How do I compensate hourly workers during the coronavirus pandemic?

By Rick Bell

Mar. 17, 2020

No doubt there are lots of questions regarding compensation for hourly employees during the COVID-19 compensation

Many employers want to do right by their hourly workers and offer them fair compensation while they temporarily shutter their workplace or curtail operations. Meanwhile, there are uncertainties regarding who gets paid and who doesn’t.

One valuable resource that offers clarity for employers regarding hourly employees is on the Department of Labor website. The comprehensive “U.S. Department of Labor Issues Workplace Guidelines for Coronavirus Outbreak, Including Specific Guidance on FMLA, FLSA and FECA” provides detailed information valuable for remaining in compliance as well as offering insight to compensating employees.

Under the Fair Labor Standards Act direction is this guidance:

Pay to Non-Exempt Employees During Business Closures. Under the FLSA, employers are obligated to pay non-exempt employees only for the hours worked, not hours the employee otherwise would have worked if the employer’s business had not closed. If telecommuting or working from home is provided as a reasonable accommodation, the employer must pay non-exempt workers the minimum wage, and at least time and one half the regular rate of pay for overtime hours, for hours telecommuting or working from home. For more information on this topic, please see our previous post on employers’ considerations in response to coronavirus (available here).

Kate Bischoff, a Minneapolis-based employment attorney and HR consultant, suggested that employers first must decide what positions are crucial to maintaining operations. 

“Then, there’s really no good way to go about it,” Bischoff said. “Fairness would dictate that you furlough/lay off the part-timers first, then the least senior, but there’s no good way.”

Also read: Solving the concern over clean time clocks with a mobile solution

Other considerations include what to do about volunteers, she added, and those who may be in the high-risk groups (over 60 or with pre-existing conditions).

“But make sure there isn’t a disparate impact on any protected group more than others, like married people, minorities and women. We’re in uncharted waters,” Bischoff said.

According to a spokeswoman for Portland, Oregon-based Think HR, employers and managers may offer paid time off to those employees who are unable to work due to a decrease in business, and they may select whom to offer this PTO to based on seniority, full-time status, employee classification, or job type.

“There are no hard and fast rules for deciding what groups to include or where to draw the line on tenure,” she said. “Employers, however, should take care not to violate (or appear to violate) anti-discrimination law, and they may want to consider how their decision will affect employee morale presently and in the future. Employers should also keep in mind that pay requirements may change as new laws are passed in response to the pandemic.”

Insurance and risk-management consultancy Gallagher just released its guidance on Coronavirus Pandemic Preparedness that includes five steps to minimize business disruption and safeguard employees.

“As pandemics spread it is important now, more than ever, to have an actionable business plan in place to help guide your employees and your business through the uncertainty of pandemics,” the report states.  

Cleanliness is a given.

If employees must clock in at the workplace,keep the keyboard or time clock as clean as possible. 

Employers working with Chicago-based employment law attorney William R. Pokorny are taking a variety of different approaches.

“Those that have some amount of paid time off or paid sick leave, either employer-based or as required by state and local paid sick leave laws, are for now having people use their available leave,” Pokorny said. “Some are extending additional leave — for example, 14 days — specific to the coronavirus situation. The leave is generally paid out based on the employee’s regularly scheduled work hours, so someone who usually works 20 hours in a week would get 20 hours of sick leave for a week. It varies widely by employer.”

Bischoff added that even employers trying to do the right thing for their hourly workers may not be doing enough.

“Trying to do the right thing is hard at this point,” she said. “Employers need to do what they can for their people.”



Rick Bell is Workforce’s editorial director.

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