First Up: DOL Expands Overtime Exemption for Commission-based Retail and Service Workers

We all know that retail has been hit hard by the pandemic. When retail employees paid on a commission basis do go back to work, fewer of them will qualify for overtime, thanks to a Department of Labor (DOL) rule promulgated on Monday, May 18, 2020. While this sounds like a bad deal for employees, there’s a silver lining: the DOL issued another rule just today that will make compensating employees for staggered shifts and fluctuating workweeks easier—practices that are likely going to be critical components of a safe COVID-19 return-to-work plan in retail.

Monday’s final rule withdraws 60-year-old interpretive rules that limited employers’ ability to invoke Section 7(i) of the FLSA, which exempts certain commission-based employees in “retail or service establishments” from overtime eligibility. To qualify for the exemption, a business needs to show: (i) it is a retail or service establishment, as defined by the regulations; (ii) the employee’s regular rate of pay exceeds one and one-half times the applicable minimum wage for every hour worked in a workweek in which overtime hours are worked; and (iii) more than half the employee’s total earnings in a representative period must consist of commissions.

Continue Reading DOL Adopts Two Significant Changes to “Modernize” Overtime

Employers, as you plan for a safe return to work, there are several critical protocols and practices to consider. Below you will find a Return to Work (RTW) Checklist, created by the Kelley Drye Labor and Employment team, to help you navigate getting back to work effectively. If you have any questions or need more information, please contact Barbara Hoey and Mark Konkel.

Continue Reading Employer’s Return to Work Checklist: Practices and Policies

The Internal Revenue Service (“IRS”) recently issued guidance relaxing several cafeteria plan rules to help employees deal with unanticipated COVID-19 expenses. Employers that sponsor cafeteria plans will need to decide whether to amend their plans to adopt these optional rule changes. We have summarized the rule changes below, including some important employer considerations.

Note that the IRS also issued recent guidance clarifying the retroactive application of CARES Act relief for high deductible health plans and extending the period in which premium expenses may be reimbursed. These changes will be addressed in a separate post.

Continue Reading IRS Issues Cafeteria Plan Relief, Providing Employers Significant Discretion

The uncertainties surrounding the COVID-19 pandemic have made it difficult for employers to predict the long-term impact of the pandemic on their businesses. In response, many employers are looking for ways to preserve cash reserves by reducing or deferring benefit and compensation costs, without taking the more drastic step of permanently reducing their workforces. We have summarized below some of the near term cash preservation measures that employers might consider with respect to their benefit and compensation arrangements.

Continue Reading COVID-19: Employee Benefit Measures for Preserving Cash and Saving Jobs

As businesses all over the country prepare to open up and welcome employees back to work – even while the pandemic rages on – there remains a high degree of uncertainty concerning how to keep employees safe, especially those who may be at higher risk because of age or a medical condition.  Adding to employer angst over this issue, the EEOC, the agency charged with interpreting the discrimination laws, found it necessary last week to issue guidelines and then clarify its own statements within just two days.  On Tuesday, May 5, 2020, the EEOC issued new “Return to Work” guidance, but then pulled it down within 24 hours.  On May 7, 2020, it issued updated guidance, which focused on how employers should handle return to work issues, but with special emphasis on how they should treat “high risk” employees.

One major takeaway from the guidance is that employers cannot exclude high risk employees from the workplace just because there is a concern about COVID-19 exposure.  Andrew Maunz, EEOC Legal Counsel stated, “It is important that employers understand that the ADA does not allow them to act against employees solely because the employee has a CDC-listed underlying medical condition.”

Continue Reading Reentry Worries And The EEOC’S Latest Return To Work Guidance

It is a virtual certainty that lawsuits from employees will increase, and likely with emphasis on whistleblower and retaliation claims as states reopen and more employees return to work. Employers need to think ahead and be ready for this wave of litigation.

There are many reasons why the COVID-19 pandemic could lead to these claims.  First, the world is dealing with a new and highly contagious virus and we are in uncharted waters. No one knows what measures must be taken to keep workers safe, or whether there will be other explosions of the virus in workplaces.

Second, the economy is bad and jobs are scarce. Employees who feel that they are at risk of termination or layoff will try to protect their jobs or shield themselves. Some will resort to whistleblowing about health and safety or other public policy issues, while others will might allege individual retaliation claims against their employer. Employers in highly regulated industries, like healthcare, energy, and consumer goods see whistleblowing complaints regularly, but as we move forward, these types of complaints will likely increase and extend beyond these industries.

And finally, the plaintiffs’ bar is hungry. Courts have been closed and cases stalled—they sense blood in the water and will strike. Continue Reading Preparing for COVID-19 Whistleblower and Retaliation Claims

In response to the increased media presence in hospitals, the Department of Health and Human Services (“HHS”) issued guidance this week reminding health care providers that the COVID-19 outbreak does not change HIPAA’s privacy rules with respect to giving the media access to treatment areas. The guidance reinforces and amplifies existing HHS guidance by providing examples of its application to the COVID-19 public health emergency.

A patient receiving treatment in a health care facility is typically surrounded by protected health information (“PHI”), which includes health information in any form or medium (e.g., oral communications, life function monitors, charts, etc.). HHS’s guidance provides several examples of PHI in treatment areas, including how the mere presence of a patient in the area of a health care facility dedicated to treating a specific disease, such as COVID-19, reveals the patient’s diagnosis. As such, members of the media entering a health care facility’s treatment areas immediately have access to PHI they can see, hear and record.

Continue Reading HIPAA Compliance Failures Make for Bad Television

In response to the COVID-19 outbreak, the Department of Labor (the “DOL”) recently issued guidance providing relief to employee benefit plan participants and administrators facing challenges in complying with various administrative requirements and deadlines. We have summarized below how this latest DOL guidance seeks to addresses those challenges.

First, in a notice jointly issued with the Internal Revenue Service (the “IRS”), the DOL extended the timeframes for participants to exercise certain rights, file claims and appeal denied claims. Second, in a separately issued notice, the DOL extended the time for administrators to furnish certain notices and disclosures, as well as relaxed the enforcement of other administrative requirements. Both notices apply with respect to a relief period starting March 1, 2020 and ending 60 days after the end of the federally declared national emergency for the COVID-19 outbreak, subject to a 1 year limit (the “Outbreak Period”).

Continue Reading COVID-19: DOL Issues Administrative Changes for Employee Benefit Plans

A recent ruling by the U.S. Department of Labor (DOL) signals the start of the forecasted avalanche of government claims and civil litigation arising from the COVID-19 pandemic and related emergency legislation.  Investigators from the DOL’s Wage and Hour Division (WHD) found that the employer Discount Tire Centers failed to pay its employee paid sick leave pursuant to the newly passed Emergency Paid Sick Leave Act (EPLSA), which requires certain employers to provide up to 80 hours of paid sick leave to employees who need to take leave from work for specified reasons related to COVID-19.

Based on the investigatory findings, the DOL ordered Discount Tire Centers to pay the employee’s full wages of $2,606 for two weeks of leave covering the hours the employee spent at home after the company received documentation of his doctor’s instructions to self-quarantine.  Discount Tire Centers also agreed to fully comply with the Families First Coronavirus Response Act (FFCRA)—the main legislation that includes the EPSLA and expands the Family and Medical Leave Act—which went into effect on April 1, 2020.

The DOL’s ruling underscores the importance of employers staying abreast of the ever-unfolding regulatory landscape during the COVID-19 pandemic.  Companies must adapt their payroll and personnel policies and procedures to ensure real-time compliance with the new legislation while remaining vigilant in their adherence to long-standing laws governing employer-employee relations.

With the reopening of state economies and return-to-work on the horizon, on April 23, 2020, the EEOC issued new guidance on workplace testing for COVID-19.

The EEOC’s guidance confirms that “employers may choose to administer COVID-19 testing to employees before they enter the workplace to determine if they have the virus” because “an individual with the virus will pose a direct threat to the health of others.”

  • Is this a magic bullet for employers? Unfortunately, no. There are still a lot of grey areas when it comes to COVID-19, especially as more of your employees return to work.
  • Should employers require a negative-result test for all employees seeking to return? The answer is also no, because in most areas of the country, testing is either not readily available, or is only available to people in certain high-risk occupations. So, obtaining a test may be impossible for many workers. Additionally, a negative-result test is of limited value because it only shows that the person was negative on that day.
  • Who should be required to produce a negative-result test? If an employee was COVID-19 positive and has recovered and/or is residing with someone who was positive, then it does make sense to require that employee to produce evidence that they are negative before returning to work. This was also permitted under earlier EEOC guidance, which allowed employers to request a doctor’s note before an employee’s return to work.
  • What if that employee cannot get tested? This is a grey area. The EEOC recommends employers to be flexible, but offers little guidance about what that means. Employers who allow once-tested-positive employees to return to work without first obtaining a negative-result test are opening themselves to potential lawsuits by co-workers who work in close proximity to the sick employee.

My gut advice—make the once-tested-positive employee produce a negative test result before allowing them back to work. As a litigator and an employer, I would rather risk a claim by the once-tested-positive employee about his delayed return to work, than a claim by infected co-workers.

For more practical guidance, check out recordings of Kelley Drye’s webinars Part 1: Getting Back To Work: Preparations and Considerations for Employers and Part 2: Getting Back To Work: When the Rubber Hits the Road, where we address additional practical and legal challenges facing employers in a world where the coronavirus threat has been managed, but hasn’t disappeared.