Difference between revisions of "FAQs — Health and Safety"
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− | ! [[Federal Health and Safety Orders | + | ! [[Federal Health and Safety Orders — Centers for Disease Control and Prevention Guidance|< Previous ]] !! [[Navigating COVID-19: A Legal Guide For California Employers|Table of Contents]] !! [[Leave — Family and Medical Leave Act & California Family Rights Act| Next >]] |
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+ | __NOTOC__ | ||
+ | ==FAQs== | ||
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===An employee has tested positive for COVID-19. What should we do?=== | ===An employee has tested positive for COVID-19. What should we do?=== | ||
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The employee should be sent home until released by his or her doctor or until he or she has been fever-free and without symptoms for at least 72 hours. The CDC has relaxed guidelines for critical infrastructure workers –– as defined under the Cybersecurity and Infrastructure Security Agency –– who have been exposed to the virus. The CDC's list of affected workers is vague, so we recommend that employers use caution when allowing exposed employees to continue working. In an abundance of caution, we continue to recommend that employers send home any worker who has been exposed to the virus. | The employee should be sent home until released by his or her doctor or until he or she has been fever-free and without symptoms for at least 72 hours. The CDC has relaxed guidelines for critical infrastructure workers –– as defined under the Cybersecurity and Infrastructure Security Agency –– who have been exposed to the virus. The CDC's list of affected workers is vague, so we recommend that employers use caution when allowing exposed employees to continue working. In an abundance of caution, we continue to recommend that employers send home any worker who has been exposed to the virus. | ||
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# Close off all areas used by the ill person and wait as long as long as practical to begin cleaning and disinfecting to minimize potential for exposure (ideally, 24 hours). If applicable, open windows, doors and other entrances and exits to increase air circulation in the area. | # Close off all areas used by the ill person and wait as long as long as practical to begin cleaning and disinfecting to minimize potential for exposure (ideally, 24 hours). If applicable, open windows, doors and other entrances and exits to increase air circulation in the area. | ||
# Clean and disinfect all areas previously used by the suspected or infected person, including offices, bathrooms and common areas. Cleaning staff should focus on frequently touched surfaces. | # Clean and disinfect all areas previously used by the suspected or infected person, including offices, bathrooms and common areas. Cleaning staff should focus on frequently touched surfaces. | ||
+ | |||
===May an employer require a virus-exposed employee to notify it? What if he or she has symptoms or has tested positive for the coronavirus?=== | ===May an employer require a virus-exposed employee to notify it? What if he or she has symptoms or has tested positive for the coronavirus?=== | ||
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<ol> | <ol> | ||
<li>Persons with COVID-19 who have symptoms and were directed to self-quarantine may discontinue the practice when:</li> | <li>Persons with COVID-19 who have symptoms and were directed to self-quarantine may discontinue the practice when:</li> | ||
+ | |||
<ol type="a"> | <ol type="a"> | ||
<li>at least three days have passed since recovery, defined as resolution of fever without the use of fever-reducing medications and improvement in respiratory symptoms (for example, cough or shortness of breath); and</li> | <li>at least three days have passed since recovery, defined as resolution of fever without the use of fever-reducing medications and improvement in respiratory symptoms (for example, cough or shortness of breath); and</li> | ||
<li>at least seven days have passed since symptoms first appeared. | <li>at least seven days have passed since symptoms first appeared. | ||
</ol> | </ol> | ||
+ | |||
<li>Employees who have tested positive for COVID-19 and are able to be tested to determine if the virus has passed may discontinue self-quarantine when:</li> | <li>Employees who have tested positive for COVID-19 and are able to be tested to determine if the virus has passed may discontinue self-quarantine when:</li> | ||
+ | |||
<ol type="a"> | <ol type="a"> | ||
<li>fever is gone without the use of fever-reducing medications;</li> | <li>fever is gone without the use of fever-reducing medications;</li> | ||
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<li>two consecutive nasopharyngeal swab specimens collected 24 hours apart tested negative (see [https://www.cdc.gov/coronavirus/2019-ncov/lab/guidelines-clinical-specimens.html interim guidelines] for collecting, handling and testing clinical specimens from persons under investigation (PUIs) for 2019 Novel Coronavirus for specimen collection guidance).</li> | <li>two consecutive nasopharyngeal swab specimens collected 24 hours apart tested negative (see [https://www.cdc.gov/coronavirus/2019-ncov/lab/guidelines-clinical-specimens.html interim guidelines] for collecting, handling and testing clinical specimens from persons under investigation (PUIs) for 2019 Novel Coronavirus for specimen collection guidance).</li> | ||
</ol> | </ol> | ||
+ | |||
<li>Individuals with no symptoms after at least seven days since the date of their first positive COVID-19 test may discontinue self-quarantine if they have had no subsequent illness. For three days following discontinuation, individuals with no symptoms who had tested positive should continue limiting contact (stay 6 feet away from others) and wear a covering for their nose and mouth when other people are present.</li> | <li>Individuals with no symptoms after at least seven days since the date of their first positive COVID-19 test may discontinue self-quarantine if they have had no subsequent illness. For three days following discontinuation, individuals with no symptoms who had tested positive should continue limiting contact (stay 6 feet away from others) and wear a covering for their nose and mouth when other people are present.</li> | ||
</ol> | </ol> | ||
+ | |||
The Equal Employment Opportunity Commission says that an employer may require a doctor’s note stating that an employee is fit for duty before permitting someone to return to work. | The Equal Employment Opportunity Commission says that an employer may require a doctor’s note stating that an employee is fit for duty before permitting someone to return to work. | ||
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===Is COVID-19 testing covered by group health insurance plans?=== | ===Is COVID-19 testing covered by group health insurance plans?=== | ||
− | Yes. The Families First Coronavirus Response Act signed into law on March 18 requires group health plans to provide coverage for FDA approved COVID-19 diagnostic testing products and related items and services furnished during a provider visit. | + | Yes. The Families First Coronavirus Response Act signed into law on March 18 requires group health plans to provide coverage for FDA-approved COVID-19 diagnostic testing products and related items, and services furnished during a provider visit. |
− | ===Must an employer keep paying | + | ===Must an employer keep paying nonexempt employees who are not working?=== |
− | Under the California Labor Code, for the most part | + | Under the California Labor Code, the answer is no, for the most part. Minimum-wage and overtime requirements must be respected for all nonexempt employees for all hours worked. If a nonexempt employee performed no work, typically he or she is not required to be paid. |
− | Of course, an employer may have a legal obligation to keep paying | + | Of course, an employer may have a legal obligation to keep paying nonexempt employees because, for example, they have an employment contract, a collective bargaining agreement, or some policy or practice that is enforceable as a contract. |
===Must we pay exempt employees who are not working?=== | ===Must we pay exempt employees who are not working?=== | ||
− | Generally | + | Generally, if an exempt employee performs at least some work during the employer’s work week, the salary basis rule requires that he or she be paid the entire salary for that work week. There are exceptions, such as a situation in which the employee decides to stay home for the day and performs no work. The laws regarding the payment of a salary to exempt employees reflect the notion that salaried employees are paid for the general value of their services rather than the precise amount of time on the job. As a result, employers may not dock salaried employees' pay for partial days missed. So, subject to narrow exceptions, exempt employees must receive their full salary for any week in which they perform any work, regardless of the number of days or hours worked. |
− | |||
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− | + | Some exceptions to the workweek rule allow for salary reductions: | |
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− | |||
− | + | # The employee is absent from work for one or more full days for personal reasons other than sickness or disability. | |
+ | # The employee is absent for one or more full days because of sickness or disability (including work-related accidents), if the deduction is made in accordance with a bona fide plan, policy or practice of providing compensation for loss of salary occasioned by both sickness and disability. | ||
+ | # The employee is absent for one or more full days due to an unpaid disciplinary suspension imposed in good faith pursuant to a written policy for infraction of workplace conduct rules, for example, written policies prohibiting sexual harassment or workplace violence. | ||
+ | # The regulations do not require employers to pay an employee’s full salary in the initial or terminal week of employment. In such weeks, an employer may pay the employee a proportionate part of his salary for the time actually worked without violating the salary-basis standards. | ||
+ | # There's a reduction in an employee’s work schedule accompanied by a commensurate reduction in pay that does not fall below the minimum salary level. In 1998, Wage and Hour Opinion Letter No. 1905 opined that a fixed reduction in salary effective during a period when a company operates a shortened work week due to economic conditions would be a bona fide reduction and would not change an employee’s exempt status. Similarly, in 1997, Wage and Hour Opinion Letter No. 2026 opined that an employer could reduce hours from 40 to 32 with a commensurate reduction in pay as an alternate to layoffs, and a 1970 opinion letter allowing employers to reduce salaries by 20% for a fixed schedule of five annually recurring four-day weeks did not change an employee’s exempt status. Wage and Hour Opinion Letters dated Feb. 18, 1999 and April 30, 1975 opined that fixed reductions in salaries when a company operates a shortened week due to economic conditions were permissible. In an opinon letter dated Aug. 19, 2009, the Division of Labor Standards Enforcement agreed that a reduction in the work schedule coupled with a reduction in salaries is allowed under a California law. | ||
− | |||
− | + | Although DLSE opinion letters are not binding on the courts, they are followed in proceedings before the California Labor commissioner. Also, opinion letters reduce the risk of a court finding an otherwise exempt employee’s status to be lost when workplace situations mandate a temporary reduction in hours worked coupled with a commensurate reduction in salary. | |
− | + | Given the nature of the pandemic and the stay-in-place orders, an employer’s decision to reduce exempt employees’ hours and a proportionate reduction in salary in order to avoid layoffs mirrors the requirements of the 2009 DLSE opinion letter that was written in response to the economic downturn that started in 2008 and resulted in massive layoffs. | |
− | + | ===What are the guidelines if an employer wants to reduce an exempt employee's workweek and couple it with a commensurate reduction in salary?=== | |
− | + | First, we advise structuring any salary reduction as an advanced reduction in the weekly salary rate, and not as deductions from an established salary rate for missed work days. This means that if an employer is contemplating reducing the workweek and reducing an exempt employee’s salary, it must notify the affected employee in writing, giving advanced notice of the reduction in time, and in pay. | |
− | + | Second, a combined work schedule and salary rate reduction should be in place for a substantial period of time. The U.S. Department of Labor (DOL) consistently has stated that short-term reductions in salaries “due to the day-to-day or week-to-week determinations of the operating requirements of the business are precisely the circumstances the salary basis test is intended to preclude.” Recent DOL opinions described unlawful reductions as involving a “fixed” or “permanent” reduction in hours and pay rate. Reductions needn't last forever and they may be reversed after economic conditions or the conditions necessitating the reductions improve. Beyond that, however, there is no standard of brevity about how long a reduction may last while still qualifying as “fixed” or “permanent.” | |
− | + | Given the lack of guidance, we believe partial workweek furloughs should be described as indefinite, lasting as long as economic (or, in this case, pandemic) difficulties continue. | |
− | + | Third, an employer must not adjust salary rates and schedules too often because the DOL disapproves of reductions that are made “for short-term business needs,” or that are “occasional … and transitory.” | |
− | + | Finally, any reduced salary must not fall below the minimum salary rate required for exempt status –– currently $4,160 per month in California. | |
− | + | ===What's the difference among a furlough, a layoff and a reduction in force?=== | |
− | + | All three describe actions intended to save costs by reducing a company’s payroll. Even though the terms have been used interchangeably, their true meanings are quite different. See the following subsections for a complete explanation. | |
− | + | ==Furlough== | |
− | + | A furlough is considered to be an alternate to a layoff. When an employer furloughs employees, it requires them to work fewer hours or to take a certain amount of unpaid time off. For example, an employer may furlough its nonexempt employees one day a week for the remainder of the year and pay them for 32 hours instead of their normal 40 hours each week. Similarly, an employer may furlough its exempt employees by reducing the workweek from five days to four days, simultaneously reducing the employee’s salary commensurate with a 32-hour work week. (See the FAQ in the previous subsection.) | |
− | + | An employer may require all employees go on furlough, or may exclude some who provide essential services. The idea is to have most employees share the hardship so that some employees don't lose their jobs. | |
+ | Employers generally keep furloughed employees’ medical benefits in place for the length of the furlough. We remind employers, however, to consult with their benefit providers for requirements related to stopping benefits. | ||
− | + | Furloughed workers may be entitled to unemployment insurance benefits. | |
− | A | + | '''Practice tip''': A furlough should be structured and limited in time. Employers that furlough workers should have a return-to-work date. Indefinite furloughs are considered reductions in force, and accrued but unused vacation or paid time off must be paid on the furlough date. |
+ | ==Layoff== | ||
− | + | A layoff is a temporary separation from payroll. An employee is laid off because there is not enough work for him or her to perform. The employer, however, believes that this condition will change, and intends to recall the person when work again becomes available. Typically, employees are able to collect unemployment benefits while on an unpaid layoff, and employers frequently allow employees to maintain benefit coverage for a defined period of time as an incentive to remain available for recall. Employers often use the terms "layoff" and "reduction in force" interchangeably. | |
− | + | ==Reduction in Force== | |
− | + | A reduction in force (RIF) occurs when a position is eliminated without the intention of replacing it, and involves a permanent cut in headcount. A layoff might turn into a RIF, or the employer might choose immediately to reduce its workforce. A RIF occurs through termination or attrition. When an employee is terminated by a reduction in force, the employer must adhere to legal requirements. Reduction in force or permanent layoffs require an employer in California to: | |
− | |||
− | |||
− | + | # Issue the employee a final paycheck that includes all wages earned up to the date of the RIF or layoff. | |
+ | # Pay out all accrued but unused vacation or paid time off (PTO). | ||
+ | # Send COBRA notices to affected employees (from the employer or its third-party administrator). | ||
+ | Failure to adhere to these requirements subjects the employer to penalties. | ||
− | == | + | ==See Also== |
− | * [[FAQs | + | * [[FAQs — Disability and Reasonable Accommodations]] |
− | * [[Appendix | + | * [[Appendix — Web Links For Local Safety Orders]] |
− | + | ==References== | |
− | == | ||
<references/> | <references/> | ||
+ | ---- | ||
− | |||
<center> | <center> | ||
{| class="wikitable" | {| class="wikitable" | ||
− | ! [[Federal Health and Safety Orders | + | ! [[Federal Health and Safety Orders — Centers for Disease Control and Prevention Guidance|< Federal Health and Safety Orders — Centers for Disease Control and Prevention Guidance]] !! [[Navigating COVID-19: A Legal Guide For California Employers|Table of Contents]] !! [[Leave — Family and Medical Leave Act & California Family Rights Act| Leave — Family and Medical Leave Act & California Family Rights Act >]] |
|- | |- | ||
|} | |} | ||
</center> | </center> |
Latest revision as of 00:28, 23 January 2024
< Previous | Table of Contents | Next > |
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FAQs
An employee has tested positive for COVID-19. What should we do?
The employee should be sent home until released by his or her doctor or until he or she has been fever-free and without symptoms for at least 72 hours. The CDC has relaxed guidelines for critical infrastructure workers –– as defined under the Cybersecurity and Infrastructure Security Agency –– who have been exposed to the virus. The CDC's list of affected workers is vague, so we recommend that employers use caution when allowing exposed employees to continue working. In an abundance of caution, we continue to recommend that employers send home any worker who has been exposed to the virus.
When an employee is sent home, do not identify the worker by name or other information that might disclose identity to co-workers, or you could be violating medical confidentiality. The CDC recommends that employees who work closely with an infected worker also stay home, per its public health guidelines for community-related exposure. The recommended period to remain home is 14 days after the last exposure, during which time individuals should maintain social distance and watch for symptoms such as fever, cough and shortness of breath.
If an employee who has tested positive for COVID-19 is sent home, should the employer take any health and safety precautions?
The CDC recommends that most nonhealth-care businesses with a suspected or confirmed COVID-19 case:
- Close off all areas used by the ill person and wait as long as long as practical to begin cleaning and disinfecting to minimize potential for exposure (ideally, 24 hours). If applicable, open windows, doors and other entrances and exits to increase air circulation in the area.
- Clean and disinfect all areas previously used by the suspected or infected person, including offices, bathrooms and common areas. Cleaning staff should focus on frequently touched surfaces.
Yes, employers should require employees who have been exposed, have tested positive or have interacted with customers or vendors who are positive or exposed to advise the employer as soon as possible. Employees who don't have symptoms should stay at home until they have remained symptom-free for at least 72 hours.
What steps can an employer take to help reduce the transmission of COVID-19?
Have a policy and procedures detailing your response to the pandemic and setting expectations of your employees to ensure that they adhere to health and safety requirements to avoid exposure and reduce the risk of transmission. Employers should make clear to employees to:
- Wash hands often with soap and water for at least 20 seconds. If soap and water are not available, use an alcohol-based hand sanitizer.
- Avoid touching eyes, nose and mouth.
- Avoid close contact with others, especially people who are sick. Adhere to social distancing requirements whenever practicable.
- Refrain from shaking hands.
- Cover sneezes and coughs with a tissue, or sneeze/cough into your elbow.
- Clean and disinfect objects and surfaces you touch frequently.
- Stay home when you are sick.
As an employer, you should:
- Provide employees with ample facilities to wash their hands, and if washing facilities are not available, hand sanitizers containing at least 60% alcohol.
- Evaluate remote work capabilities and policies, and permit telework for all employees for whom it is practicable.
- Limit work-site access to only essential workers, if possible.
- Consider staggering work shifts, rest breaks and meal breaks, and enforce social distancing requirements.
- Establish a single contact for employees who have questions or concerns about the pandemic and their work situation.
- Clean and disinfect surfaces, equipment and the work environment often.
May an employee refuse to work for fear of getting COVID-19?
Employees may refuse to work only if they believe they are in imminent danger. The Occupational Safety and Health Act (OSHA) defines "imminent danger" as “any condition or practice in any place of employment which are such that a danger exists which can reasonably be expected to cause death or serious physical harm immediately or before the imminence of such danger can be eliminated through the enforcement procedures otherwise provided by this Act.”[1]
The National Labor Relations Act (NLRA) Section 7 extends broad-based statutory protection to union and nonunion employees alike to engage in “protective concerted activity from mutual aid or protection.” Such activity has been defined to include circumstances in which two or more employees act together to improve their employment terms and conditions, although it has been extended to individual action expressly undertaken on behalf of co-workers. The NLRB offers several examples, including “talking with one or more employees about working conditions,” “participating in a concerted refusal to work in unsafe conditions” and “joining with co-workers to talk to the media about problems in the workplace.” The NLRB generally protects employees who fall within these categories against discipline or discharge.
As long as an employer takes all reasonable precautions to ensure a safe workplace despite the threat of COVID-19, it's probably inappropriate for an employee to refuse to work because he or she is afraid of contracting the virus.
If employees are self-quarantining in their homes, when may they stop?
Employees should follow all directions and advice from their medical provider or local health-care official regarding the duration of their self-quarantine. If direction or guidance is unavailable, the CDC has several options for determining when someone may end a self-quarantine. They include:
- Persons with COVID-19 who have symptoms and were directed to self-quarantine may discontinue the practice when:
- at least three days have passed since recovery, defined as resolution of fever without the use of fever-reducing medications and improvement in respiratory symptoms (for example, cough or shortness of breath); and
- at least seven days have passed since symptoms first appeared.
- Employees who have tested positive for COVID-19 and are able to be tested to determine if the virus has passed may discontinue self-quarantine when:
- fever is gone without the use of fever-reducing medications;
- respiratory symptoms improve; and
- two consecutive nasopharyngeal swab specimens collected 24 hours apart tested negative (see interim guidelines for collecting, handling and testing clinical specimens from persons under investigation (PUIs) for 2019 Novel Coronavirus for specimen collection guidance).
- Individuals with no symptoms after at least seven days since the date of their first positive COVID-19 test may discontinue self-quarantine if they have had no subsequent illness. For three days following discontinuation, individuals with no symptoms who had tested positive should continue limiting contact (stay 6 feet away from others) and wear a covering for their nose and mouth when other people are present.
The Equal Employment Opportunity Commission says that an employer may require a doctor’s note stating that an employee is fit for duty before permitting someone to return to work.
What should an employer do if an employee wants to wear a medical mask or respirator in the workplace?
On April 3, the CDC recommended that people wear face coverings in public settings where other social distancing measures were difficult to maintain, especially in areas of significant community-based transmission. The agency also recommends that people use simple cloth face coverings to slow the spread of the virus, and that they can be homemade using common household materials. These aren't surgical masks, of course, nor N95 respirators, and they're not subject to OSHA respiratory protection standards.
Several county-issued health and safety orders permit employees to wear face coverings while at work.
Given the guidance from the CDC and the recent local orders, employers should allow employees to wear face masks at work.
If an employer allows employees to work remotely, should it have a written telework policy and, if so, what should it include?
We recommend that any employer who permits employees to telework in any situation, including during this pandemic, have a telework policy to manage employee expectations and to ensure that workers comply with wage-and-hour laws. Consider these measures in crafting such a policy:
- Inventory the types of equipment employees have taken home or will need to take home in order to do their jobs remotely, including computers, printers, chargers, office supplies and other tools of the workplace.
- Determine whether employees can perform work on their own devices, and if so, how company use of an employee’s personal device might be compensated.
- Define expectations about employee availability –– must workers be available during the whole work day? May their work hours be flexible? How will workplace communication occur?
- Ensure that employees understand time-keeping protocol and that they follow time-clock requirements as if they were working at the employer’s facility. This is important particularly for nonexempt employees who are entitled to rest and meal breaks under the California Labor Code even when working from home.
If employees aren't working during the health crisis, are they still entitled to group health plan coverage?
Not necessarily. It's important that each employer check its group health plan document (or certificate of coverage if your plan is fully insured) to determine how long employees who are not actively working may remain covered. When that period expires, active employee coverage must be terminated (unless the insurance carrier or self-funded plan sponsor otherwise agrees to temporarily waive applicable eligibility provisions), and a COBRA notice must be sent.
If your plan is self-funded and you want to waive applicable plan eligibility provisions, first you should ensure that stop-loss coverage insurance carriers agree to cover claims relating to participants who otherwise would be ineligible for coverage.
Is COVID-19 testing covered by group health insurance plans?
Yes. The Families First Coronavirus Response Act signed into law on March 18 requires group health plans to provide coverage for FDA-approved COVID-19 diagnostic testing products and related items, and services furnished during a provider visit.
Must an employer keep paying nonexempt employees who are not working?
Under the California Labor Code, the answer is no, for the most part. Minimum-wage and overtime requirements must be respected for all nonexempt employees for all hours worked. If a nonexempt employee performed no work, typically he or she is not required to be paid.
Of course, an employer may have a legal obligation to keep paying nonexempt employees because, for example, they have an employment contract, a collective bargaining agreement, or some policy or practice that is enforceable as a contract.
Must we pay exempt employees who are not working?
Generally, if an exempt employee performs at least some work during the employer’s work week, the salary basis rule requires that he or she be paid the entire salary for that work week. There are exceptions, such as a situation in which the employee decides to stay home for the day and performs no work. The laws regarding the payment of a salary to exempt employees reflect the notion that salaried employees are paid for the general value of their services rather than the precise amount of time on the job. As a result, employers may not dock salaried employees' pay for partial days missed. So, subject to narrow exceptions, exempt employees must receive their full salary for any week in which they perform any work, regardless of the number of days or hours worked.
Some exceptions to the workweek rule allow for salary reductions:
- The employee is absent from work for one or more full days for personal reasons other than sickness or disability.
- The employee is absent for one or more full days because of sickness or disability (including work-related accidents), if the deduction is made in accordance with a bona fide plan, policy or practice of providing compensation for loss of salary occasioned by both sickness and disability.
- The employee is absent for one or more full days due to an unpaid disciplinary suspension imposed in good faith pursuant to a written policy for infraction of workplace conduct rules, for example, written policies prohibiting sexual harassment or workplace violence.
- The regulations do not require employers to pay an employee’s full salary in the initial or terminal week of employment. In such weeks, an employer may pay the employee a proportionate part of his salary for the time actually worked without violating the salary-basis standards.
- There's a reduction in an employee’s work schedule accompanied by a commensurate reduction in pay that does not fall below the minimum salary level. In 1998, Wage and Hour Opinion Letter No. 1905 opined that a fixed reduction in salary effective during a period when a company operates a shortened work week due to economic conditions would be a bona fide reduction and would not change an employee’s exempt status. Similarly, in 1997, Wage and Hour Opinion Letter No. 2026 opined that an employer could reduce hours from 40 to 32 with a commensurate reduction in pay as an alternate to layoffs, and a 1970 opinion letter allowing employers to reduce salaries by 20% for a fixed schedule of five annually recurring four-day weeks did not change an employee’s exempt status. Wage and Hour Opinion Letters dated Feb. 18, 1999 and April 30, 1975 opined that fixed reductions in salaries when a company operates a shortened week due to economic conditions were permissible. In an opinon letter dated Aug. 19, 2009, the Division of Labor Standards Enforcement agreed that a reduction in the work schedule coupled with a reduction in salaries is allowed under a California law.
Although DLSE opinion letters are not binding on the courts, they are followed in proceedings before the California Labor commissioner. Also, opinion letters reduce the risk of a court finding an otherwise exempt employee’s status to be lost when workplace situations mandate a temporary reduction in hours worked coupled with a commensurate reduction in salary.
Given the nature of the pandemic and the stay-in-place orders, an employer’s decision to reduce exempt employees’ hours and a proportionate reduction in salary in order to avoid layoffs mirrors the requirements of the 2009 DLSE opinion letter that was written in response to the economic downturn that started in 2008 and resulted in massive layoffs.
What are the guidelines if an employer wants to reduce an exempt employee's workweek and couple it with a commensurate reduction in salary?
First, we advise structuring any salary reduction as an advanced reduction in the weekly salary rate, and not as deductions from an established salary rate for missed work days. This means that if an employer is contemplating reducing the workweek and reducing an exempt employee’s salary, it must notify the affected employee in writing, giving advanced notice of the reduction in time, and in pay.
Second, a combined work schedule and salary rate reduction should be in place for a substantial period of time. The U.S. Department of Labor (DOL) consistently has stated that short-term reductions in salaries “due to the day-to-day or week-to-week determinations of the operating requirements of the business are precisely the circumstances the salary basis test is intended to preclude.” Recent DOL opinions described unlawful reductions as involving a “fixed” or “permanent” reduction in hours and pay rate. Reductions needn't last forever and they may be reversed after economic conditions or the conditions necessitating the reductions improve. Beyond that, however, there is no standard of brevity about how long a reduction may last while still qualifying as “fixed” or “permanent.”
Given the lack of guidance, we believe partial workweek furloughs should be described as indefinite, lasting as long as economic (or, in this case, pandemic) difficulties continue.
Third, an employer must not adjust salary rates and schedules too often because the DOL disapproves of reductions that are made “for short-term business needs,” or that are “occasional … and transitory.”
Finally, any reduced salary must not fall below the minimum salary rate required for exempt status –– currently $4,160 per month in California.
What's the difference among a furlough, a layoff and a reduction in force?
All three describe actions intended to save costs by reducing a company’s payroll. Even though the terms have been used interchangeably, their true meanings are quite different. See the following subsections for a complete explanation.
Furlough
A furlough is considered to be an alternate to a layoff. When an employer furloughs employees, it requires them to work fewer hours or to take a certain amount of unpaid time off. For example, an employer may furlough its nonexempt employees one day a week for the remainder of the year and pay them for 32 hours instead of their normal 40 hours each week. Similarly, an employer may furlough its exempt employees by reducing the workweek from five days to four days, simultaneously reducing the employee’s salary commensurate with a 32-hour work week. (See the FAQ in the previous subsection.)
An employer may require all employees go on furlough, or may exclude some who provide essential services. The idea is to have most employees share the hardship so that some employees don't lose their jobs.
Employers generally keep furloughed employees’ medical benefits in place for the length of the furlough. We remind employers, however, to consult with their benefit providers for requirements related to stopping benefits.
Furloughed workers may be entitled to unemployment insurance benefits.
Practice tip: A furlough should be structured and limited in time. Employers that furlough workers should have a return-to-work date. Indefinite furloughs are considered reductions in force, and accrued but unused vacation or paid time off must be paid on the furlough date.
Layoff
A layoff is a temporary separation from payroll. An employee is laid off because there is not enough work for him or her to perform. The employer, however, believes that this condition will change, and intends to recall the person when work again becomes available. Typically, employees are able to collect unemployment benefits while on an unpaid layoff, and employers frequently allow employees to maintain benefit coverage for a defined period of time as an incentive to remain available for recall. Employers often use the terms "layoff" and "reduction in force" interchangeably.
Reduction in Force
A reduction in force (RIF) occurs when a position is eliminated without the intention of replacing it, and involves a permanent cut in headcount. A layoff might turn into a RIF, or the employer might choose immediately to reduce its workforce. A RIF occurs through termination or attrition. When an employee is terminated by a reduction in force, the employer must adhere to legal requirements. Reduction in force or permanent layoffs require an employer in California to:
- Issue the employee a final paycheck that includes all wages earned up to the date of the RIF or layoff.
- Pay out all accrued but unused vacation or paid time off (PTO).
- Send COBRA notices to affected employees (from the employer or its third-party administrator).
Failure to adhere to these requirements subjects the employer to penalties.
See Also
References
- ↑ OSHA, Section 13(a)
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