In response to the COVID-19 (coronavirus) pandemic, major retail chains, manufacturers, hospitality providers and other employers have been reducing hours/pay or closing employment sites. For many employers, these layoffs are expected to be temporary while the virus runs its course, but economic challenges could turn short-term layoffs into events that trigger notice obligations under the federal Worker Adjustment and Retraining Notification (WARN) Act or state “mini-WARN” Acts. This article answers employers’ common wage and hour and WARN Act questions caused by the coronavirus.
Employees must be paid for time spent waiting for, and undergoing, searches of their bags, packages and personal technology devices, the California Supreme Court ruled February 13, 2020, in Amanda Frlekin, et al. v Apple, Inc., Case No. S243805, answering a question posed to it by the U.S. Court of Appeals for the Ninth Circuit in a case involving Apple. This decision marks a signature departure from the federal Fair Labor Standards Act of 1938, under which time spent undergoing mandatory security screenings is not compensable, the U.S. Supreme Court previously held in Integrity Staffing Solutions, Inc. v. Busk, 574 U.S. 27 (2014). This is yet another example of the greater protection that California state laws typically offer employees.
In early February 2020, the Third Circuit Court of Appeals decided that a Philadelphia ordinance passed years ago could go into effect and that Philadelphia employers will no longer be able to ask job applicants about their salary history in job interviews and related contexts.
On July 23, 2019, the Chicago City Council passed the controversial Chicago Fair Workweek Ordinance (the Ordinance). Once Chicago Mayor Lori Lightfoot, a vocal proponent of the Ordinance, signs it into law, the Ordinance is scheduled to take effect for the majority of covered employers on July 1, 2020.
Recently, the California Supreme Court issued its decision in Alvarado v. Dart Container Corporation of California. The Court’s decision changes the manner in which an employer must calculate overtime for employees who earn a flat sum bonus during a single pay period. Accordingly, based on the Court’s decision, this is yet another area where the rules in California differ from the federal rules. This decision is significant because it applies retroactively subject to the applicable statute of limitations.
By way of background, both state and federal laws require that amounts awarded as bonuses be included in determining a non-exempt employee’s overtime rate, except in the case of discretionary bonuses. This means that when the employee works overtime hours and receives a non-discretionary bonus, this bonus program will increase the non-exempt employee’s hourly rate for calculating overtime.
On March 6, the U.S. Department of Labor’s Wage and Hour Division (“WHD”) announced a new pilot program through which employers may settle potential overtime and minimum wage claims under the FLSA by paying back pay owed to the affected employee(s), but without paying civil penalties or liquidated damages. The Payroll Audit Independent Determination (PAID) program will be available for six months, after which the Department will evaluate the viability of the program. This program is purely voluntary, both for employers, in that they would need to self-disclose the violation(s) to the WHD, and employees, who may choose to accept the back pay being offered by the employer as full settlement of the potential claim, or decline the offer and file suit, thus preserving the right to recover liquidated damages if successful. If the employee chooses to accept the back pay, and thus settle the potential claim by signing a release of that claim, the WHD will only approve a release if it is tailored to the identified violations and the time period covered by the back wages payment. Employers are not eligible for the program if they are already under investigation by the WHD, involved in litigation or arbitration regarding the particular claim, or the employee has already communicated an interest in litigating or settling the issue. Claims that could be resolved through this program include misclassification of employees as exempt from overtime or failure to pay for “off the clock” work.