Of all the things employers need to worry about amid the coronavirus fallout, the potential for employment-related lawsuits may prove to be the most warranted.
Lawsuits are already being filed.
The first involves a hairstylist from South Jersey who sued her employer, Hair Cuttery, for withholding pay for work performed after salons nationwide closed due to the pandemic.
Hundreds of other Hair Cuttery employees across the country joined the suit citing Fair Labor Standards Act (FLSA) and state law violations, and alleging the salons misled them about their ability to use paid leave. After an investigation by the U.S. Department of Labor’s Wage and Division, Hair Cuttery’s parent company, Creative Hairdressers Inc. was ordered to pay more than $1.1 million in back wages.
A Storm Is Brewing
According to BPHR’s Director, Lisa Salcido, SPHR, SHRM-SCP, the Hair Cuttery case “is just the beginning of the storm.” COVID-19 is fertile ground for lawsuits “because employment decisions that were made affected a large number of employees and were made with little guidance.” Lisa anticipates that “COVID-19 will keep the courts busy for years to come.”
In the early days of the outbreak, employers were forced to make critical decisions to protect their workforce and their livelihood. Transitioning to remote work, furloughing or laying-off employees, and implementing pay cuts were some of the issues employers addressed within a short period of time. It is not surprising that many of those decisions have resulted in opposition by employees, and in some cases, legal retaliation.
5 Employment Lawsuits to Watch
Lisa warns of the following areas for potential litigation that employers should prepare for:
Employers have obligations under federal and state safety laws to provide a safe and secure work environment for employees. This extends to remote work and employers are still required to provide accommodations, which may have been overlooked.
The new leave laws under the Families First Coronavirus Response Act (FFCRA) were challenging to interpret. The speed in which they were introduced opens the possibility for employees to claim that they did not receive the leave they were entitled to, or that they were retaliated against for taking leave.
Many privacy laws have been tossed aside during the pandemic. In the past taking an employee’s temperature was considered a medical examination and generally not allowed by employers, it may now become the new normal. How employers handle medical information may be challenged in courts.
Wage & Hour
There are so many issues with tracking time of non-exempt employees working remotely, mainly because it is difficult to manage when employees are out of sight. Working from home is still work, and time worked still needs to be accurately tracked. Mistakes related to the overtime rule are likely to surface, if employees’ salaries were cut, resulting in employers owing back and overtime pay.
Benefits and COBRA
Lawsuits may result if employers laid-off employees, but failed to provide COBRA notices. Or, in the case of furloughed employees, if employers didn’t review their benefits plans to understand if they are still covered.
Documentation Is More Important Now Than Ever
An employer’s biggest risk is the employment decisions that were made without proper documentation. Whether it was cutting salaries, laying-off staff, or allowing certain employees to work from home, employers need to have good reasons to support those decisions, and appropriate documentation to support it.
When it came to keeping employees safe and communicating with them about their rights, employers with documentation will fare better in the courts. Even better if there is signed acknowledgement from the employees.
As we move forward toward recovery, employers should learn from past mistakes and prepare for the future. The best defense against an employment-related lawsuit besides documentation is having a competent, knowledgeable HR resource by your side. Schedule an appointment to learn more about Balance Point’s HR consulting service.