Pay Rules And The Pandemic

Workers are facing a new workplace during the COVID-19 pandemic.  Whether it be working away from the job site or at work following safety protocols, no one is unaffected.  The California Labor Code still protects workers in this new environment.

Defining the Relationship

Businesses are retooling in how they deliver their products or services to customers.  This includes using drivers to deliver products and outside agencies to perform cleaning and other services necessary to maintain operations during the pandemic.

• Joint Employment – California law says businesses that use workers supplied by other businesses, like gig economy businesses and staffing agencies, are “jointly liable” to the workers for any unpaid wages and failure to provide workers’ compensation insurance, so they are on the hook too.
• Independent Contractors– California’s independent contractor test still applies to whether services performed may be done as an independent contractor. Even short-term, part-time work, and/or at home work in a new job position may not be enough to avoid the law treating the worker as an employee.

Changing Compensation

Businesses changing compensation by cutting pay, benefits, or work time all face legal limitations in doing so.

• Minimum Pay.  Businesses may not reduce the pay for any exempt (salaried) employee below the minimum salary level threshold for the exemption, which during 2021 is $1,120 per week for large employers, and cannot be prorated or reduced for less than full time work.  Employers cannot pay below the minimum wage for any work performed by a non-exempt (hourly) employee.
• Changing from Salary to Hourly.  Reclassifying an employee from exempt to non-exempt means the employer must maintain time records, compensate for weekly and daily overtime work, and provide meal and rest breaks.
• Different Types of Pay.   Any increase in pay for hourly employees must be included in the “regular rate” fir calculating overtime.  This includes “hazard” or other incentive pay, whether paid via a flat or variable bonus or hourly.  For employees paid two or more rates during the workweek, the regular rate is the “weighted average” which is determined by dividing the total earnings for the workweek, including earnings during overtime hours, by the total hours worked during the workweek, including the overtime hours.

COVID-19 Safety Protocols

Essential operations are required to implement health and safety measures under the government shelter-in-place/shutdown orders.  These requirements may trigger other legal obligations.

• Compensable Time (Off-The-Clock Work) – The time spent putting on and taking off personal protective equipment (donning and doffing) may be compensable. The same may be true of hand-washing and taking the temperature of employees.  If so, requiring employees to do this on meal or rest breaks may trigger the need for paying premium payments.
• Reimbursing Expenses – Employers must provide or reimburse for the cost of any required equipment.  This includes personal protective equipment required at the worksite.
• Reporting Time Pay.  Employees who report for their regularly scheduled shift but are required to work fewer hours or is sent home must be compensated for at least two hours, or no more than four hours, of reporting time pay.

Working Remotely

Many workers now work from home or away from the office.  California’s strict wage-and-hour requirements still protect those working away from the job site.

• Recording Hours Worked.  Hourly employees who typically clock in and out at the worksite, may have a hard time doing so at home.  Businesses still must have records of all time worked, including all meal breaks just as though workers were at the job site.
• Reimbursement for Workstation and Connectivity.  Telecommuting usually requires a home office setup – e.g., computer, internet connection, phone, and other supplies – depending on the job.  Companies must provide employees or reimburse them reasonable expenses incurred for items needed to work from home.  Reimbursement is required for an employee’s personal cell phone and voice and data plan when the phone is required for business purposes.  This is more frequent with remote work and required tools (like Zoom, Skype, etc.) for connectivity.
• Travel Time.  Travel time — i.e., where there is an “assigned” workplace and the employee is required to travel to another site – must be paid, subject to an offset of the time it normally takes an employee to commute to his/her assigned workplace.  Commute time – i.e., the time spent commuting from home to work and from work to home – is not considered “hours worked” and, thus, is not compensable.  Any work during the day that requires hourly employees who is working from home to drive (like depositing money at the bank) may be compensable.

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Current or former employees with questions about their own situation should contact Colby Law Firm.