As COVID-19 rapidly changes the economic landscape throughout the country, higher education institutions (HEIs) are facing new, constantly evolving challenges. To address these challenges, federal and state governments are quickly drafting laws and regulations that are impacting colleges and universities, and their employees.
Wage and hour challenges
As HEIs grapple with COVID-19 fallout, including the cancellation of in-person courses, commencements, freshman orientations and other events in the upcoming months, they must remain cognizant of existing wage and hour laws when rolling out reductions in hours or furloughs for employees due to the diminished workload. Under the Fair Labor Standards Act (FLSA), employers need to pay only non-exempt, hourly employees for actual time worked, rather than for time employees are regularly scheduled to work. As a result, reduced-hour schedules or unpaid furloughs are relatively straightforward for these employees, with institutions obligated to compensate them for all hours worked, and nothing beyond that. Perhaps due to public relations concerns, some HEIs have gone beyond their obligations by continuing to pay employees who can neither come to work nor work remotely. Harvard initially offered full pay and benefits for 30 days to direct employees who could not work in light of the campus closure. But in the face of a social media campaign and other negative press, Harvard agreed to provide paid leave and benefits through May 28, 2020, to all direct employees, plus subcontractors. Many schools have enacted similar policies.
Unlike hourly, non-exempt employees, a reduction in hours or furlough may have significant ramifications for exempt, salaried employees. The FLSA exempts these “white collar” salaried employees from overtime premium pay, as their salary is considered remuneration for all hours worked in a week, whether more or less than 40 hours. As a result, employers must pay exempt employees their full week’s salary if they perform any work during that workweek, including work from home. This remains true even while an employee is on furlough, so colleges and universities must communicate clearly to all exempt employees that they cannot perform any work while on furlough—even small tasks like sending work emails—without prior written approval of a supervisor, because any such work would trigger the employer’s obligation to pay that employee a full week’s salary. Where an exempt employee is not furloughed but is working a reduced schedule, employers should be aware that if the reduction in hours causes the employee’s salary to fall below $684 per week, the employee will lose their exemption from overtime premium pay under the FLSA.
Higher education institutions must also consider two other wage and hour requirements. First, any reduction in compensation must only apply prospectively, and employers should give affected employees notice of the impending reduction, in writing. Second, under Massachusetts law, employers must pay furloughed employees all wages owed on the date the furlough is announced, including accrued, unused vacation time. However, the Massachusetts Attorney General’s Office has stated that furloughed employees can defer their accrued, unused vacation time until after the furlough ends. Any such deferral agreement should be obtained in writing. Other New England states may have similar payment obligations when furlough is announced.
Families First Coronavirus Response Act
On March 18, 2020, Congress passed the Families First Coronavirus Response Act, which took effect on April 1. The act’s two provisions relevant to employers pertain to paid sick time (PST) and Emergency Family and Medical Leave (EFML). Private employers with fewer than 500 employees and public employers of any size must provide PST and EFML. Employers will receive dollar-for-dollar federal tax credits for the PST and EFML benefits they pay.
The act requires covered employers to provide 80 hours of PST to an employee unable to work due to:
- COVID-19 symptoms and seeking a medical diagnosis;
- an order from a government entity or advice from a healthcare provider to self-quarantine or isolate because of COVID-19; or
- an obligation to care for an individual experiencing COVID-19 symptoms or a minor child whose school or childcare service is closed due to COVID-19.
The employee’s reason for taking PST will determine their rate of pay during leave. Employees are eligible for PST regardless of how long they have been on payroll.
Covered employers must also provide up to 12 weeks of job-protected EFML to all employees on payroll for at least 30 days who are unable to work because their minor child’s school or childcare service is closed due to COVID-19. The first 10 days of EFML are unpaid, though an employee may use PST during this period. Eligible employees are thereafter entitled to two-thirds of their regular rate for up to 10 weeks, based on the number of hours they would otherwise be scheduled to work. However, the act caps EFML benefits at $200 daily and $10,000 total, per employee.
Notably, the act contains a broad, discretionary exclusion from PST and EFML coverage for healthcare providers, which may affect higher education institutions. “Health care provider” is defined under the act as any employee of various types of medical facilities, including a postsecondary educational “institution offering health instruction,” a “medical school” and “any facility that performs laboratory or medical testing.” This provision, which forthcoming regulations will likely clarify, ostensibly means that an institution that performs medical research or offers classes in healthcare may exclude any employees from PST and EFML benefits.
Emergency expansion of Mass. unemployment insurance
Employees subject to a furlough or reduction in hours may qualify to take advantage of expanded unemployment insurance (UI) benefits. Massachusetts, for example, has waived the usual one-week waiting period for UI benefits, allowing Massachusetts employees affected by COVID-19 (including those permanently laid off) to collect benefits immediately.
The Massachusetts Department of Unemployment Assistance (DUA) has also published emergency regulations to address the onslaught of new UI claims and provide more flexibility for prompt financial assistance to employees affected by COVID-19. All employees who temporarily lose their jobs due to COVID-19 are deemed to be on “standby status” and are eligible for UI benefits, provided they meet certain criteria. A claimant is on “standby” if he or she “is temporarily unemployed because of a lack of work due to COVID-19, with an expected return-to-work date.” The claimant must:
- take reasonable measures to maintain contact with the employer; and
- be available for all hours of suitable work offered by the claimant’s employer.
The DUA will contact employers to verify its employees are on standby status and ask for an expected return date. An employer can request that an employee go on standby status for up to eight weeks, or longer, if the business is anticipated to close or have operations severely curtailed for longer than eight weeks and the DUA deems the requested time period reasonable.
Other New England states have likewise implemented similar emergency regulations to ease the burden on employees who have been furloughed, subject to a schedule reduction, or otherwise affected by COVID-19. For example, Maine enacted emergency legislation with many of the same provisions as the Massachusetts emergency UI expansion, but went an extra step in extending UI eligibility to employees on a temporary leave of absence due to a quarantine or isolation restriction, a demonstrated risk of exposure or infection or the need to care for a dependent family member because of the virus.
Federal and state lawmakers are considering additional legislation to address the workplace ramifications of the COVID-19 pandemic and will likely continue to do so as new and unanticipated challenges develop. HEIs should actively monitor recent developments and speak with counsel as needed to discuss the impact of additional legislation on their workplaces.
Emily P. Crowley and Robert M. Kaitz are employment and trial attorneys at the Boston law firm of Davis Malm.
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