As Massachusetts begins to loosen restrictions placed on businesses due to the COVID-19 pandemic, many “non-essential” employers are preparing to reopen and rehire laid-off or furloughed workers. The following employment law issues may arise as employers begin to rehire laid-off or furloughed employees:
Which Employees Return?
Employers have considerable latitude to determine which employees return, when they return, and how the return takes place. Employers can decide, based on business necessity, whether to bring back the same workforce or a workforce different in size and composition. When rehiring some, but not all, laid-off employees, employers must ensure the selection process is based on legitimate business needs and free from any unlawful discrimination. The return to work may be gradual or in stages to allow for the slow return of business and to prepare for safety measures such as social distancing, facial coverings or other health precautions for employees and customers. Certain employees may be permitted to work remotely or from home with the approval of the employer.
Employers are not required to rehire any particular at-will employee absent an agreement to do so. Employers may be obligated to return furloughed employees to work depending on the nature and terms of the furlough as communicated at the time the furlough was announced.
Written Offers Of Work
Employers should communicate written offers of work to individual laid-off employees stating the date, time and place to return to work, the number of hours offered, the position and pay offered for each returning employee. Employees should be informed that social distancing, face coverings and hand washing will be in effect at the workplace. A deadline to accept the offer should be clearly stated. Employees who fail to respond before the deadline can be considered to have no interest in continued employment.
What If An Employee Declines An Offer To Return To Work?
It depends on the reason.
If a laid-off employee is sick with the virus, has virus symptoms, has a serious health condition or is caring for a child under 18 whose school or daycare is closed, the employee should be told to remain at home using any leave, sick time or vacation time that may be available. Such an employee must notify the employer when they are healthy and available to work.
If a laid-off employee declines an offer to return to work without good reason, the employee should be informed that, by refusing available work, they have quit their employment. (Such employee is likely to lose unemployment benefits.)
Unemployment Insurance Benefits
Many laid-off employees are receiving state unemployment insurance benefits plus an additional $600.00 per week in Federal Pandemic Unemployment Compensation (“FPUC”). Unless extended, FPUC expires July 25, 2020. Individuals who refuse to return to work because they prefer to collect benefits, or because their weekly benefit is higher than their regular wages, are not eligible for unemployment benefits. Refusing available work for the purpose of collecting benefits is not reasonable in any circumstances and may constitute fraud.
Changes In Pay and Hours
The economic impact of the pandemic has caused many employers to reduce the pay and hours of returning employees. Employers, unless restricted by union or individual contracts, are generally free to change the wages and hours of employees. Such changes may have legal consequences. For example, changing the pay or work duties of exempt employees (“executive, professional , administrative employees and outside salespersons”) may cause such employees to lose their exempt status and become subject to overtime pay under federal and state laws. Exempt employees, such as salaried managers, who perform “too much” non-exempt work may jeopardize their exempt status.
Also, while employers must accurately record hours worked by hourly employees, questions may arise as to the hours actually worked by employees working remotely or from home during and after a lay-off. In addition, reducing work hours may cause employees to lose coverage under employer sponsored health insurance plans, which often contain a minimum work-hour requirement.
PPP Loans and Workforce Restoration
Employers receiving loans from the federal government under the Paycheck Protection Program (“PPP”), who reduced their workforce between February 15 and June 30, 2020, must restore the headcount of employees in order to qualify for PPP loan forgiveness. At present, 75% of loan funds must be expended on payroll costs to qualify for loan forgiveness.
Please call Kevin Callanan (781-878-1604) or Christopher Callanan (617-330-7575) with questions you may have about the foregoing subjects.
This material is for informational purposes only and is not intended to constitute legal advice.
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