Employers throughout the country are immersed in legal, employee relations, HR, PR and government-response issues due to the Coronavirus (COVID-19) pandemic. It is essential that employers in every industry have go-to resources they can rely on for guidance on the health and safety front. They also require guidance regarding the day-to-day obligations they must address, even in stressful times. This is particularly important where many employers are operating with reduced staffs who are physically separated or working remotely from home as the concepts of “social distancing” and “teleworking” take root. Employers are cautioned that they are not shielded from liability if they violate the basic employment law rules because their attention is diverted to COVID-19 issues. Plaintiffs’ attorneys have shown little sympathy for “unintentional” violations of the law, regardless of the circumstances. And, the Private Attorneys General Act (“PAGA”), a law that has resulted in thousands of lawsuits against businesses, has not been eliminated by COVID-19.

This article identifies some of the legal obligations employers should pay close attention to, even while responding to the pandemic. Each of the issues examined below can form the basis of substantial liability and penalties if overlooked or deferred now.

1. Basic Wage And Hour Responsibilities

While assessing and administering their responsibilities during this crisis, employers are first reminded that they should not lose sight of their ongoing obligations to comply with numerous wage and hour obligations. This includes their responsibility to maintain lawful practices and to (1) pay wages in a timely manner, (2) pay final wages (including wages owed as of the date of a separation, layoff or resignation) immediately, as required by the Labor Code, (3) abide by the standards governing vacation pay, sick pay, and overtime, including the special considerations triggered by layoffs, and (4) reimburse employees for business-related expenses they necessarily incur. The business expense issues may be unusual given the fact that many employees are temporarily working remotely from home (teleworking/telecommuting) and may incur unusual expenses in order to perform their duties. Expenses incurred for business-related activities performed using a cell phone, home computer, office supplies, and mileage for work-related travel, etc. should be considered. Nonexempt employees who work from home remain subject to California’s meal and rest period rules and must record their work time, as well as the times their meal periods begin and end. It can be argued that exempt and nonexempt employees who are laid off, even temporarily, are entitled to accrued vacation and paid time off benefits along with their “final” wages for work performed before the layoff. (For detailed information regarding wage-hour obligations, readers are encouraged to review the relevant sections of the Wage and Hour Manual for California Employers, by Attorney Richard J. Simmons of Sheppard Mullin. The 2020 edition of the Manual was published in January.)

2. The Parade Of Other Legal Requirements

Wage and hour issues are extremely important, but are not the only concerns that employers must address. They should also assess the relevant obligations that exist under the federal and California OSHA rules, employment discrimination concerns, and issues relating to employee privacy, immigration, and leave of absence laws. Employers should review and consider updating their Injury and Illness Prevention Programs (“IIPPs)” to ensure they incorporate the elements required by California law. None of these laws have been suspended or repealed because of the pandemic. It certainly would help if the government enacted measures to relax, suspend or repeal burdensome government standards to assist businesses to get back on their feet and return employees to paid status, although it is unclear if any relief will be provided. The threat of penalties under the Labor Code and the Private Attorneys General Act of 2004 (“PAGA”) remains very real and plaintiffs’ attorneys have not stopped daily online filings of PAGA actions during the pandemic.

3. State And Federal WARN Rules

Notably, despite the general sense that layoffs and furloughs resulting from the COVID-19 pandemic and government “stay-at-home” and “shutter-in-place” orders were absolutely unforeseeable, the state and federal “WARN” laws must be carefully evaluated if an employer is considering or has implemented a staff reduction, layoff, furlough or any type of reduction in force that affects the minimum number of employees specified in the laws. WARN is the acronym for the “Worker Adjustment and Retraining Notification Act.” Governor Newsom’s recent Executive Order N-31-20 (March 17, 2020), addresses the obligation to provide WARN notices under California law, but only from a limited perspective. It should be read in tandem with Executive Order N-33-20 (March 19, 2020), the Governor’s “stay home” order and any applicable local measures adopted in cities and counties where employers do business. Many employers are adopting a “better safe than sorry” approach to providing WARN notices, even while maintaining that specific exceptions to the notification rules apply. As discussed in a separate article, the California Department of Industrial Relations (“DIR”) issued guidance regarding these issues on March 23, 2020. This is just another area where employers should consult with their legal counsel and make decisions promptly.

4. The DIR’s COVID-19 FAQs

The California DIR has issued guidance regarding its enforcement positions in a new document entitled, “Coronavirus Disease (COVID-19) – FAQs on laws enforced by the California Labor Commissioner’s Office.” The 10 FAQs address (a) the use of California paid sick leave, (b) travel to “high-risk” countries, (c) reporting time pay, (d) salary obligations to exempt employees in the event of work interruptions due to a shutdown, (e) retaliation, and (f) participating in Labor Commissioner actions remotely. The FAQs briefly mention vacation pay, but do not address the payment of vacation if there is a layoff or termination.

5. HR 6201 - The Families First Coronavirus Response Act

On March 18, 2020, President Trump signed the “Families First Coronavirus Response Act” into law. It will take effect on April 1, 2020, and creates new paid sick leave and expanded family leave obligations for employers with fewer than 500 employees. The legislation and the important new rules it creates are discussed below in a separate article. That article also reviews the March 24, 2020 guidance issued by the U.S. Department of Labor.

6. Practical Note

The ever-changing legal landscape reminds employers that the ”new norm” is here. The rapidly changing and evolving rules will require employers, attorneys, HR and payroll professionals to remain constantly vigilant. They must ensure that existing obligations are met and new, ubiquitous obligations are considered and implemented. Castle Publications, LLC and the ALERT will seek to offer guidance along the way. We also note that Sheppard Mullin has created a COVID-19 task force to assist its clients to navigate this new legal terrain.

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