representative Period under Section 7(i) Overtime Exemption for Retail and Service Industry Employees

stack of moneyOn September 10, 2019, the U.S. Department of Labor (DOL) issued a new Opinion Letter providing clarity on the Fair Labor Standards Act’s (FLSA)’s Section 7(i) retail or service establishment overtime pay exemption that commissions on goods or services represent more than half an employee’s compensation for a representative period of not less than one month

The FLSA Section 7(i) exempts Continue reading

Third Circuit Rebuffs Pension Fund’s Attempt to Assess Partial Withdrawal Liability

Under the Multiemployer Pension Plan Amendments Act (“MPPAA”), an employer can be liable to a multiemployer pension fund if it partially withdraws from that fund either by reducing its contributions by 70 percent over a three-year period, or where “there is a partial cessation of the employer’s contribution obligation.” 29 U.S.C. § 1385(a).

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A “partial cessation” can occur in two different ways. The first is through a so-called “CBA take-out,” where the employer ceases to have an obligation to contribute under one or more, but fewer than all, of its collective bargaining agreements (“CBA”)s. The second is a “facility take-out,” where the employer ceases its obligation to contribute with respect to work performed at one or more, but fewer than all, of its facilities. In either case, the employer must continue to perform the work for which contributions were previously required. See 29 U.S.C. § 1385(b)(2)(A).

In a recent case, the Third Circuit Court of Appeals rebuffed a multiemployer plan’s attempt to broaden the application of the CBA take-out provision. Instead, in Caesar’s Entertainment Corp. v. International Union of Operating Engineers Local 68 Pension Fund, Case No. 18-2465 (3d Cir. Aug. 1, 2019), the Court Continue reading

[Webinar] Strategies for Success in Collective Bargaining

On Wednesday, September 18, 2019 at 1:00 PM Eastern, Kara M. Maciel and Mark M. Trapp of Conn Maciel Carey will present a complimentary webinar regarding “Strategies for Success in Collective Bargaining.”

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This webinar will focus on strategies for success in your company’s next contract negotiations. Specifically, we will discuss how to effectively prepare for collective bargaining, as well as successful execution of the company’s strategy at the table, with particular emphasis on “big ticket” items such as withdrawal liability and ongoing participation in a multiemployer fund, maximizing savings on wages and benefits and regaining flexibility in the workforce.

Participants will learn about the following: Continue reading

Seventh Circuit Hits the Brakes on Pension Fund’s “Deceleration” Attempt

In a rare win for employers, the Seventh Circuit recently held that ERISA’s six-year statute of limitations barred a multiemployer pension fund’s claim for withdrawal liability against the withdrawn employer.

The case, Bauwens v. Revcon Tech. Group, Inc., No. 18-3306 (7th Cir. 2019), involved an increasingly common scenario, namely, where a pension fund holds a withdrawn employer in “default” for missing an installment payment of its withdrawal liability and failing to cure for sixty days after notice.

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In such an instance, the Multiemployer Pension Plan Amendment Act (“MPPAA”) allows the fund to “require immediate payment of the outstanding amount” of the employer’s withdrawal liability. See 29 U.S.C. § 1399(c)(5).

In Bauwens, the company fell into default five separate times over the course of twelve years; but each time entered into a settlement agreement with the fund to resume installment payments in exchange for the fund dropping its collection suit seeking the entire accelerated amount. Finally, on the sixth such default, the fund again brought a collection suit, to which the employer asserted ERISA’s six-year statute of limitations. The court held Continue reading

EEO-1 Component 2 Data Submission Deadline Fast Approaching

As we reported back in March, Judge Chutkan of the U.S. District Court for the District of Columbia lifted the stay on the Equal Employment Opportunity Commission’s (“EEOC’s”) 2016 final rule mandating that employers who are required to submit an annual Employer Information Report (“EEO-1”) also submit pay data by sex, ethnicity, and race.  This additional piece of the EEO-1 Report has come to be known as “Component 2.”  After EEO-1the Judge lifted the stay, the EEOC responded that it would not be in a position to accept the EEO-1 Component 2 by May 31, 2019 – the deadline to submit the standard data set collected through the EEO-1 Report (“Component 1”) – and adjusted the deadline to submit Component 2 data to September 30, 2019.  Judge Chutkan reluctantly accepted this timeline and mandated that two years of data be collected by this date.  Accordingly, the EEOC provided notice that it would be requiring employers to submit pay data for calendar years 2017 and 2018 by or before September 30, 2019.

Despite the fact that collecting this data could be very burdensome for employers, the EEOC’s deadline provided only a matter of months in which to gather and submit it.  Now, with just over a month to spare, covered employers must ensure they understand what data needs to be submitted, how to tabulate the data for submission, and how to ultimately submit the data to the EEOC. Continue reading

D.C. Circuit Raises Bar For Employers to Defend Discrimination Complaints

On May 10, 2019, the D.C. Circuit issued its opinion in Figueroa v. Pompeo, 923 F.3d 1078 (D.C. Cir. 2019), raising the bar for employers to articulate legitimate non-discriminatory business reasons for taking alleged unlawful actions against plaintiffs.  shutterstock_complaintAs we explained in a prior post, under the McDonnell Douglas burden shifting framework, after the plaintiff makes his/her prima facie case of discrimination, the employer has an opportunity to rebut plaintiff’s prima facie case by articulating legitimate non-discriminatory business reasons for taking the alleged discriminatory action.  And, if the employer is able to do that, the burden shifts back to the plaintiff to show that the employer’s stated reasons are a pretext for discrimination.  Figueroa now makes it more difficult for employers to successfully argue that the actions they took were for legitimate non-discriminatory business reasons.  So, what happened in the case, and what should employers do going forward?

The facts of the case are straightforward.  Figueroa, a Puerto Rican employee, alleged that his employer, the State Department, discriminatorily passed him over for promotions.  At the trial court level, the State Department moved for summary judgment, claiming that it did not discriminate against Figueroa, but rather decided not to promote him because other candidates were better qualified.  The State Department explained that candidates for promotion are ranked based on substantive criteria called “core precepts.”  These precepts consist of six performance areas: (1) leadership skills; (2) managerial skills; (3) interpersonal skills; (4) communication and foreign language skills; (5) intellectual skills; and (6) substantive knowledge.  The State Department explained that, although Figueroa

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