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Reopening Your Business: 9 Steps To Reduce Labor Risks

Author: Date: 05/28/2020

Categories: Corporate and Business Law, Covid-19 News and Resources, Employment Law & Litigation

Closeup young woman setting open sign at the shop glasses for welcome the customer in to the coffee shop, small business owner and startup with cafe shop, installing open and close conceptRe-opening your business is the hot topic as local and state governments relax COVID-19 shelter in place orders. Regardless of industry, most small businesses need to address core labor issues and evaluate what additional industry-specific concerns should be addressed. Both valid and specious employment claims are already on the rise due to a combination of new laws, economic pressures, and a tight job market. 

In Part 1 of this series, we focused on preparation to reopen in a safe and effective way. We suggested you evaluate your mistakes and victories during the pandemic, take steps to protect your employees and customers, and communicate effectively with employees. In part 3 of this series, we focus on planning for the very real possibility that you will have to shut down again. 

While tasks like cleaning and social distancing are critical, you also need a “back to basics” approach to set your business up for success and minimize the risks of employment law claims. 

1. Refresh Supervisor Training. 

We put supervisor training at the top of the list because well-informed supervisors are the “eyes and ears” and the employer’s day-to-day spokespeople for success with employees. Remind supervisors of the company’s “open door policy” if there is one.  Every supervisor should understand the basics of:

  • coaching and motivating employees for high performance
  • managing attendance and leave
  • recognizing and reporting bias, discrimination and harassment
  • documenting and managing performance 
  • addressing employee conduct and discipline consistently 

Many states have mandated sexual harassment training since the #MeToo movement surfaced. If this training has not been implemented, now is the time. 

2. Adapt Leave Policies for the New (Temporary) Laws. 

As the country moves from crisis through a sustained pandemic, ignorance of new laws like the Families First Coronavirus Response Act will not be excusable. If you believe your business is exempt from compliance, check with legal counsel to confirm the extent of the exemption. 

Employers need to update Employee Handbooks, physically post and electronically distribute required notices to employees, and adapt methods of communication for timely and effective attendance tracking, submission and approval of leave requests, and maintaining confidentiality of leave requests which may contain health information. 

If your business doesn’t have a robust employee portal, new leave forms should be easily accessible as fillable-PDF forms which both the employee and manager can sign digitally. HR or payroll will need to properly track and compensate sick leave and family leave in different ways to withstand scrutiny by the Department of Labor and potential public audit if the employer accepted government loans. 

3. Set Expectations for Wage-Hour Compliance. 

Whether non-exempt employees are onsite or remote, employers must become crystal clear about their expectations for scheduled work time, timekeeping, meal and rest periods as required by state and local law, and whether off-schedule work is permitted without advance permission. 

In environments requiring new or expanded expectations of changing clothing, handwashing, and/or more personal protection equipment than simple masks and gloves, the employer should address whether donning and doffing is work time, especially if employees have to wait their turn, for example to access a limited number of handwashing stations.  

When teams are comprised of exempt and non-exempt employees, informing exempt employees of current policies for non-exempt employees can head off misunderstandings before they occur. 

We are counseling many clients who want to offer reasonable flexibility to employees, easing worries that they are being taken advantage of or that inconsistency will open the door to legal risk.  

4. Self-Audit Employee Classifications. 

We usually advise employers to conduct a self-audit of employee classifications under the Fair Labor Standards Act every year and under attorney supervision every three years. Paying a salary is not enough to classify an employee as “exempt” if one or more of the “duties” tests is not met. A common mistake is using the so-called “administrative” exemption for an employee who does not have sufficient discretion on important matters. 

In the current flux of working conditions, we are advising all clients to review every position which has experienced a change in hourly rate or salary, change in duties, or re-alignment of role to another team or department. 

Update the job descriptions, not only for documentation purposes, but as a vehicle for communication with the employee. Ensure that the new FLSA salary threshold of $35,568 annually or $684 weekly is actually being paid given that many employers have implemented creative, ongoing cuts in salary or work time as well as furloughs. 

5. Hire With Care. 

As the pandemic continues, employers should not be surprised to experience elevated needs for hiring new staff to replace workers who fall ill or drop out of the workforce. Many smaller employers rely heavily on manual processes for screening candidate submissions and in-person interviews. 

Seize the conversion to digital submissions as an opportunity to upgrade application forms for “ban the box” laws, which prohibit a prospective employer from making inquiries about an applicant’s criminal background before a designated point in the selection process, and wage history laws which regulate when and how and an applicant’s voluntarily-provided wage history may be used in determining salary. 

Every person who participates in screening, interviewing or checking references should be oriented to how the employer judges qualifications and “fit” and the EEOC guidelines on permissible questions and bases of decision-making as well as how to respond to voluntary disclosures of age, health, disability, veterans status and other classes protected by federal, state or local laws. A growing number of cities and counties have expressly articulated more protected classes than the federal laws, including gender identity. 

6. Onboard Virtually. 

Effective onboarding sets the tone for a successful employment relationship, and is particularly critical if a new employee does not have the benefit of coming to a fully-staffed workplace to learn the culture and daily routines.  

Onboarding activities must be adapted without cutting corners which lead to greater risk.  For example, even though the employee handbook may be shared and acknowledged electronically, be sure someone highlights non-discrimination, open door, and other employee relations topics and gives the employee an opportunity to ask questions.  

Further, the U.S. Department of Homeland Security has announced several temporary relaxations for employment verifications: 

  • Any employer which is operating fully remotely may review I-9 documentation via email, fax or videoconference during the national coronavirus emergency. In-person review is deferred until June 19. To avail itself of this option, the employer must be operating fully remotely, must document each employee’s remote onboarding and telework policy, and must enter COVID-19 in box 2 of the I-9 form. There is no change to the number or types of documentation required. 
  • All employers may accept certain expired “List B” documents such as state-issued drivers licenses as acceptable documentation.  The employee will have to present a valid renewal document within 90 days of the temporary policy expiring.
  • Flexibilities for a variety of H-2A and H-2B visa holders and their employers are available through September 11, 2020.

7. Re-visit Onboarding After Breaks in Service. 

If an employee was temporarily furloughed or laid-off and then rehired, decide which parts of onboarding should be updated based on reduction or break in service.  Prime candidates for review are:

  • state requirements for new hire reporting
  • background checks
  • I-9 verification
  • W-4 forms
  • emergency contact forms
  • re-enrollment forms for health benefits, insurance plans and retirement plans. 

Employees are likely to ask whether waiting periods can be waived, whether they should get preferences related to seniority and length of service, and whether prior leave balances will be reinstated.   

8. Beware of the WARN Acts

Most small business clients, and indeed some lawyers, will not be aware of the Worker Adjustment and Retraining Notification Act (WARN Act) which offers protection to workers, their families, and communities by requiring covered employers to provide notice 60 days in advance of covered plant closings and covered mass layoffs. 

Many states have similar laws or executive orders with different thresholds and notification schemes. The purpose of such laws is to prevent workers, their families and state officials from large, unexpected layoffs which the employer intends or can foresee. 

WARN violations are enforceable through civil penalties, backpay and benefits which can add up to considerable sums for a cash-strapped business. 

Call us if employer’s headcount if you are contemplating changes to your workforce. We will help you identify which laws to follow based on your headcount at the time of the cuts, whether cuts are temporary or permanent, the length and extent of temporary furloughs, and the likelihood that returning employees will be furloughed again and in what timeframe.  

9. Avoid “benign” discrimination. 

Most clients recognize that they shouldn’t explicitly make hiring and employment decisions on the basis of age, sex, pregnancy, disability, race, national origin or other protected classes. 

That said, in their efforts to promote safety and protect employees from COVID-19 itself, employers and supervisors may fall into the trap of treating higher-risk employees differently or denying opportunities for working hours, assignments or work requiring travel to, say, employees who are primary-caregivers for their children whose schools and day care providers are closed. 

Employers should also be mindful that discrimination can be proven by both direct evidence and disparate treatment. When in doubt whether a facially neutral policy or decision may adversely affected a protected class, contact us for an attorney-client privileged disparate impact review. 

Feeling overwhelmed? For most clients, these nine steps merely mean fine-tuning the employee relations and compliance efforts which are already in place. We encourage you to call us. We will assess your risks, help you prioritize within your organization’s bandwidth and budget, and provide practical solutions to reduce your liability.  Natasha M. Nazareth can be reached at 240.778.2310 or nnazareth@mcmillanmetro.com. Ginny Cascio Bonifacino can be reached at 240.778.2315 or gcbonifacino@mcmillanmetro.com.