I have been writing about wage hour issues that are implicated or raised by the continuing COVID-19 situation. Well, here’s another one. I warn that as businesses start to open up (or not), employees (and, more to the point, plaintiff-side lawyers) will be seeking to sue employers on a number of grounds, some of which rely on circumstances that might have well been beyond the control of their employers. To start with, employers must be aware that they will not receive any “benefit of the doubt” from aggrieved workers nor will these workers have any sympathy or understanding for their employers and not sue them to be “nice.”

Another basic lesson. The doctrine of force majeure is not going to excuse employers from compliance with wage-hour laws, especially wage payment laws. This doctrine, which applies when traumatic, unanticipated events (earthquake, hurricane) occur, may excuse compliance with a particular contract but it does not excuse non-compliance with the FLSA and state laws. Put differently, there is no provision in federal or state laws that authorize an employer not to pay minimum wage or proper overtime. These laws have not been changed or placed into limbo by the crisis and continue to operate at full force, although perhaps under the surface.

A hidden issue is that of employee (or, put better, employer) business expenses. If employees are working from home (as I am) they may well need supplies (e.g. copy paper, computer accoutrements, etc.) and the issue is whether the employee or employer must pay for them. In many States, such as New Jersey and California, the wage payments laws are very strict and will view such items as employer expenses, because the work that will be done using these items ultimately will inure to the benefit of the employer. Thus, forcing employees to pay for these items, or making deductions from salaries/wages for such items, will violate the law. If these deductions are being taken from a group, or class, of employees, there is an incipient class action brewing.

A corollary issue to this is the complex problem of paying employees properly for teleworking. I have already blogged about this but it bears emphasizing. When non-exempt workers respond to, or write, e-mails, after their normal work hours, those minutes/hours are converted to work time. If those minutes push the weekly work hours beyond forty, then it is overtime. Again, the specter of a class action rears its ugly head in these situations. The test is whether there was employer compulsion, explicit or, more importantly, implicit and whether the activity primarily benefits the employer, rather than the employee. In this regard, simply asserting that this activity is de minimis and therefore not compensable is a very dangerous placing of all the eggs in a shaky basket. One obvious answer, perhaps draconian, is to order non-exempt workers not to answer or write any e-mails or do any work after their shift ends.

The Takeaway

The courts and the various Departments of Labor are open, although operating at a diminished capacity. Wage hour cases and complaints are still being filed and submitted. Depending how employers respond to and proactively (or not) deal with wage-hour/compensation issues during the virus and the re-opening will have a significant impact on whether there is a new wave of wage-hour (e.g. overtime) cases coming forward. I recommend employers consult counsel to conduct complete internal audits of their compensation practices to see where they stand.

Do it soon…


For information on addressing the impact of the Coronavirus pandemic on the workplace, as well as other legal matters affecting your business, visit Fox Rothschild’s Coronavirus Resource page.