As of March 16, 2020, six Bay Area counties have joined numerous other cities, states, and countries that have ordered residents to remain at home, and brick and mortar businesses to shut down, until April 7, 2020. As a result of this ‘shelter in place’ order, many businesses that rely predominately on face-to-face interactions may be forced to consider reducing their workforce, resulting in some employees becoming unable to earn the wages they need to pay their bills. Other businesses may be able to continue operating via teleworking, though this will come with its own challenges for companies and employees for whom work-from-home has not been a regular practice.
Regardless of the situation your company is in, or whether you’re an employer or an employee, this article provides some tips and resources to help get you through this challenging time.
Salaried Workers. Businesses that are shutting down due to the “Shelter in Place” order still must pay their exempt workers as if they worked the full week, if they worked any hours this week.
Layoffs. For employers that are considering layoffs or temporary work furloughs due to the “Shelter in Place” order, employers may be eligible to participate in the UI Work Sharing Program as an alternative to layoffs. The program allows employers to retain trained employees by reducing their hours and wages, and utilizing unemployment insurance benefits to offset any reduced wages. Employees may also be eligible to receive partial wage replacement benefit payments regardless of whether or not their employer participates in the UI Work Sharing Program, if the worker lost their job or had their hours reduced through no fault of their own. Employees should file an Unemployment Insurance claim to determine if they are eligible for these partial wage replacement benefit payments.
Reduction in Pay. For employers that are decreasing wages of nonexempt employees, employers must provide reasonable, written notice to employees at least seven days in advance. For exempt employees, employers should be mindful not to lower salaries below the minimum salary required for exemption status, or else the employer may need to transition the employee to a nonexempt (hourly) status before reducing compensation. Currently, the minimum salary for those with 25 employees or more is at least $54,080.00 annually.
Teleworking. Teleworking poses unique challenges for employers of nonexempt workers who are paid hourly and qualify for overtime and mandated meal breaks and rest periods, since teleworking can create difficulties in tracking employees’ hours and ensuring that employees are taking appropriate meal and rest breaks. One way to address this issue is to have an electronic timekeeping system that workers can log into. For companies without these resources, a good practice is to send an email articulating the company’s policy on teleworking (even if it was newly created, in light of the crisis), emphasizing that workers are responsible for keeping track of their hours and monitoring their meal and rest breaks, in order to mitigate the potential legal risk from improperly paying employees. In the same vein, it is good practice for employees to diligently record all hours they worked, in case pay discrepancy issues arise down the road.
As for salaried workers, teleworking poses other challenges for both the employer and employee. For employers, there may be a concern that employees will not be working or will not be as available. Developing a work-from-home policy can address these concerns and set employees’ expectations of expected start and stop times, the extent to which the workers are expected to remain available, and productivity standards. Employees may also be similarly concerned about their productivity levels, especially if they lack experience working in isolation. This may be a good moment to build company rapport as employers and employees corroboratively educate each other on how to work from home in a productive manner. Companies may consider setting up teleconference, video call, or group chat meetings early on during the “Shelter in Place” period, to allow individuals to share “tricks” of the working at home trade. I personally have found that dressing up in the morning as if I were going to work, and dedicating a regular place in my house as my “office space,” helps me simulate the work-office environment.
While this “Shelter in Place” order will undoubtedly pose challenging new issues for employers and employees alike, we hope the above tips will help ease the process. This article provides a high-level view of only some of the potential challenges that may arise, and we encourage both employers and employees to seek the advice of legal counsel during this time, to mitigate the risk of legal exposure and ensure that legal obligations are being met. The attorneys at Dhillon Law Group are happy to provide consultation services to both employers and employees.
Dorothy Yamamoto is an associate at Dhillon Law Group Inc.
