Author: Nancy Abrams

As businesses begin to reopen, business owners face numerous challenges regarding the safety of their employees and their customers and clients. There are several steps that can minimize these risks and help protect the business from claims made by employees or customers.

Health Screening for Employees

            It is permissible, and advisable, to do a certain amount of screening of employees returning to the workplace. Employers may take employee temperatures and may ask questions regarding whether or not they have been exposed to COVID-19, are suffering from any symptoms associated with COVID-19, or have recently traveled outside the area to a COVID-19 “hotspot.” Employers should refrain from asking about any other medical condition unless the employee indicates that they have a medical condition that makes them more at-risk for contracting COVID-19.

Safety Protocols

            All employers should put into place safety protocols that help to promote social distancing and enhanced sanitation. These protocols can include staggering work schedules, separating work stations either by distance or by providing physical barriers, limiting gatherings and meetings, limiting outside visitors to the workplace, requiring that face masks be worn in common areas, and providing enhanced cleaning and hand sanitizing products. Employee contacts should also be tracked in case an employee is exposed to or is diagnosed with COVID-19.

Employees Hesitant to Return to Work

            Employees recalled to work may express an unwillingness to return to the workplace. If an employee has a health condition that makes them particularly susceptible to contracting COVID-19 you may be required to extend a “reasonable accommodation,” which could include permission to work from home or an unpaid leave. A request of this type should be handled like any other request for a reasonable accommodation and a medical certification from the employee’s doctor may be required.
         If an employee is simply afraid to come back to work or does not want to come back because they are being paid more in unemployment compensation than they would earn working, an employer may insist that the employee return to work and, if the employee does not, treat the separation as a voluntary resignation. Any refusal to return to work, particularly if it is because the employee does not want to return because they are making more in unemployment compensation, should be reported to the Unemployment Compensation Bureau.

Customer/Client Waivers

            Employers who serve the general public may want to consider having customers or clients sign a liability waiver. In any event, customers/clients should be asked the same health screening questions posed to employees and should be required to wear face masks.
            If you have any questions or need assistance drafting return-to-work policies or waivers, please contact Nancy Abrams at 215 241-8894 or nabrams@sgrvlaw.com.
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In the past week, the U.S. Department of Labor (DOL) has issued new final rules that provide greater flexibility to retail industry employers that want to claim an overtime exemption for employees who receive at least half of their compensation through commissions, and that permit employer’s to use a “fluctuating work week” method of payment even if it pays employees periodic bonuses or similar payments, including commissions, premium pay or hazard pay, in addition to a set weekly salary.

Rule Regarding “Retail Concept”

Provisions in the Fair Labor Standards Act (FLSA) allow employers in retail and service industries to treat employees paid primarily on a commission basis as exempt from overtime. In 1961, the DOL introduced as an interpretive rule, a lengthy but non-exhaustive list of 89 types of establishments that it viewed as lacking a “retail concept” that, therefore, could not claim the exemption for commissioned employees. In the same interpretive rule, it also included a separate non-exhaustive list of 77 types of establishments that “may be recognized as retail.” In 1970, the DOL added another 45 establishments that it viewed as lacking a “retail concept.” The list of establishments that lack a “retail concept” included businesses in various industries such as dry cleaners, tax preparers, laundries, roofing companies, travel agencies, blue printing and photostating establishments, stamp and coupon redemption stores, and telegraph companies. The “may be” retail list included establishment in industries such as coal yards, fur repair and storage shops, household refrigerator service and repair shops, masseur establishments, piano tuning establishments, reducing establishments, scalp-treatment establishments, and taxidermists.

On May 19, 2020, the DOL withdrew both lists. Going forward, the DOL will apply the same analysis to all establishments to determine whether they have a retail concept and qualify as retail or service establishments (if they sell goods or services to the general public and if they serve the everyday needs of the community in which they are located), permitting establishments in industries that had been on the non-retail list to assert that they do, in fact, have a retail concept and, if they meet the existing definition of retail and other criteria, to qualify for the exemption. The added flexibility will permit industries that had been on the “no retail concept” list to consider whether a commission-based pay arrangement is appropriate for its employees. The DOL believes that a more flexible, fact-based analysis is better suited to account for newly developed industries as well as developments in industries over time regarding whether companies are retail or not.

Fluctuating Workweek

On May 20, 2020, the DOL announced a final rule that will give employers greater flexibility to use the fluctuating workweek method of calculating overtime pay for salaried, nonexempt workers whose hours vary from week to week. The fluctuating workweek method is an alternative to the Fair Labor Standards Act’s regular method of calculating overtime pay, under which employees are paid an hourly wage and receive 1.5 times their regular rate of pay for overtime hours. To use the fluctuating workweek method, employees’ hours actually have to change week to week, and employees must receive a fixed salary even when they work less than their regularly scheduled hours. Additionally, there must be a clear understanding between the business and employees about how workers are paid. With this method, an employee who is entitled to overtime pay receives a fixed weekly salary, which is divided by the number of hours the employee actually worked in the week to determine the week’s base hourly rate. The employee will then receive an additional 0.5 times their base rate for each hour worked beyond 40 in the workweek.

Prior to the new rule, employers generally could not use the fluctuating workweek method to calculate overtime pay for employees who receive pay such as bonuses and other incentive-based pay in addition to the guaranteed salary. Under the amended Rule, employers can pay bonuses, premium payments or other additional pay, such as commissions and hazard pay, to employees without jeopardizing their ability to use the fluctuating workweek method of compensation. Employers must keep in mind, however, that any compensation that is paid in addition to the fixed salary under the fluctuating workweek method will still have to be included in the regular rate of pay for overtime calculations.

It is also important to check state law before utilizing a fluctuating workweek method. Some states, such as Alaska, California, New Mexico and Pennsylvania, do not allow employers to use the fluctuating workweek method at all, and other states have not addressed its use.

If you have any questions, please contact Nancy Abrams at nabrams@sgrvlaw.com or (215) 241-8894.

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On May 4, the Department of Labor and IRS jointly published a Rule entitled “Extension of Certain Timeframes for Employee Benefit Plans, Participants, and Beneficiaries Affected by the COVID-19 Outbreak.” The final rule extends most COBRA deadlines to beyond the “Outbreak Period,” which it defines as March 1, 2020, to 60 days after the end of the declared COVID-10 national emergency, or another date if provided by the agencies in future guidance (i.e., if the emergency declaration expires on June 29, 2020, the Outbreak Period will end on August 28, 2020).

The rule extends various COBRA deadlines as follows:

  • The COBRA election period. Under COBRA, employees and dependents who lose active coverage as a result of a qualifying event, such as termination of employment or reduction of hours, normally have 60 days to elect continuation coverage after receiving a COBRA election notice. Under the rule, the 60-day timeframe doesn’t start to run until the end of the Outbreak Period.
  • The COBRA premium payment period. COBRA enrollees normally have 45 days from their COBRA election to make the first premium payment, and subsequent monthly payments must be made within a 30-day grace period that starts at the beginning of each coverage month. Under the new rule, the initial premium payment and grace period don’t start to run until the end of the Outbreak Period.
  • The date for individuals to notify the plan of a qualifying event or determination of disability. Normally an individual has 60 days to inform a plan administrator of a qualifying event (i.e., a divorce or a child reaching the age of 26). Under the new rule, the 60 day period does not start to run until the end of the Outbreak Period.

Deadlines for individuals to file a benefit claim, to file an appeal of adverse benefit determination under the plan’s claims procedure, and to file a request for an external review after receipt of an adverse benefit determination were similarly extended.

Note, however, that no extension was granted for the 14-day deadline for plan administrators to furnish COBRA election notices after a qualifying event has occurred.

Under the new rule, employers must permit an employee or beneficiary to elect COBRA coverage even if more than 60 days has passed since the employee or beneficiary lost coverage under the employer’s health plan. In addition, an employer cannot terminate an employee’s COBRA coverage for failure to pay premiums during the “Outbreak Period,” which may result in the employer paying for the employee’s coverage.

If you have any questions, please contact Nancy Abrams at nabrams@sgrvlaw.com or (215) 241-8894.

 

 

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The first six months of 2019 have seen the NLRB reverse its recent trend of expanding its regulation of employer conduct.  In January, the NLRB issued two decisions, the first of which narrowed the definition of “protected, concerted activity” and the second of which redefined the test for determining what individuals would be considered to be “independent contractors” who are not covered by the NLRA.  Last week the NLRB reversed its own precedent to permit employers to limit a union’s access to areas of its workplace that are open to the public.

Prior to the first January decision, the NLRB would presume that any employee complaint made in a meeting was intended to contemplate group action and was, therefore, presumed to be protected concerted activity.  The NLRB’s decision eliminated this presumption, finding that an individual’s complaint could not be assumed to be group action just because it was made in the presence of other employees.  The Board set out five factors that must be considered to determine whether or not an employee’s complaint was group action, noting that all five factors need not be present to support an inference that the employee is engaging in group action.

The second January decision overturned a 2014 NLRB decision that made it harder for employers to show that an individual was an independent contractor and not an employee covered by the NLRA.  Under the 2014 standard, the NLRB merely looked at whether or not the individual was “economically dependent” on a company, without considering other common law factors it had previously considered, and making it very unlikely that the Board would conclude that an individual was an independent contractor.  With this January decision, the Board returned to its pre-2014 standard, taking into account a variety of factors including the relationship the company and the individual think they are creating and how much control the company actually has over the individual’s work.

Last week, the NLRB overturned a rule the Board created in 1981 limiting an employer’s ability to deny access to a union into areas of its workplace that are open to the public such as cafeterias or restaurants.  In 1956, the United States Supreme Court ruled in NLRB v. Babcock & Wilcox Co. that employers could deny a union access to its property to solicit employees and distribute literature unless the union could prove that it had no other reasonable way to communicate with the employees or if the employer discriminated against the union by permitting other non-employees to solicit or distribute literature on company property.  In 1981, the Board added a rule that a union could not be denied access to any area of an employer’s property that was open to the public as long as the union was not being disruptive, even if the Babcock factors were not present.

The Board overruled this longstanding “public space” rule last week, finding that a hospital did not violate the Act when it forced two union organizers to leave its cafeteria, even though that cafeteria was open to the public.  In doing so, the Board returned to the pre-1981 standard, permitting employers to exclude a union from areas of its workplace that are open to the public unless the Babcock factors were proven.

If you have any questions or would like additional information, please contact Nancy Abrams at nabrams@sgrvlaw.com or 215-241-8894

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The new rules proposed by the U.S. Department of Labor that will greatly increase the minimum salary requirement for employees to be considered exempt from overtime under the executive, administrative or professional exemptions have been adopted and will go into effect on December 1, 2016. The new rules key the minimum salary requirement to what the DOL determines is the 40th percentile of the salaries for all full-time salaried employees, currently $913 per week or $47,476 annually. Nondiscretionary bonuses and incentive payments (including commissions) may be used to satisfy up to 10 percent of the required minimum salary.

While this increase is less than what was originally proposed ($921 per week), it is still more than double the current $455 weekly salary threshold. Under the final rules, the minimum annual salary will not increase each year, but will be reviewed and could be increased every three (3) years as the annual salaries of full-time salaried employees increase. The threshold annual salary for the “highly compensated” exemption will be raised to $134,004.

In the interim, the House and Senate bills that would block the new overtime rules, Senate Bill 2707 and House Bill 4773 are still in committee.

All employers need to review their compensation structure and determine whether or not the employees they are treating as exempt under the administrative, executive or professional exemptions will meet the new minimum salary threshold, and either adjust employee salaries or prepare to treat employees whose salaries fall under the new threshold as non-exempt for overtime purposes.

If you have any questions or would like additional information, please contact Nancy Abrams at nabrams@lawsgr.com or 215-241-8894

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