Common Employment Practices Claims Arising from COVID-19

Common Employment Practices Claims Arising from COVID-19

Since the beginning of the pandemic, employers have become experts in drafting and implementing multiple policies and procedures addressing a wide array of issues. Circumstances from COVID-19 have influenced remote work, layoffs, furloughs, pay cuts, altered workplace conditions and many more changes. The uncertainty of COVID-19 has left employers at an elevated risk for employment-related exposures and claims, including wrongful termination, discrimination and retaliation. The following insights address the most common of these risks.*

Safe and Healthy Workplace Claims

During March 2021 alone, the Occupational Safety and Health Administration (OSHA) received 56,000 complaints and 8,000 safety violation claims. The top COVID-19-related OSHA violations last year revolved around hazard communications, respiratory protection and personal protective equipment (PPE). Allegations ranged from:

  • Unsafe workplaces
  • COVID-19 contraction and/or death
  • Employer failure to decrease COVID-19 exposure
  • COVID-19 spread within the workplace
  • Employer inability to provide adequate social distancing

Check out Safety Tips for Building Owners/Employers Amid COVID-19 for tips to keep workplaces safe.

Leave of Absence Claims (FMLA and FFCRA)

In 2020, the federal government passed the Families First Coronavirus Response Act (FFCRA), which included the Emergency Family and Medical Leave Expansion Act and Emergency Paid Sick Leave Act. The legislation, in response to the pandemic, provided additional provisions to traditional paid and sick leave. While the FFCRA expired on Dec. 30, 2021, the American Rescue Plan Act (March 11, 2021) extended some FFCRA provisions and added additional qualifiers for sick leave, including:

  • Time off to receive a COVID-19 vaccine
  • Sick leave for recovery from any COVID-19 vaccine-related illness or condition
  • Approved time off while awaiting pending COVID-19 test results, if the employee was exposed

The FFCRA expressly incorporated existing Family and Medical Leave Act (FMLA) and Fair Labor Standards Act (FLSA) remedy provisions. An employee wrongfully denied expanded leave or not paid during the leave will have a cause of action to recover damages (lost wages, salary, benefits and other compensation) or actual monetary losses resulting from the denial of leave (e.g., the costs of child care) with interest. Likewise, employers that fail to comply with the Expanded Paid Sick Leave Act will be made liable to remedy provisions under the FLSA.

Given the extensive exposure, employers should consider speaking with legal counsel in order to update and implement leave-related policies. Review our Employment Laws & Regulations: COVID-19’s Impact on Benefits & Employment for more information.

Earnings Claims

Employers have restructured their workforce including salaries and compensation to fit their current needs. Be aware that reorganization can influence FLSA claims related to salary and hour reductions. Altering work arrangements and compensation structures may be essential for organizations to remain open. Unfortunately, these changes could inadvertently alter worker classification statuses. These issues could influence an FLSA claim.

Injustice/Discrimination Claims

The federal and state governments have enacted numerous legislations to protect employees from discriminatory practices. Employees who were laid-off or furloughed during the pandemic could challenge selection as an adverse employment action under anti-discrimination laws. Employers should cautiously use objective means when selecting employees for furlough or layoffs. Records should also be maintained, indicating the criteria utilized, and evaluate any disparate impact from the decision.

Additional liability derives from an employer’s failure to reasonably accommodate American Disability Act (ADA) protected workers. These claims could be based on a rejection for remote work accommodations. Review this Equal Employment Opportunity Commission’s (EEOC) publication to receive more guidance on pandemic preparedness and the ADA.

Retaliation Claims

Retaliation occurs when an employee participates in a legally protected activity and were subjected to a negative employment reaction for their involvement. An employer could be liable for retaliation if the employee can prove the protected action is related. Many pandemic-related retaliation claims revolve around unsafe working conditions, COVID-19 exposures and accommodation, or leave request denials.

To combat future retaliation claims, employers should establish or ensure anti-retaliation policies. Procedures should include reporting processes that describe how and to whom these claims should be reported. The policy should also provide concise procedures for investigations.

Most importantly, protecting your organization from a retaliation claim means proper documentation. Providing extensive documentation for the employer’s rationale behind employment decisions could heavily influence a successful retaliation defense.

Wrongful Termination Claims

Pandemic-influenced furloughs and layoffs have led to a major increase in wrongful termination claims. These allegations can derive from numerous COVID-19-related conditions. The most common pandemic-related wrongful termination claims include:

  • Expression of concerns regarding safety
  • Termination influenced from medical leave due to virus contraction or hospitalization
  • Compliance with local shelter-in-place orders
  • Requests for COVID-19 ADA accommodations

To mitigate the potential for a wrongful termination claim, employers should proceed carefully upon receiving employee complaints. Additionally, meticulous records of complaints, the investigation process and the ultimate reasoning behind the termination should be maintained. Organizations can also protect their businesses through protective liability coverage.

Download our Employment Practices Liability Checklist to evaluate your organization’s risk.

Disclosure of Confidential Information Claims

In order to maintain the privacy of COVID-19-related medical documents, the ADA requires that all medical information about a particular employee be stored separately from the employee's personnel file. An employer may store all medical information related to COVID-19 in existing medical files. This includes an employee's statement that they have the disease or suspect they have the disease, or the employer's notes or other documentation from questioning an employee about symptoms.

Limiting Future Risk

COVID-19 has resulted in many liabilities for employers. Being aware of potential issues and proceeding accordingly is imperative to limit future risk. Employers should consider the following:

  • Establish a return-to-work plan that incorporates federal and local safety guidance (e.g., CDC, OSHA and state health authorities) regarding personal protective equipment, workspace hygiene, social distancing measures, etc.
  • Always consult with legal counsel when developing/updating employee-related policies and procedures to verify compliance. Ensure counsel is involved when undertaking recall, rehire and job proposals. This stage is the epicenter of employment-related claims.
  • Confirm employment policies and procedures are impartial and equal.
  • Ensure proper employee communications, especially for management who will be responsible for implementation.
  • Maintain the confidentiality of all medical-related information provided by employees in compliance with federal and state guidance.
  • Train managers and supervisors on new COVID-19-related policies and procedures.
  • Continually monitor federal, state and local guidance, as well as legislative enactments.

Download our Employment Practices Liability Scorecard to better understand the level of risk your organization faces on a daily basis in relation to employment practices liability.

Contact your risk and insurance professional or member of our team to review and manage your employment practices liabilities.

*We strongly advise employers to seek legal counsel guidance when subjected to any employment practice allegations.

Common Employment Practices Claims Arising from COVID-19 the beginning of the pandemic, employers havebecome experts in drafting and implementing multiple policies and proceduresaddressing a wide array of issues. Circumstances from COVID-19 have influencedremote work, layoffs, furloughs, pay cuts, altered workplace conditions andmany more changesRisk MitigationProperty & Casualty InsuranceCOVID-19Yes