Looking back on 2020, nearly all employers were forced to embrace remote work as the result of the COVID-19 pandemic to comply with state and local lockdowns and to slow and reduce the transmission of the virus. This was a global work-from-home experiment no one signed up for, and as we now know, most businesses were ill-prepared to handle it. However, with nearly a full year of remote work underfoot, companies have either successfully transitioned their business operations to sustain this work-from-home model or have adjusted the work environment to safely resume on-site operations, and have learned some key lessons along the way.
One lesson employers of both teleworking and on-site essential employees learned very quickly was that most paid time off (PTO) plans were insufficient to address and manage their employees’ need for pandemic-related leave. Employee needs were not only complicated by illness and school closings, but also by their employer’s policy, consistent with CDC guidance requiring employees exposed to COVID-19 to remain out of the workplace for 14- or 21-day periods. Recognizing this paid-leave deficit, the federal government jumped to provide these paid leave benefits to employees through the enactment of the Families First Coronavirus Response Act (FFCRA), which provided certain employees with 80 hours of paid leave benefits to care for themselves or family members recovering from or quarantined with the virus, among other reasons. FFCRA also provided employees with 10 weeks of paid leave benefits to care for children whose schools or places of care had closed during 2020. However, the FFCRA’s paid leave benefits for employees expired on December 31, 2020, even though the pandemic rages on, forcing employers to take a hard look at their employees’ paid-leave benefits (or lack thereof).
One of the stand-out issues for paid leave policies during 2020 centered around the flexibility to use paid leave benefits, i.e., whether an employee had a qualifying reason to use their accrued time off. Companies were forced to ask themselves:
- Is the company’s policy flexible enough to provide leave in the case of illness and backup child and elder care, or, is the policy drafted so narrowly such that employees can only use those benefits for their illness if supported by a doctor’s note?
- Does the company’s policy allow employees to use PTO in hourly increments, which would allow an employee to take a few hours off each day to assist their child with remote learning, or, does the company’s policy require employees to take time off in full-day increments?
Many companies were surprised at just how narrow their policies had been drafted as they began answering these questions. This resulted in many companies having to quickly draft policy addendums and exceptions so that employees could effectively utilize their accrued time off. Now that the dust has settled somewhat, companies with these narrow policies should consider whether these exceptions should be implemented permanently as a best practice.
On the other hand, companies with broad “unlimited” PTO policies found themselves with higher than imaginable employee demands for leave and were faced with the opposite issue – how to change course mid-year and set forth restrictions on an employee’s use of PTO. These extreme policies, one way or the other, underscore the importance of creating a well-rounded policy that benefits both parties, and employers would be wise to review their policy in light of any lessons learned during the pandemic.
The pandemic has also highlighted certain issues with use-it or lose-it policies. These policies generally came about for good reason – encouraging employees to use their accrued time off throughout the year to avoid burn-out at work. However, the unintended consequence of a use-it or lose-it policy in 2020 was that many employees did not have sufficient accrued time off at the end of the year to cover an unexpected 14-day quarantine period, for example. Similarly, policies prohibiting carryover from year to year resulted in employees starting the 2021 calendar year with little to no PTO, despite the ongoing pandemic. This left some employers scrambling to allow employees to carry over negative vacation balances or dip into future accruals, and questioning the effectiveness of their policy.
While there is no perfect “one size fits all” leave policy, employers should integrate the lessons learned during the pandemic as it related to the leave policy’s implementation and effectiveness and should modify their leave policy to provide the intended benefits in a practical manner that serves both the employer and the employees’ best interests.
Remote Workforce Considerations
Forced to embrace telework almost overnight, many companies were surprisingly satisfied with the results and have noted their intention to continue remote operations in a post-pandemic setting. Companies have also realized that a remote workforce has no geographic boundaries, meaning their applicant pool has expanded exponentially. However, with a geographically diverse workforce comes multi-state employment laws. For example, employees may be governed by the employment laws in the state in which they reside, as opposed to the state in which they are “working.” An employee living in New York may be working for a Texas-based company, but that does not necessarily mean that Texas law applies to all aspects of the employee’s employment. The employee may be subject to New York’s wage and hour laws (minimum wage, meal and rest breaks, overtime exemptions), among other New York employment laws. Companies who take advantage of this expanded applicant pool should understand and recognize this exposure and be prepared to manage any state-specific labor and employment laws.
The remote-work transformation has also resulted in additional exposure under the Fair Labor Standards Act (FLSA) and related state law. The FLSA requires employees to be paid for all hours worked based on the employer’s actual or constructive knowledge. While the Department of Labor (DOL) recognizes the challenges with monitoring a remote employee’s work time, employers are still required to exercise reasonable diligence to ensure employees are properly paid for all hours worked. Companies that previously had only on-site employees should carefully review their timekeeping policies and should modify those policies to set forth clear expectations of teleworking employees to properly record and report all time worked. These policies should also set forth all expectations for working overtime hours, such as receiving advance approval. Training supervisors on these policies will be a crucial step toward maintaining FLSA compliance. As remote work becomes a consistent reality, companies can lessen their exposure to FLSA liability by training supervisors to manage remote workers’ time and attendance, including when and how to issue corrective action to employees who fail to adhere to proper procedures.
Companies have also been forced to adapt to a teleworking environment at record speed, which in many cases require a modification of employee job duties to facilitate that remote-work setting, which perhaps resulted in the intermingling of some exempt and non-exempt duties. The DOL has reminded employers that the wage and hour regulations allow exempt employees to perform nonexempt duties that are required by an emergency without losing the exemption providing they meet the salary basis test. However, employers who intend to continue those modified job duties in a more permanent nature should understand the limitations of this emergency exception. Companies should carefully audit any positions with permanently modified duties to determine whether the employees still meet the applicable FLSA exemption criteria. Employees who no longer meet that criteria should be converted to non-exempt status.
Vaccinations – Mandatory Programs and Incentives
As the COVID-19 vaccines become more widely available, and as employers began reopening offices, many companies are considering whether to mandate or incentivize employees to receive the COVID-19 vaccine. Employers can certainly mandate vaccinations as a condition of employment – many companies in the healthcare industry have been requiring workers get the flu vaccines for years – however, any mandatory vaccination program must comply with the Americans with Disabilities Act (ADA) and Title VII of the Civil Rights Act of 1964 (Title VII), as well as any related state or local law.
To the extent an unvaccinated employee is a direct threat, the company should engage in the interactive process to evaluate any reasonable accommodations, which might include, wearing a mask, social distancing, isolation, or modified work schedules, just to name a few. However, if those accommodations posed an undue hardship – more than a minimal cost or operational burden – the employee can be excluded from the workplace absent other legal issues that would prohibit this exclusion. Unfortunately, there are no easy guidelines to follow here, and this analysis is full of pitfalls. Companies would be wise to partner closely with their legal counsel to discuss the business and legal risks of a mandatory vaccination program and to draft and implement such a policy.
As an alternative, employers may encourage (rather than mandate) employees to receive the COVID-19 vaccination by offering incentives, such as additional PTO or bonuses. Yet, even these incentive programs may pose a legal risk to the extent the program was discriminatory – i.e., an employee was ineligible for the incentive because of their claimed disability of a severe reaction to the vaccine. Again, companies are encouraged to partner with their employment counsel to avoid these legal pitfalls.