Coronavirus: How to properly pay employees in the event of a pandemic

Franczek P.C.
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Franczek P.C.

The anticipated spread of coronavirus in the U.S. has many employers revisiting their emergency response plans. Depending on guidance from public health officials, some employees may be directed to work from home, temporarily furloughed, or work a reduced schedule. Some managers and executives may be pressed into service to perform more manual or routine tasks.

To paraphrase a favorite sign in my office, this is not the Department of Labor’s first rodeo, and there is existing guidance under the Fair Labor Standards Act’s (FLSA) implementing regulations on how employees must be compensated in these situations. Let’s look at some of the wage/hour issues presented when a business must alter its operations due to a public health emergency.

Must non-exempt employees whose work schedule is reduced due to a temporary closure be paid their regular schedule?

No, not under the FLSA at least. The FLSA sets no minimum hours requirement, only requirements with respect to how much hourly and salaried non-exempt employees must be paid for the hours they do work. State and local law and collective bargaining agreements may have their own minimum hours or “show up pay” requirements, however.

Must exempt employees like executives and supervisors be paid if they do not work due to a temporary closure?

As long as the executive, supervisor, or other exempt employee works part of the week, they must be paid for the entire workweek.  However, if an executive, supervisor, or other exempt employee is completely relieved of duty during the temporary closure, the employer can elect not to pay them for that workweek.

Must exempt employees be paid if they miss work due to illness or personal circumstances related to a disease outbreak?

If an exempt employee misses a full day of work for personal reasons, the FLSA permits the employer to deduct a full day of pay from the employee’s salary. If an employee is absent for a full day due to personal illness, an employer can deduct from the employee’s salary if it has a policy providing for paid sick leave. Generally, any deductions must be in full-day increments. The exception is FMLA leave—if an employee is absent for part of a workday and the absence counts as FMLA leave, the employer can deduct from the employee’s salary in partial-day increments. Finally, unless otherwise provided by state or local law, employer policy or contract, employers can generally require employees to use available paid leave such as vacation or sick leave to cover even partial-day absences.

Is there a limit on the number of hours per day or week that an employee can be required to work in the event of an emergency?

Again, the answer is no, not under the FLSA, so long as the employee is at least 16 years old.  State and local law may place limits on scheduling, however. In Illinois, non-exempt employees generally cannot be required to work more than six consecutive days. There is a specific exception for employees who are “needed in case of breakdown of machinery or equipment or other emergency requiring the immediate services of experienced and competent labor to prevent injury to person, damage to property, or suspension of necessary operation”.  Consult with legal counsel to vet these scenarios.

What happens if an executive, supervisor, or other exempt employee is called upon to perform non-exempt work to keep the business running?

An exempt employee does not become non-exempt when they must perform non-exempt work because of an emergency.  Note, however, that emergencies do not include events that are within the employer’s control and those that can be addressed in the normal course of business. Instead, emergencies occur rarely and include those events that cannot be reasonably anticipated. They may include, amongst other things, threats to employee safety, a cessation of operations, or serious damage to the employer’s property.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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