As the number of reported cases of COVID-19 coronavirus continues to increase in the U.S., many employers are implementing mandatory or optional work from home (“WFH”) policies to safeguard the health of their employees and customers, as well as to ensure business continuity. Some employers are requiring quarantine periods for employees who have travelled to or been in close contact with persons from regions with high infection rates, as well as those who have a fever or other flu-like symptoms. Other employers are instructing some or all of their workforce to work remotely until further notice. Whatever the measure, we would like to remind and assist employers enacting WFH policies to make sure they are appropriately compensating their workers in accordance with applicable federal, state, and local wage and hour laws.
As a preliminary matter, all employees must be paid for work performed at home or out of the office. Other than a few limited exceptions, exempt employees must be paid for the entire workweek during which they perform any amount of work, unless the employee is absent for personal reasons or is receiving compensation under another bona-fide plan or policy, such as for disability. If exempt employees do not perform any work in a workweek, they of course do not need to be paid. However, if any absences are due to the employer’s direction or the operating requirements of the business, exempt employees must nonetheless be paid their full weekly salaries. Additionally, in order to maintain exempt status, an employee must continue to perform exempt work as his or her “primary duty.” If the company's WFH policy causes a change in the nature of an exempt employee's job duty, company should evaluate said employee's exempt status under the new circumstances.
Generally, Employers are free to reduce their hourly, non-exempt, employees’ scheduled hours as a result of business' temporary closures or reduced demand. However, if an employee is sent home after the start of the employee's shift and after said employee has already arrived at the workplace, employers in certain jurisdictions may have to pay a certain amount of "call-in" pay. In New York, for example, certain non-exempt workers may be entitled to “call-in” pay of up to three hours at the state minimum wage rate if the worker is sent home early.
For employers considering extending their non-exempt employees’ regularly scheduled hours due to increased demand, reduced staff, etc., be aware that certain state laws require extra pay. In New York, for example, most employers are required to may an additional hour of pay at the state minimum wage rate if the worker's work day begins and ends more than 10 hours apart (including any breaktime during the day). This is known as the spread of hours pay.
When non-exempt employees work from home, it can be difficult for an employer to keep accurate track their hours, thereby increasing the risk of off-the-clock and unpaid overtime claims. To mitigate this risk and make sure all workers are paid for all of the time they worked, consider taking the following steps:
Adopt or reiterate, as applicable, a written policy requiring all workers, including those working from home, to record all hours worked accurately and contemporaneously. The policy should make clear that non-exempt workers are not authorized to perform work during unpaid break times, and they are not allowed to perform work in addition to their regularly scheduled hours without prior approval.
To maintain a consistent schedule, encourage managers to try not to communicate work related requests to non-exempt employees outside regularly scheduled hours.
Remind non-exempt employees to record time spent reading and/or responding to emails constitutes “work.”
Keep in mind that any state laws requiring paid/unpaid mandatory meal and/or rest breaks (e.g., California and New York) still apply to employees who work remotely.
Many of our clients have employees who are authorized to work under the H-1B visa. Please be reminded that, pursuant to 20 CFR 655.731(c)(7)(i) and U.S. Department of Labor guidance, an H-1B employee must be paid at least the prevailing wage according to the Labor Condition Application even if the employee is not working due to lack of work . Failure to pay the prevailing wage can lead to a determination that the H-1B is no longer valid and is subject to revocation. As such, the H-1B employee may be out of status and their presence in the United States may be unlawful. Such situations may result in the employer being fined and penalized for backpay while the employee may be ordered removed.
Learn more about the relevant employment law or immigration legal issues by contacting the author Thomas Kung or Matthew Kolodziej.
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