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.

 

California Legislature Embraces the Dynamex Standard for Evaluating Independent Contractor Arrangements

The California legislature is considering a bill that would codify in the Labor Code and Unemployment Insurance Code the California Supreme Court’s decision in Dynamexshutterstock_litigationwhich adopted a standard that made it significantly more difficult for employers to classify workers as independent contractors, ignoring the realities of the modern workplace and gig economy.  Assembly Bill 5 was introduced back in December 2018, and has passed the Assembly and is making its way through the Senate. 

As this blog previously noted, last year the Supreme Court in Dynamex interpreted the definition of “employee” under the California Wage Orders as placing the burden on the hiring entity seeking to characterize a worker as an independent contractor to establish each of these three factors: (A) that the worker is free from the control and direction of the hiring entity in performing the work; (B) that the worker performs work that is outside the usual course of the hiring entity’s business; and (C) that the worker is customarily engaged in an independently established trade, occupation or business of the same nature as the work performed.  This is known as the “ABC test.”

For years prior to the Dynamex decision, the California courts Continue reading

U.S. Department of Labor Receives Close to 60,000 Comments to its Proposed Overtime Rule Raising the Minimum Salary Threshold for Exempt Workers

Increasing Money GraphOn March 22, 2019, the U.S. Department of Labor (DOL) released its proposed rule to raise the annual salary threshold for a worker to qualify as exempt under its “white collar” regulations from $23,660.00 to $35,308.00.  The public comment period closed yesterday, May 21, 2019, with almost 60,000 comments from the business and worker communities.

History of the Proposed Rule

The road to a final rule over the salary threshold has been long and bumpy for the DOL.  In 2014, President Obama directed the DOL to “update and modernize” the existing Fair Labor Standards Act’s (“FLSA”) white collar exemptions.  Two years later, the DOL released its final rule revising the regulations by doubling the salary threshold to $47,476.00.

The final rule dramatically increased the number of workers who would qualify for overtime pay, forcing every employer in the country to carefully assess how to handle the additional financial burden. Continue reading

Pay Equity and EEO-1 Reporting Remain a Priority of Federal Regulators

Pay inequity, particularly compensation disparity based on sex, has become a very prominent political issue in the last decade and it looks like some additional changes could be on the horizon at the federal level.  Demshutterstock_532208329ocrats expressed that pay equity would be a priority in their labor agenda during the 2018 Congressional election cycle and, in February 2019, a proposal intended to further promote fair pay practices was reintroduced in Congress.   In addition, just last week, a federal judge lifted the stay on the changes to the Equal Employment Opportunity Commission’s (“EEOC”) EEO-1 Report.  The revised EEO-1 report would require certain employers to provide pay data by sex, race, and ethnicity to the EEOC, allowing it to more easily detect and track impermissible pay differentials.  Though at very different stages in their respective lawmaking processes, the proposed law and final regulation are very clearly intended to address pay inequality and provide additional enforcement tools.

Stay Lifted on EEO-1 Report

In August 2017, ahead of the 2018 submission deadline, the Office of Management and Budget (“OMB”) stayed collection of pay data based on race, ethnicity, and sex to allow it to review the regulation related to the lack of public opportunity to comment on the format of submission of the additional data and burden estimates related to the specific data file format provided.  However, on March 4, 2019, a Washington, D.C. federal judge ordered the stay be lifted because she determined that OMB’s decision was arbitrary and capricious – citing unexplained inconsistencies based on its prior approval of the rule and failure to adequately support its decision.  Continue reading

DOL Revises Field Operations Handbook to Clarify Interpretation of FLSA’s Dual Jobs Regulation

Department of LaborThe U.S. Department of Labor (“DOL”) has officially curtailed another controversial interpretation of its dual jobs regulation that has plagued employers for more than decade – i.e. the 20% rule.  This is welcome news for the hospitality industry and other employers who employ tipped employees, as the previous rule effectively forced employers to track and monitor the time that tipped employees spent on non-tipped tasks and “related duties.”  Although the DOL issued an opinion letter rescinding its interpretation of the 20% rule in November 2018, the DOL’s recent revisions to its Field Operations Handbook has official dispelled lingering concerns about the DOL’s interpretation of the Fair Labor Standards Act’s dual jobs regulation and potential enforcement of the 20% rule.

The Tip Credit

Under the federal Fair Labor Standards Act (“FLSA”), employers must pay employees a minimum wage of $7.25 per hour. Various state wage and hour laws impose higher minimum wage requirements, but employers covered Continue reading

California Employment Law Update for 2019 

By: Andrew J. Sommershutterstock_150165167

In the final days of California’s 2018 legislative session, and the end of his term, Governor Jerry Brown has signed into law a variety of employment bills, including a flurry of new legislation seeking to bolster the state’s workplace harassment laws in the aftermath of the #MeToo movement.  Conn Maciel Carey LLP provides this summary of key new employment laws impacting California private sector employers.  Unless otherwise indicated, these new laws just took effect on January 1, 2019.

#MeToo Legislation

Expanded Anti-Harassment Training Requirements

Existing law requires that employers with 50 or more employees provide at least two hours of sexual harassment training to all supervisory employees within six months of the individuals becoming supervisors, and at least once every two years thereafter.  Covered employers must provide classroom or other effective interactive training that incorporates the topics of sexual harassment and abusive conduct as well as harassment based on gender identity and expression and sexual orientation.

Senate Bill (SB) 1343 broadly expands the harassment training requirements to small employers and for the first time requires training of non-supervisory employees.

Continue reading

DOL Says Goodbye to the 80/20 Rule for Tip Credits

On November 8, 2018, the Department of Labor (DOL) issued an opinion letter retracting the controversial “80/20 rule” for tipped employees.  shutterstock_losing moneyUnder this rule, if a tipped employee spent more than 20% of his or her working time performing “non-tipped” duties, his or her employer could not take a tip credit for time spent performing those non-tipped duties.  The rule caused years of confusion, especially among employers.  After all, what duties exactly qualified as “non-tipped”?   Would folding napkins in between waiting tables count?  And were employers expected to track every second of an employee’s day to determine if those non-tipped duties exceeded 20% of the total workday?

Under the DOL’s latest opinion letter on this issue, it has made clear that the it “do[es] not intend to place a limitation on the amount of duties related to a tip-producing occupation that may be performed, so long as they are performed contemporaneously with direct customer-service duties and all other requirements of the [Fair Labor Standards] Act are met.”  Accordingly, employers should be able to breathe at least a sigh of relief.  So how did we get here, and what should employers be able to expect in the new year?

By way of background, under the Fair Labor Standards Act (FLSA), “tipped employees” are defined as Continue reading