Much has been written about what steps employers can and should take in the face of the global pandemic. In an effort to better understand what employers actually are doing, Dykema recently sent a flash survey to employers, asking how they are grappling with return-to-work issues, while still operating with essentially skeleton crews.
The survey, which was distributed on April 24 and closed on April 29, fell in between the 13-day exhaustion of the $349 billion first round of loans offered through the Paycheck Protection Program and the opening of the $310 billion second round of PPP loans.
The results provide a glimpse not only of what employers were doing during that critical period, before all of the first-round PPP loans were funded, but what difficulties may lie ahead as employers try to return to what many believe will be the new normal.
Of the employers responding to the survey, 60% had applied for a PPP loan, the majority of which had 51 to 500 employees. Of those who had applied for the PPP loans, 61% reported that they had received the loan by the close of the survey.
The number of employers who reported granting the FFCRA’s Emergency Family and Medical Leave was very small, but that number could increase dramatically as states begin to let businesses reopen. More than 70% of those who responded indicated that they had not yet granted any such leave; of those who had granted the leave, 77% had granted the leave to fewer than 5 employees.
Although the end of the school year is near for most employees, the prospect of returning to work while childcare providers are not yet open, or are operating at reduced capacity, will likely result in an increase in the number of employees requesting EFML, which is currently available until Dec. 31. This expectation is supported by the increasing number of client calls regarding employee requests for and inquiries regarding EFML.
With this in mind, employers should act now to prepare the documentation required of employees requesting such leave – documentation that the Internal Revenue Service has indicated will be required of those requesting tax credits related to payment for such leave.
Additionally, employers with fewer than 500 employees, who are generally required to provide the FFCRA’s paid leaves, are required to post a poster published by the Department of Labor advising employees of their rights to the leave and providing contact information for the DOL in the event of questions or complaints.
The survey also asked employers regarding staff reductions and furloughs –options considered by many, especially in the time before PPP loans were funded. Many employers have been forced to make difficult decisions about whether to return employees from furlough or move forward with permanent layoffs for fear that business will not soon return to pre-pandemic levels. Although 78% of responding employers indicated that they were “essential” businesses within the meaning of state and local closure orders, approximately one-half of those surveyed had reduced staff, with most of the employers reducing through furloughs, as opposed to layoffs. Employers with 51 to 500 employees responded at the highest levels of those implementing employee reductions.
For employers who were already recalling employees at the time of the survey, 32% witnessed considerable cooperation from their employees. However, there are some warning signs. 28% of responding employers indicated that they had experienced resistance from employees who want to continue in furlough status and collect unemployment benefits – specifically, the $600 per week federal supplement — and another 26% indicated that they had experienced resistance from employees who are fearful of returning to work.
Both experiences strongly suggest that employers must carefully prepare communications to employees regarding recall, both with respect to the potential impact on unemployment benefits if employees refuse the request to return to work and with respect to precautionary measures to be implemented upon the return of employees.
More important than the communication of precautionary measures to employees, employers need to identify the sources of “best practices” to be implemented, the logistics for implementing those practices and the legal and practical issues related to implementation of those measures. While many employers have collected and reviewed materials suggesting the use of Personal Protective Equipment and COVID-related questionnaires, including exposure and travel-related questions, not as many have evaluated the more mundane issues, such as employee training related to PPE and hygiene, the potentially daily process of requiring all employees to complete questionnaires prior to beginning work, the location of such pre-shift processes (so as to avoid possible exposure in the workplace), the time associated with the process and potential follow-up questions and the protection of any health-related information learned during the pre-shift procedures.
All of these issues and more must be carefully considered before recalling employees to the workplace, where coworkers and customers face the risk of exposure as the result of what may later be second-guessed as inadequate protective measures by the employer.
Interestingly, despite reporting a near-term desire to reopen businesses, 58% of responding employers said that they planned phased reopening over a one-month period, 21% plan to delay reopening until all of the Centers for Disease Control guidelines are satisfied and 21% indicated that they intend to return to normal operations quickly.
Of most concern, with respect to the reopening of businesses, only one-half of those responding have established objective criteria to determine the order in which employees will be recalled to work. Establishment of such non-discriminatory criteria is an important step in protecting employers from future liability.
Employers should establish and document those objective criteria now, so that they are not trying to remember why one employee was selected over another when a Charge of Discrimination is filed. Part of this process will likely include discussions regarding increasingly common inquiries regarding an employer’s ability not to recall those employees perceived as being vulnerable to infection, such as those over the age of 65 and those with various health conditions.
Employers should be aware that the implementation of such criteria, without a request by employees who are able to provide documentation supporting a request not to return to work, can result in discrimination claims by those not permitted to return, while also suggesting that the “best practices” implemented by the employer to reduce the risks associated with a return to work are already anticipated by the employer to be ineffective.
Because the regulatory environment in which we live is changing rapidly, and often without notice of what was changed, employers should bookmark key materials from the CDC, Occupational Safety and Health Administration, DOL and IRS related to best practices and mandated leaves of absence. Employers should refresh the link at each decision point during the planning process. This will prevent employers from making decisions based on outdated materials that may only be days old.
That said, during this period until regulatory materials are approved in more final form, employers would be wise to print and retain materials upon which decisions were made; in doing so, decisions that may later be challenged as being noncompliant with subsequent guidance can be explained by the production of the guidance in effect at the time that a decision was made.
Many employers may feel as if they have lived a lifetime in just the past two months, working long hours trying to keep businesses open while taking steps to care for the employees who allow the business to operate. What the survey results indicate, though, is that much work remains to be done. Such work is certainly required for the reopening that is to take place over the next few months, but the “playbook” being developed may prove just as necessary in the fall, should the forecasts for a return of COVID-19 prove true. As the saying goes, “hope for the best, but expect the worst.”
Ramon D. Bissmeyer is head of the labor and employment group at Dykema Gossett, PLLC and is based in San Antonio.
Donna K. McElroy is also a member in the San Antonio office of Dykema.