Wage and Hour Considerations When Developing Modified Work Arrangements in Light of COVID-19

TLNT

Ann Knuckles Mahoney, Associate in the Employment, Labor & Workforce Management practice, in the firm’s Nashville office, authored an article in TLNT, titled “Wage and Hour Considerations When Developing Modified Work Arrangements in Light of COVID-19.”

Following is an excerpt:

Whether it is to provide an accommodation to a work schedule request, reduce costs in light of the economic impact of COVID-19, or enhance safety and health measures in the workplace, employers are reassessing work schedules and compensation arrangements as a result of COVID-19.

Some employers are shifting work hours, others are reducing hours and/or compensation, while still others are reclassifying salaried exempt employees to hourly non-exempt employees in light of schedule changes or salary reductions.

But before making such changes, employers should review federal, state, and local wage and hour laws to ensure they remain in compliance while implementing such changes.

Considerations Under the Fair Labor Standards Act (FLSA)

Employers that are restructuring their employees’ work schedules, compensation, and responsibilities should keep in mind that such changes may have implications under the FLSA that rarely come up in everyday circumstances. Employers should carefully consider the following issues prior to making such changes to avoid any pitfalls under the FLSA.

When modifying schedules, companies should keep in mind that exempt employees must generally be paid their full weekly amount if they perform any work during the week, with limited exceptions. Thus, it will become critical for employers considering staggering work schedules, for example by having exempt employees work one week and not the next, to make sure that those exempt workers who are not supposed to be working during the week are not performing any work and that any work-related contact with them during the week off is de minimus, ot too trivial or minor to merit consideration.

Any changes to compensation must be prospective and employers must ensure that a salary reduction does not bring the employee’s annual salary below the salary basis threshold under the FLSA (currently $35,568 annually or $684 per week, or a higher amount under applicable state laws as discussed below).