By Michael J. Gore
While the pandemic continues, much of the nation, including Florida, has shifted its focus on reopening. Naturally, there are a number of legal issues that businesses need to be aware of as the economy begins to restart.
We have outlined below some key considerations for businesses and employers.
1) Safety of Employees
Employers should be mindful of and comply with applicable federal, state, and local orders and guidelines regarding employee safety in the workplace. A good resource for OSHA guidance can be found here.
2) FMLA, ADA & FFCRA
The Family & Medical Leave Act (FMLA) requires certain employers to comply with notice and unpaid leave obligations for a “serious health condition.” The Families First Coronavirus Response Act (FFCRA) also requires certain employers to provide employees with paid sick leave or expanded family and medical leave for specified reasons related to COVID-19. Finally, the Americans with Disabilities Act (ADA) requires certain employers to provide reasonable accommodations to employees with disabilities. The U.S. Equal Employment Opportunity Commission (EEOC) published guidance on ADA issues in light of COVID-19, which can be found here.
Note: Generally, employers have an affirmative obligation under the ADA to engage in the “interactive process” to determine if a reasonable accommodation must be provided to the employee.
3) Paycheck Protection Program (PPP), Independent Contractors & New Hires
A PPP loan does not cover independent contractors, so payments made to an individual that an employer has reclassified as an “independent contractor” likely do not count towards loan forgiveness calculations. Also, employers may want to consider how and whether it can substitute a new hire for a recently terminated employee for purposes of the PPP.
4) FLSA Overtime & Wage Claims
With many employees continuing to work remotely, employers should remain mindful of their obligations under the Fair Labor Standards Act (FLSA), including keeping accurate time and pay records. Some previously exempt employees may have lost their exempt status if they are no longer paid a “salary” or start performing more non-exempt duties than before, which would make them entitled to overtime. Additionally, reducing the salary of a “highly compensated” employee may also cause an exemption to be lost.
Employers may decide to limit access to lunchrooms to encourage social distancing, which may result in employees eating lunch in their office. However, non-exempt employees on a lunch break should be relieved from duties and not working during lunch, which could result in unreported work time.
5) Whistleblower Claims
An employee who objects to an employer violating a law, rule, or regulation, and who suffers an adverse employment action as a result, may bring a claim for unlawful retaliation. The law, rule, or regulation could include quarantine orders related to the pandemic. Employees may also have retaliation claims for (i) overtime, (ii) workers compensation relief for an injury on the job, which may include contracting COVID-19, (iii) unsafe workplace conditions in violation of OSHA standards and guidelines, (iv) discrimination, harassment, or hostile work environment, (v) leave under the FMLA or FFCRA.
6) Qui Tam Claims Under the False Claims Act
Employees may report an employer who has used falsified information to defraud the government in obtaining PPP loans, forgiveness of the loans or otherwise used PPP loans for improper purposes.
7) Failure to Hire Claims
An employer may get sued for not bringing back an employee from a furlough, layoff, or reduction of pay if that employee had previously engaged in whistleblowing, would have been entitled to leave under federal law, or if there is some disproportionate treatment based on a protected status such as race, religion, sex, etc.
If an employee was officially terminated, the employer should re-onboard the employee as if he or she were a brand new employee. Additionally, some furloughed employees may receive more in unemployment than they would if they returned to work full-time. Employers can recall workers and terminate any who refuse to return, which can lead to loss of benefits. Some employers are deciding to increase pay above what the employee would have received staying on unemployment, especially if the employer took out a PPP loan and wants it to be forgiven.
9) Insurance Coverage
Employers should contact their agent to inquire about Employment Practices Liability Insurance (EPLI) if coverage does not currently exist. Employers should ensure that coverage extends to FLSA claims and any other types of claims that a typical EPLI policy would exclude under the policy.
Employment claims are fact-specific and handled on a case-by-case basis. The potential exposure to claims by employees is vast and the scope of these claims continues to develop. As we enter this next phase of reopening the economy, employers who are mindful of the above and discuss evolving issues with an employment attorney will be ahead of the curve and in a better position to protect their business.
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