Q&A: Employment Issues During the Pandemic

March 29, 2020

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Q. What legal steps are employers required to take to protect their workforce during the COVID-19 outbreak?
Mastrocola: Ultimately, employers are responsible for the health and safety of their employees in the workplace. Employers have broad discretion to take reasonable steps for the protection of their workforce from illness, including COVID-19, providing they remain complaint with federal and state employment laws. Given the extent and potential severity of the COVID-19 pandemic, employers may take measures such as directing sick employees to stay away from the workplace; monitoring sick employees and tracking their contacts with other employees, customers and business associates; limiting visitors to the workplace; and closing offices while requiring employees to work remotely, if possible.

Q. Can employers force workers who appear sick to stay away from a work site?
Mastrocola: Yes. Employers can instruct employees who appear sick not to report to the worksite for the safety of other employees and guests. In doing so, employers should apply consistent standards in determining whether employees appear ill based on presence of certain known symptoms of COVID-19, including high body temperature. In fact, although measuring body temperature is considered a medical examination, because the Centers for Disease Control and Prevention and other authorities have recognized COVID-19 as a pandemic and issued guidance on scope of precautions, employers may take the temperature of employees to assess potential illness. Employers, however, should keep in mind that some individuals with COVID-19 do not have a fever.

Q. If an employee tests positive for COVID-19 or learns of their exposure to the virus and they have recently interacted with clients and customers, how should an employer proceed?
Mastrocola: If an employee is afflicted with COVID-19, the employee should remain out of work on paid sick time, other PTO or other paid medical leave (including the Family and Medical Leave Act, if applicable) until medically cleared to return to work. If an employee was exposed to COVID-19 but not diagnosed with the virus, employers are advised to instruct the employee to remain out of work on paid leave for at least 14 days. In the event such employees recently interacted with clients or customers, there must be a balance between the employer’s obligation to maintain confidentiality of an employee medical condition and the need for disclosure to potentially exposed individuals. It is advisable for employers to notify clients or customers who interacted with the employee of their potential exposure to COVID-19, but do so without identifying the particular employee.

Q. Can an employee refuse to come to work simply due to their fear of exposure? Does that answer change if they are in a high-risk group, such as an older worker?
Mastrocola: Obviously, many workplaces are temporarily closing as a result of government directives or employers not requiring employees to be in the workplace in an abundance of caution. For workplaces remaining open, in normal circumstances, it would not be the healthy employee’s decision whether or not to appear for work. In this extraordinary time of the COVID-19 pandemic, it is advisable for companies to be receptive to employee initiated absence motivated by concern of potential exposure, whether the employee is high risk or not. Employers are not obligated to compensate employees who choose not to come to work. Such employees may apply vacation time or other paid time off (PTO) to the extent available, and any absence upon exhaustion of vacation or PTO would be unpaid.

Q. Are companies allowed to keep furloughed workers on their medical plans?
Mastrocola: While the term “furlough” does not have an established legal definition, it generally refers to an employer’s decision to suspend the work of employees without pay, with the expectation that employees will return to their jobs when business circumstances change. During furlough status, it is clear that employees would not be paid and would not work in the workplace or remotely. Employees should not have physical or virtual access to the workplace, and their company computer network and email access should be cut off.

Employers should be mindful that “furloughed” employees may very well be able to receive unemployment benefits. Unemployment benefit eligibility is determined by state agencies such as the Massachusetts Division of Unemployment Assistance. If furloughed employees receive unemployment benefits, there will be a cost to the employer in the form of increased contribution rate. Similarly, “furlough” does not necessarily have a definitive legal meaning in connection with health benefits as other terms would, such as “full-time,”“part-time,”“seasonal” or “variable” employees. The effect of furlough can vary based on individual plan provisions.

Generally, a furlough is equivalent to a leave of absence without pay, but with continuation of benefits including health insurance coverage. In most cases, furloughed workers may remain on the company’s medical plan during the furlough period.By comparison, a layoff would be considered an employment termination for purposes of medical plans, and coverage would terminate at the end of the month in which the termination occurred. Consequently, employees would be eligible for COBRA continuation coverage at the employees’ expense, and the company would have to issue the required COBRA notices to employees.Companies may choose to cover the employees’ COBRA premiums if they wish to assist employees in maintaining their medical coverage for a period of time.

Q. If an employee claims they contracted the coronavirus while at work,could this result in a compensable workers’ compensation claim? Are there other employment litigation risks on the horizon that concern you?
Mastrocola: Workers compensation is intended to provide coverage and compensation for employees who suffer injuries or illnesses relating to their employment. The viability of workers comp claims relating to contracting COVID-19 in the workplace is unclear at this time. At minimum, there likely would have to be a documented probable work-related exposure for a workers comp claim potentially to be granted.One area of employment litigation risk is the potential for wrongful termination or discrimination claims if employees of protected classes perceive disparate treatment in connection with layoffs, pay cuts or work time reductions prompted by COVID-19 related business slowdowns. Also, I foresee the possibility of wage and hour claims, particularly by non-exempt remote workers, based on confusion and inaccuracy in tracking actual remote work time. This could result in increased litigation or even class action claims for unpaid overtime compensation.

Q. Can a company reduce the wages of employees, cut hours or convert employees to contractors?
Mastrocola: Companies may reduce salaries of employees. Any pay reductions should be applied consistently across the board with a standard percentage. If for some reason that cannot be done, employers at least should have objective, legitimate criteria for the reductions and ensure that they do not have a disparate impact. For example, pay cuts must not result in a higher percentage cuts to women, disabled employees, particular ethnic backgrounds, etc. Pay cuts cannot reduce employee hourly compensation to below minimum wage. Also, pay reductions should be on a going forward basis and not retroactive.

Although the issues and implications can be more complex for exempt employees, employers can certainly reduce work hours for non-exempt employees who need only be paid for their hours worked. Employers should not change status of employees to independent contractors. Massachusetts and many other states have very strict requirements about classification as independent contractors. All workers are presumed to be employees unless they meet some very limited qualifications. If workers presently are employees they will almost certainly be considered employees regardless of working fewer hours. Changing to contractors could open the company to misclassification claims.

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Paul Mastrocola is a partner and co-chair of the Business Litigation & Dispute Resolution groups. As a former criminal prosecutor, seasoned business litigator and employment attorney, Paul Mastrocola is a trusted advisor and problem solver. He understands that legal issues are distractions from our clients’ focus on their businesses. Paul works tirelessly to resolve matters effectively, efficiently and in the best interest of the businesses and individuals that place their confidence in him. He can be reached at pmastrocola@burnslev.com or 617.345.3244.