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COVID-19 Impact on the Fair Labor Standards Act of 1938

Introduction

The Fair Labor Standards Act of 1938 (“FLSA”) is a federal law that establishes minimum wage, overtime pay, recordkeeping, and youth employment standards that affect employees in the private sector and in federal, state, and local governments. Since its enactment, the FLSA has seen many interpretations, changes, and amendments, as current events and various societal factors have impacted its provisions. Recently, the FLSA saw new interpretations and clarifications in response to COVID-19. On March 18, 2020, President Donald Trump (“President Trump”) signed the Families First Coronavirus Response Act (“FFCRA”) into law in an effort to provide relief to employees and employers negatively affected by COVID-19. Since the FFCRA directly impacts employee pay by offering different paid leave options, the United States Department of Labor (“DOL”) answered frequently answered questions regarding the FFCRA’s impact on the FLSA.

When happens to exempt employees when they are directed to take vacation or leave without pay during office closures?

Exempt employees are entitled to receive their full salary for any week in which they perform any amount of work, with limited exceptions to this rule. An employee will not be considered to be paid “on a salary basis” if deductions are made from the predetermined compensation because the office is closed during a week in which the employee actually performs work. If the employee does not perform any work during a week, that employee is not entitled to their salary. The FLSA does not mandate employers provide vacation time; however, even if employers do offer such leave, there is not a prohibition against an employer requiring its employees to take employer-provided leave at specified times. Thus, a private employer may direct its exempt employees to take employer-provided vacation in the event of an office closure, as long as the employee receives payment equal to his or her guaranteed salary. If the employee does not have accrued benefits or using vacation time would result in a negative balance of benefits, the employer must still pay that employee his or her salary in the event of an office closure for that employee to remain exempt.

Can employers require their employees to work from home?

Yes, employers can require their employees to work from home. Employers must compensate employees for hours worked at the same hourly rate or salary that was paid before the office closure. For non-exempt employees, employers must compensate employees at minimum wage and must pay overtime for hours worked in excess of 40 hours in a workweek. If employees are unable to telework, they may be eligible for leave permitted by the FFCRA. The DOL also suggested that employers consider other options such as staggered work shifts or rotating schedules to promote social distancing.

Additionally, the event teleworking requires additional equipment, employers cannot require employees to pay or reimburse the employer for such items that are business expenses of the employer if it would reduce the employee’s earnings below minimum wage.

If you feel your rights under the Families First Coronavirus Response Act or the Fair Labor Standards Act have been violated, or if you have any questions regarding your employment rights, please contact the experienced Birmingham employment law attorneys at Wrady Michel & King. You can contact us online or by calling us at (205) 319-9724.