Navigating the questions presented by labor law changes
REPORT FROM THE U.S.—Among the many challenges companies have to navigate during the coronavirus (COVID-19) pandemic, employers and employees are dealing with changing labor laws at the state and national level.
To help explain changes in these laws, HNN reached out to labor experts to explain what the changes are and what they mean for hoteliers as well as how employers should communicate with their employees during the pandemic.
Furloughs, layoffs and unemployment benefits
There is no legal definition for furlough, said Andria Ryan, partner at Fisher Phillips and member of the firm’s COVID-19 Taskforce. It’s a term to describe a person working reduced hours or a reduced schedule, such as working only three days a week or working one week and then having one week off, she said.
“What’s important for hoteliers to know is that one of the major changes many states are making—not all, but many—is for partial unemployment claims,” she said. “They’re either allowing them when they never had before, or they’re changing some of the rules on how to apply for them.”
Most of the time, employers have to apply for it instead of the individual employee, and they would do it on behalf of a large number of employees, Ryan said.
Employees who have been terminated or laid off that would normally qualify for regular unemployment benefits would still go through the normal process as laid out by their state, she said. Many states are waiving their requirements that applicants have to be actively looking for another job to receive benefits.
“They know there’s no other jobs out there,” she said, adding there is an expectation many people will return to their previous jobs once the pandemic ends.
At some point, because of how many people are applying unemployment benefits, the states will run out of their unemployment funds, and that is when the federal government will have to step in, Ryan said.
Laid-off hotel employees have been experiencing a great deal of trouble applying for unemployment benefits, said Ben Begleiter, a coordinator with Unite Here. They’ve lost their jobs, which effectively cuts them off from medical insurance during a global pandemic, he said. States’ unemployment systems were never designed to deal with this kind of volume of applications, and union members have reported that the application process is taking too long or not happening correctly, he said.
As soon as an unemployed person can get through the system, he or she can start the process of getting cash into their hands to help pay their bills and other expenses, he said. Unite Here is in the process of figuring out the resources available to its members city by city and state by state. The organization will create a resources guide to help them figure out what particular benefits that might help them, he said.
Sick and family leave
The Families First Coronavirus Response Act (FFCRA) requires employers of up to 499 employees to provide employees with paid sick leave or expanded family and medical leave for specific reasons related to the pandemic. The U.S. Department of Labor’s Hour and Wage Division oversees the new law, which went into effect 1 April and runs through 31 December.
The FFCRA states that employees of covered employers are eligible for:
- up to 80 hours of paid sick leave at their regular rate of pay if they are quarantined under government order or a health care provider and/or are experiencing COVID-19 symptoms and seeking medical diagnosis;
- up to 80 hours of paid sick leave at two-thirds their regular pay because they cannot work because of a need to care for an individual under quarantine or to care for a child younger than 18 whose school or child care center is closed or unavailable because of COVID-19 and/or “the employee is experiencing a substantially similar condition as specified by the secretary of Health and Human Services, in consultation with the secretaries of the Treasury and Labor;” and
- up to an additional 10 weeks of paid expanded family and medical leave at two-thirds their regular rate of pay where the employee has been employed for at least 30 calendar days and is unable to work because of a need to care for a child whose school or child care provider is closed or unavailable because of COVID-19.
The FFCRA put hotel employers in an uncomfortable position because it imposes upon them the benefit and burden of providing sick leave as well as extended paid FMLA leave to employees affected by the pandemic during a time when hotels are not collecting any revenue, said Hayden Pace, shareholder and CEO at Stokes Wagner. Even though employers would see a tax rebate or credit on the sick leave or extended FMLA paid to employees, they didn’t have the money in the bank to pay the sick leave upfront, he said.
The Department of Labor has amended its guidance to clarify that if there is no work for employees to perform or the business is closed, the benefits under the FFCRA are not available to the employee, Pace said.
“Instead the employee would seek benefits under more standard unemployment methods,” he said.
- For information on how the CARES Act addresses retaining employees, click here.
While both the FFCRA sets up full and two-thirds pay for the different types of leave, the law also sets a daily cap, Pace said. Under the personal paid sick leave at an employee’s regular pay rate, there is a daily cap of $500. Under the paid sick leave to care for an individual and the expanded FMLA at two-thirds the regular pay rate, the daily cap is $200. The $200 cap and two-thirds pay won’t make any employee whole by any stretch, but it’s intended to supplement and lessen any damage caused by the pandemic, he said.
While the FFCRA allows eligible employees to receive up to 10 weeks of paid family leave, the first 10 days are unpaid, so they would need to use PTO if they want to be paid during that time, Ryan said. It also does not expand the number of weeks an employee can take under FMLA, and if an employee has previously taken off six weeks of 12 through FMLA, that employee only has six more weeks available, she said.
The FFCRA places these requirements on companies with fewer than 500 employees because, while it may not be true in all cases, the thought when creating the act was that smaller companies wouldn’t have the same resources as larger companies to provide for employees, Ryan said.
One question management companies in particular should seek legal guidance is how they should count the number of employees they have, namely whether to count them all together or by property, she said. While it may be tempting to group them all together to cross over the 500 employee limit, that could create another problem down the road. By counting all employees for this instance, that could create evidence in a future wage-and-hour claim or union situation in which the employer would prefer to count employees by property, she said.
“That may come back to bite you in the future,” Ryan said.
Communicating with employees
As this situation continues, employers can help their employees engaged and build their loyalty through communication, said Debra Cannon, director of the School of Hospitality at Robinson College of Business at Georgia State University. Conversely, the lack of communication or poor communication can have long-lasting negative effects, she said.
“Employees need consistent, frequent and clear communication—now, more than ever,” she said via email. “In these turbulent times, there is understandably a great deal of anxiety among everyone. Messaging should recognize this degree of anxiety and what information will be of most help to the employees.”
Companies should have communications from different levels within the organization, Cannon said.
A CEO’s message is important to reflect strong leadership, show appreciation for what employees are experiencing and have realistic optimism. These messages should include neither sugar-coated information nor doom-and-gloom themes, she said.
A message from the property level for hotel staff is important as well because it’s closer to home, she said. These should be more detailed about what is being done to get everyone back to work.
“A hotel might want to tell its employees that their sales team is working on booking business when health concerns diminish—if this is the case,” she said. “Or, if true, that no groups have cancelled for mid-summer through the fall, this is good news to share.”
The property-level communications should show care and provide important information, such as in cities that have food banks established specifically for hospitality employees, Cannon said. Employees might also need to need to know about health facilities in the area, transportation information and where part-time work might be available, she said. Send communications in languages spoken by staff and be sensitive to cultural differences, she added.
“I have seen some excellent websites for the hospitality community from local CVBs and hospitality professional associations (hotels and restaurants) that organizations can link to and benefit from their updates on resources,” she said.
Don’t overload employees with too much information, Cannon said. They don’t need to know about how many COVID-19 cases have been reported each day, at least not from their employers, she said.
“Employees need concise, realistic help and messages of hope and care,” she said.