Legal Corner
Wage Payment Mistakes COVID-19 Is Going to Get Your Company Sued for Wage Payment Mistakes Beginning in March of 2020, companies
everywhere were forced to comply with local shelter and closure orders, as well as alter their operations to respond to the negative economic fallout from COVID-19. Companies rushed to keep their businesses going by implementing new, essential and often untested business practices. Common changes businesses made to their workforce included temporarily furloughing employees, reducing employee hours, reducing employee pay and having all or more employees work from home. While these four strategies have in many ways become part of the “new normal”, prior to COVID-19, many employers did not frequently implement these measures and as a result of their unfamiliarity with such strategies, made mistakes. In particular, furloughs, hour and pay reductions and widespread work from home can result in unknowing wage and hour violations. These mistakes are particularly problematic given that both Rhode Island’s and Massachusetts’ wage laws carry with them automatic and mandatory treble damages. To make matters worse, under federal law, Rhode Island law and Massachusetts law, a successful employee in a wage and hour action is entitled to their attorney’s fees, which can be the largest portion of damages. Finally, employers often implemented these practices on a widespread basis, making grounds for a class or collective action particularly fertile. Thus, employers everywhere are well advised to stop double checking whether their floor tape is a full six feet apart out of fear of a lawsuit based upon virus spread and start double checking whether they have the appropriate protections in place against what is likely to become the latest wage and hour lawsuit trend.
1. Your Hourly Workers are Working (Too Much) from Home. Exempt, salaried employees have been working from
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home for a long time and often access company emails and systems on their home equipment and phones. Prior to COVID-19, non-exempt, hourly employees often did not access communications from home, starting their day when they turned on their computer after arriving to work and ending their day when shutting down to catch their train home. With COVID-19, employers everywhere started providing employees, regardless of their exempt status, the ability to work from home. Without the ability to see when these employees start and finish their day, a real opportunity to work outside of normal working hours arose. Compounding this problem is that employees may be more incentivized to work out of both the fear of losing their job and the lack of other things to do given the COVID-19 climate. Unfortunately, non-exempt employees, unlike their exempt, salaried counterparts, must be paid time and a half for all hours worked over 40 hours per week. In addition, a fair amount of Rhode Island hourly employees must still be paid time and a half for work on Sunday (with a very small fraction still being subject to the Massachusetts blue laws). Importantly, this stands true even when the employer is not instructing the employees to work additional hours. In other words, if your employee is doing the work, you owe the time. Overtime is not the only risk that has popped up from nonexempt employee work during this time. Non-exempt employees are generally paid on an hourly basis. In many industries, employers dictate a set amount of hours the employee is expected to work, such as 35 hours per week, and expect employees to clock-in and clock-out accordingly. However, due to COVID-19, some employee’s hours were cut back to a part-time basis. This practice was particularly common in both Rhode Island and Massachusetts, because employers could cut an employee’s pay and time
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