You don’t have to pay employees for time they didn’t work, right? So if your employees are out sick, or, let’s say, they are in quarantine because of the COVID-19 pandemic, they’re not working, so you don’t have to pay them, right? But wait a minute, there’s the Families First Coronavirus Response Act (FFCRA), so you would have to pay, right? But wait again. The FFCRA only applies to businesses with under 500 employees, so maybe a large employer doesn’t have to pay? What if the employee is very new? What if s/he didn’t even start working yet (so s/he hasn’t even been on the company’s payroll for 30 days or more) and so probably wouldn’t be eligible for FFCRA benefits? So then, you don’t have to pay for that time, right? Are you dizzy yet? I don’t blame you if you are. It’s not such a simple question and the answer isn’t so simple, either. One such employer is facing this question in a lawsuit filed last month. Read on to learn more, and, to get some takeaways. The case is Jane Doe v North Pacific Seafoods, et al. Here’s what allegedly went down: North Pacific Foods is a Seattle-based seafood processor, that hires approximately 50o workers during its peak salmon season. North Pacific Foods hired approximately 150 seasonal workers from Mexico and Southern California to work in one of its salmon canneries in Naknek, Alaska. Before they could start their jobs, however, the workers were told they must go to the Crowne Plaza LAX Hotel, to be tested for COVID-19 and then quarantine for at least 4 days. Once they arrived at the hotel the workers allegedly had to wait in a crowded hallway, use shared pens to fill out paperwork, and were therefore allegedly in close contact with each other for several hours, after which, they went to individual rooms, where nurses administered COVID tests.
The workers allege in the complaint (which you can read here) that four days later (the day they were supposed to travel to Naknek) they were told that three workers had tested positive, at which point, all 150 were required to quarantine for an additional 11 days. The workers allegedly were told that if they left their rooms they would be fired immediately. (Allegedly some workers did leave and were in fact fired). The hotel has also been named as a defendant in the lawsuit. Workers also allege that the hotel deactivated the workers’ keycards so that if they left their rooms they would be effectively stranded at LAX, that they were fed no more than two meals a day, were barred from ordering room service, or accessing other hotel services, or leaving the premises to get any other food or supplies. The hotel denies these allegations. Beyond an occasional snack, the workers allege they received “no compensation or remuneration”. The workers have filed a class-action lawsuit, claiming, among other things: false imprisonment, nonpayment of wages, failure to pay minimum wage and overtime, negligence and unlawful business practices. The workers’ attorney estimates that if the court awards damages to the workers the compensatory damages for the 14 days of quarantine alone “could top $1.1 million”.
OK, that sounds like a big mess, doesn’t it? Assuming for now that the allegations of no pay are true, do the workers have a viable claim? It sounds like this company has more than 500 employees, in which case it would not owe these workers wages under the FFCRA. Even if Northern Pacific has fewer than 500 employees, they were just starting out and wouldn’t have been on the company’s payroll for the minimum 30 days. So under FFCRA, they’d be out of luck.
While the FFCRA will not be of any help to these workers, federal and state wage and hour laws probably will. Wait. These employees weren’t doing any work though, were they? Well, actually that time spent in quarantine may well be “time worked” under the FLSA and under state wage and hour law. Huh? How can that be? Those workers were waiting, not working. Since when is waiting time counted as time worked and therefore payable? The US Supreme Court actually decided cases — oldies but goodies– ( Armour & Co. v. Wantock, 323 U.S. 126, 133 (1944) and Skidmore v. Swift & Co., 323 U.S. 134, 136 (1944) on this very issue and determined that whether the time is compensable depends on whether the employee is “waiting to be engaged” or “engaged to wait”. If the former, it’s not “time worked”. If the latter, though, it is time worked and the employer must pay.
So when is an employee “engaged to wait”? If the employee essentially is under the employer’s control — or at least the use to which the employee can put the time waiting is sufficiently controlled by the employer, then the employee is “engaged to wait”, and the employer has to pay the employee for that time. If the workers’ allegations are true, the fact that they couldn’t leave their rooms, let alone the hotel puts them very much under Northern Pacific’s control, and Northern Pacific may very well be on the hook for that time. Since the employees were quarantined for 2 weeks around the clock, that could very well add up to more than 40 hours a week for each employee, which means — you guessed it– overtime pay at 1.5 times either the minimum wage or the workers’ regular hourly rate, whichever is more. At best I’ve only touched the tip of the iceberg. I wouldn’t want to be in charge at Northern Pacific right now, would you?
So here are our two big takeaways:
First: Don’t lose sight of regular wage and hour laws. Yes, the FFCRA is a big deal, and yes, you should be clear about whether your company may be subject to it. If so, then yes, your company must comply. At the same time though, just because your company isn’t subject to the FFCRA (if it’s not) or just because your employees with COVID issues may not meet FFCRA eligibility criteria doesn’t automatically mean you don’t owe them pay if they can’t work due to such issues.
Second: If you have employees on-call or otherwise waiting to work, you may have to pay for that time. If you allow the employee to wait from home or anywhere they choose, and if they can do whatever they want with that waiting time, they may be “waiting to be engaged”, and that is likely not “time worked”. On the other hand, if they are so restricted in movement and use of their time that they are effectively under the company’s control, they are “engaged to wait”, the waiting time is likely time worked and you’ll have to pay. I am, of course, referring to employees working in non-exempt positions, meaning jobs that are subject to minimum wage and overtime requirements. This discussion would not apply to exempt positions, but before you argue that any such employee’s job is exempt (and therefore is not eligible for overtime) consult your friendly employment counsel to ensure that you correctly classified the job(s) in question as exempt.
I’m thinking that’s enough wage and hour law for now.
Enjoy your holiday weekend, and stay safe!
Watch the latest video clip in my series, “Ask the Employer’s Lawyer: My Employee Has Exhausted All Her FMLA Leave Time. What do I do?
Watch my television interview on Stop My Crisis with Vivian Gaspar.
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