What to Consider Before Implementing a Health Insurance Surcharge for Unvaccinated Employees

Contribute by Kelly Haab-Tallitsch, September 7, 2021

stethoscope wrapped around health insurance policies, soft focus

The recent announcement that Delta Airlines will begin imposing a $200 per month health insurance surcharge on unvaccinated employees has prompted many employers to consider whether a similar surcharge may be an alternative to mandating COVID-19 vaccinations for employees.

But the myriad of laws governing group health plans require that employers tread carefully. This is an approach that comes with a multitude of regulatory requirements and may carry legal risks. Employers implementing a health insurance surcharge must comply with federal anti-discrimination laws requiring exceptions for medical conditions or a sincerely-held religious belief, and should consider the impact of a surcharge on the health plan’s affordability under the Affordable Care Act (ACA).

Exceptions for Medical Conditions and Religious Beliefs

Premium surcharges or other incentives tied to a group health insurance plan trigger the Health Insurance Portability and Accountability Act’s (HIPAA) wellness program rules.  HIPAA prohibits employers from charging employees different premiums based on a health factor; however, an exception exists for wellness programs, allowing employers to charge higher premiums or offer incentives to get employees to take certain actions or meet specific health-related goals, provided the wellness program meets certain requirements.

The requirements for wellness programs are different depending on whether a program is “participatory” or “health contingent.”  It is unclear whether a COVID-19 vaccination surcharge would be considered a “participatory” or “health contingent” wellness program. In order to avoid potential penalties for noncompliance, an employer should assume it is a health-contingent wellness program, similar to smoking cessation programs that impose a surcharge on smokers. Under a health-contingent wellness program an employer must offer a “reasonable alternative standard” to employees that are unable to receive the COVID-19 vaccine due to a medical condition. This means that these employees must be allowed to avoid the surcharge by meeting a different requirement. One example would be allowing an employee to avoid the surcharge by undergoing weekly or biweekly COVID-19 testing or by watching a video on vaccine safety and the dangers of remaining unvaccinated.

Under Title VII, employers must also provide an accommodation to an employee that is unable to receive the COVID-19 vaccine due to a sincerely-held religious belief.

ACA Affordability and Surcharge Limits

Under the HIPAA wellness plan rules, a surcharge cannot exceed 30 percent of the cost of employee-only coverage under the health plan. This is a fairly high limit and typically does not present an issue. But employers subject to the ACA employer mandate and considering surcharges should also confirm that the cost of the health plan including the surcharge still meets the ACA affordability requirements. In order to avoid triggering a penalty under the ACA, the cost for employee-only coverage under the lowest cost health plan option can be no more than 9.83% of the employee’s income. Depending on current health plan premiums, even a small surcharge can cause premiums to exceed the affordability threshold for lower wage employees.

Next Steps

An employer considering implementing a vaccine surcharge should consider the alternative standard(s) the employer is willing and able to offer employees who cannot receive the vaccine due to a medical condition or sincerely-held religious belief, taking into account the administrative requirements of the alternative standard (i.e., monitoring of weekly COVID-19 test results), and analyze the impact of the proposed surcharge on the employer’s compliance with the ACA affordability requirements. Employers should consult with employee benefits counsel before implementing a health insurance surcharge to ensure compliance.

Mandating Vaccines in the Workplace: How to Implement a COVID-19 Vaccine Policy

Contributed by Suzannah Overholt, August 26, 2021

Syringe and vial bottle with COVID-19 corona virus vaccine drug

Now that the Delta variant is surging, employers are venturing into the arena of mandating that their employees take the COVID-19 vaccine. But deciding to mandate vaccination and actually implementing such a requirement is no easy feat.

Rolling out a vaccine requirement involves a delicate balancing act. Employers are gauging the overall vaccine hesitancy in their workforce, the number of employees who may resign rather than be vaccinated, and the difficulty of filling the vacancies. Those considerations have led some employers to wait to impose a vaccine requirement until their competitors do so.

The realities of these considerations are apparent in nursing homes’ response to the announcement that their facilities will be required to mandate the vaccine for their employees or risk losing federal funding. Nursing homes are now concerned that, if the rest of the health care industry is not subject to the same requirement, they will lose even more employees than they have already. 

So how should an employer face this issue?  Some employers have chosen to use an incremental approach. First, they ask employees to let them know if they are vaccinated or plan to get vaccinated. As we reported previously, the EEOC has authorized such inquiries, but the information regarding an employee’s vaccination status must be kept confidential. 

Some employers offer incentives before mandating the vaccine.  As we noted in our previous blog, offering incentives for employees to be vaccinated has been approved by the EEOC. The amount of the incentive depends upon whether the employer is administering the vaccine (lower incentives allowed to avoid coercive effect of incentive) or whether it is being administered by an entity independent from the employer (higher incentives allowed). If the first round of incentives does not achieve the desired effect, some employers have increased the incentive.

Another approach is to implement an education campaign to increase awareness about the benefits and actual risks of the vaccine. This is generally done by directing employees to web sites and other resources with objective information about the vaccines.

Finally, if the incentives and education efforts are not sufficient, employers may mandate the vaccine. The concepts that apply to fostering positive employee relations are a good guide for how to do this. 

First, employers should develop a clear policy that lays out the following: 

  • A definition of what constitutes being vaccinated. Generally speaking, this would be receiving both doses of a two-dose vaccine or a dose of a single-dose vaccine. 
  • A clear deadline for being vaccinated.
  • A requirement that any booster doses also be taken and a timeline for those. 
  • The availability and process for requesting a disability or religious based exemption.
  • Whether PTO will be allowed for time spent taking the vaccine and for any potential side effects.
  • What disciplinary action will be taken for failure to comply.

Once the policy is established, communication is key. Employers should reiterate the benefits of the vaccine and explain the risk to everyone if someone is not vaccinated. A written communication should be distributed to all employees stating the basis for the policy and the expectations.

Finally, the policy must be implemented. Proof of vaccination provided by employees must be kept confidential. Requests for exemptions must be reviewed and acted upon.  Employees who do not comply with the vaccine requirement or accommodations granted pursuant to an exemption must be disciplined. 

Obtaining the advice of qualified counsel before embarking on this process is advisable.

Wisconsin Coffee Retailer’s Employees Vote to Join the Electrical Union!?!?!

Contributed by Peter Hansen, August 25, 2021

Wisconsin employers discounting the possibility of organizing campaigns and unionization in their workplace, take note: the International Brotherhood of Electrical Workers’ (IBEW) recent victory at Colectivo Coffee Roasters Inc. demonstrates that unions are desperate to increase their membership, targeting industries and workers outside their typical areas – and winning.  Following a hotly-contested organizing campaign that saw multiple elections, a tie, and challenged votes, the IBEW will now represent a bargaining unit comprised of baristas, roasters, and bakery and warehouse workers.

The IBEW’s involvement in this hospitality/service industry organizing campaign is itself noteworthy. The IBEW, which typically targets workers in the construction, telecommunications, and manufacturing industries and is not exactly associated with food service workers, will now be representing the largest unionized coffee chain workforce in America.  This pivot to targeting workers in other industries signals, at the very least, an aggressive drive to increase membership — even in a Right-to-Work state. The construction trades unions (such as the IBEW) can have much greater resources than some of the more traditional unions focused on the hospitality and service industry, and if this is in fact the initial stages of a push into industries less familiar with their aggressive organizing campaigns, employers would be wise to contact experienced labor counsel immediately.

The fact that a food retailer employer is unionized is also generally surprising, given the industry is historically resistant to unionization.  Whether this result portends an increase in organizing campaigns in the industry remains to be seen, but it wouldn’t be all that surprising to see a renewed push in light of this relatively high-profile victory.

The Colectivo Coffee election results are a lesson and a warning for all employers in general and those in Right-to-Work states (e.g., WI).  If you think unionization can’t happen to you, think again.  Any employer preferring to remain union-free not only must have a counter-organizing plan developed and in place, but management in all levels must be working that plan every day.

The Fight for Restroom Rights – Illinois Courts Follow National Trend in Prohibiting Sex Discrimination of Transgender Employees and Requiring Equal Access to Bathrooms

Contributed by Michael Wong, August 19, 2021

16306823 – 3d illustration of scales of justice and gavel on orange background

On August 13, 2021, the Illinois Second District Appellate Court upheld the Illinois Human Rights Commission’s determination that Hobby Lobby violated the Illinois Human Rights Act (IHRA) by refusing to allow a transgender employee to use the restroom that matched her gender identity and awarded $220,000 in emotional distress damages against Hobby Lobby.

In this case, Hobby Lobby’s policy was to limit employees and customers to using the restroom that matched their designated sex at birth. The plaintiff was born a male, but during her employment with Hobby Lobby transitioned to a female. She underwent medical treatment to transition and began using a female name and coming to work in feminine dress and makeup.  She also obtained a court order legally changing her name to her female name and obtained an Illinois drivers’ license and social security card which identified her by her female name and as being a female.

Hobby Lobby changed her personnel records and benefits information to reflect that the plaintiff was a female, rather than a male.  However, Hobby Lobby continued to refuse to allow her to use the women’s restroom.  When the plaintiff used the women’s restroom, Hobby Lobby disciplined her by issuing her a written warning and ordering other employees to report her if she tried using the women’s restroom. 

While the case was being litigated, Hobby Lobby did install a unisex restroom, and allowed employees and customers to use either the bathroom corresponding to their sex or the unisex bathroom. However, Hobby Lobby continued to prohibit the plaintiff from using the women’s restroom that matched her gender identity.

The court found that the IHRA’s definition of “sex” as “status of being male or female,” is not limited to an individual’s sex at birth or genitalia.  Rather, the use of the term “status” indicates a “state of being that may be subject to change.” The court further held that by defining “sex” broadly as a status, without any reference to anatomy, birth certificates, or genetics, the Act allows for the consideration of gender identity as one of the factors that may be used to determine sex.  Based on that reasoning, the court upheld the determination that Hobby Lobby’s actions had discriminated against the plaintiff based on her “sex,” as well as gender identity.

In making this finding the court rejected a number of arguments made by Hobby Lobby including that its bathroom ban was necessary to protect other women from the plaintiff.  While Hobby Lobby made assertions regarding a complaint by a women against the plaintiff for verbal disparagement and unwanted touching, such as side hugging and touches on the arm, back and leg, and alleged complaints by two female employees that they would feel uncomfortable with the plaintiff using the women’s restroom, the court held that Hobby Lobby failed to provide any evidence to support those assertions, such as discipline or written statements, or any evidence that the plaintiff’s use of the women’s restroom would pose a safety risk to other women. Indeed, the court held that if Hobby Lobby were employing someone who genuinely posed a safety threat to others, its employees and customers would certainly demand a more effective safeguard than preventing that person from using the restroom. The court further recognized that courts have firmly rejected the argument that the fears or discomfort of others may serve as adequate justification for a discrimination policy (i.e. the presence of a transgender person in a bathroom poses no greater inherent risk to privacy or safety than that posed by anyone else who uses the restroom).

While the court’s decision could be appealed and argued along the line of Hobby Lobby’s religious beliefs, the 2020 United States Supreme Court decision that transgender employees are protected from workplace discrimination and 2021 United States Supreme Court decision to decline to hear a case in which lower courts had upheld an employee’s right to use the restroom matching their gender identity would likely support the Appellate Court’s decision.

It is noteworthy that in upholding the Illinois Human Rights Commission’s award of $220,000 for emotional distress damages, the court also remanded the matter back to the Commission for a determination of any additional damages and attorneys’ fees that may be due – thus potentially increasing the plaintiff’s damage award.

This ruling makes clear to Illinois employers that the IHRA requires employees be allowed to use the restroom that matches their current gender identity.  Additionally, it makes clear that providing a unisex restroom does not excuse an employer from still allowing an employee to use other restrooms matching their current gender identity.

It also serves as a reminder to review and consider the following actions:

  • Revising anti-discrimination policies to make clear it prohibits discrimination based on sex, gender identity (including transgender and transitioning), and sexual orientation;
  • Ensuring dress code and restroom policies are not discriminatory;
  • Implementing procedures to address when an employee discloses they are transitioning or have a different gender identity, including changing an employee’s gender on personnel records and benefit information, maintaining confidentiality of personal medical information, recognition of different pronouns, and working with the employee on what, if any, communication is made to other employees regarding the employee’s transition or gender identity;
  • Ensuring that diversity and inclusion training addresses sex, gender identity (including transgender and transitioning), and sexual orientation.

To avoid potential missteps and pitfalls, it is advised that employers consult with experienced legal counsel in addressing these issues. 

OSHA Revises Its Mask Guidance and Encourages Vaccination of Employees

Contributed by Rebecca Dobbs Bush and Matthew Horn, August 17, 2021

Blue medical face masks isolated on white

Following the Centers for Disease Control’s updated mask and COVID-19 guidance dated July 27, 2021, OSHA finally updated its own mask and COVID-19 guidance on August 13, 2021. The updated guidance can be viewed here.  

Under the new guidance, OSHA recommends that employers require their employees—even those who are fully vaccinated—to wear masks when indoors in areas of substantial or high transmission of COVID-19.  Areas of substantial or high transmission are determined by county and updated by the CDC daily. The CDC’s updated map showing transmission rates by county can be viewed here.  As of today, the vast majority of the counties around the country are considered areas of substantial or high transmission, thereby implicating the updated guidance. 

The new guidance also recommends that fully vaccinated individuals with known or suspected exposure to COVID-19 be tested 3-5 days after exposure, and wear a mask while indoors for 14 days or until they receive a negative test result. Additionally, OSHA emphasizes that vaccination of individuals is the best way to prevent severe illness or death from COVID-19, and recommends that employers consider adopting policies that require workers to get vaccinated or to undergo regular COVID-19 testing – in addition to mask wearing and physical distancing. Prior to this updated guidance, OSHA had only published this recommendation for healthcare employers.

If your business operates indoors in an area of substantial or high transmission, we recommend that you require all employees and visitors to wear a mask regardless of vaccination status. However, given the language of its press release and updated guidance, OSHA appears hesitant to enforce this updated guidance—likely acknowledging that many employers will struggle with the implementation of ever-changing mask rules based on local transmission rates.

Government Loans and Grants to Businesses – Beware of the “Fine Print”

Contributed by John R. Hayes, August 13, 2021

25983831 – hand giving money to other hand hands giving receiving money

Starting from the early days of the COVID-19 pandemic both federal and state governments have provided assistance to businesses struggling with the economic impact of the pandemic.  Specifically, federal, state, and public assistance in the form of grants and forgivable loans have proliferated to provide much needed financial support to businesses negatively affected by the pandemic. For example, on August 11, 2021 Governor Pritzker and the Illinois Department of Commerce and Economic Opportunity (DCEO) announced the $250 million Back to Business (B2B) grant program, its second grant program for businesses, which aims to deploy small business recovery grants for businesses hit hardest by the COVID-19 pandemic. This is just one of many grants and forgivable loan programs implemented by the government (both state and federal) to assist businesses that have been adversely impacted by the COVID-19 pandemic.

But, before jumping at that public money, businesses should be aware of the “fine print” found in government-sponsored grant or loan programs. For example, some of the stipulations required of a business accepting a B2B grant are:

  • A recipient of the grant may be required to participate in an audit of the program at a future date;
  • A recipient must maintain financial records required for tax and regulatory compliance;
  • The grant proceeds are taxable; and
  • A recipient must have complied, and will continue to comply, with all relevant laws, regulations and executive orders from the state and federal government, including the social distancing guidelines as promulgated by the Executive Orders of the Illinois Governor.

The application for the B2B grant is not available at this time (applications will open on August 18, 2021) but the previous grant program from Illinois, the Business Interruption Grant (BIG) Program provides a roadmap as to what a business must “certify” in order to receive the grant.   Some of the requirements for BIG were:

  • The recipient will continue to comply, as applicable, with the provisions of the Contract Work Hours and Safety Standards Act (40 U.S.C. 327-333), the Copeland Act (40 U.S.C. 276c and 18 U.S.C. 874), the Davis-Bacon Act (40 U.S.C. 276a-276-1), the Drug-Free Workplace Act of 1988 (44 CFR, Part 17, Subpart F), the Fair Labor Standards Act (29 U.S.C. 201), and the Illinois Prevailing Wage Act (820 ILCS 130/1);
  • The recipient is not presently suspended, debarred, proposed for debarment, or declared ineligible by any state or federal department or agency, and will not enter into a contract with a contractor who is on any federal or state debarred contractor list;
  • The recipient will prohibit employees, contractors, and subcontractors from using their positions for a purpose that constitutes or presents an appearance of personal or organizational conflict of interests or personal gain;
  • The recipient has no lawsuits, claims, suits, proceedings or investigations pending, to the knowledge of the subrecipient and its authorized representative, threatened against or affecting the recipient (or its officers and directors) in respect of the assets or the subrecipient nor, to the knowledge of the recipient and its authorized representative, is there any basis for any of the same, and there is no lawsuit, suit or proceeding pending in which the recipient is the plaintiff or claimant which relates to the recipient or its assets;
  • The recipient has no action, suit or proceeding pending or, to the knowledge of the recipient or its authorized representative, threatened which questions the legality or propriety of the grant moneys to be received;
  • The recipient has not received any notice of any investigation conducted or charges, complaints or actions brought by the State of Illinois or any governmental body within the State of Illinois regarding the business or its officers and directors; and
  • Neither the recipient nor its officers and directors have received any notice that it is the subject of any criminal investigations or charges.

The above is just a sampling of some of the certifications that Illinois required in order for businesses to receive the BIG funds. We would expect the B2B grant program (and other programs providing grants or forgivable loans to businesses) to have similar certifications and requirements by businesses receiving grants or loans from the state.

Another certification that has popped up – specifically in the CARES Act loan program for medium sized businesses – is that of labor neutrality. One of the certifications there requires businesses to “remain neutral in any union organizing effort for the term of the loan.”  While the legality of this has yet to be challenged, and to date it is found only in the CARES Act, businesses should be on alert for similar terms in other assistance programs offered by the government.

Of course, all this is not meant to scare businesses away from the B2B grant program, or any other COVID-19 business relief program implemented by the government. Rather, businesses should be aware of the myriad requirements they are expected to adhere to in return for receiving a loan or grant, and of the “certifications” they are making as part of the agreement to accept the loan or grant.  Businesses, and their legal counsel, should always read the “fine print” before accepting any governmental assistance.

Lingering COVID-19 Symptoms May Trigger ADA and FMLA Protection

Contributed by Suzanne Newcomb, August 10, 2021

Thin line icon with flat design element of medical diagnostics.

President Biden announced recently that those suffering “Post-Acute Sequelae of Sars-Cov-2 Infection,” aka long haul COVID-19, may qualify for protection under the Americans with Disabilities Act (ADA) and the Family and Medical Leave Act (FMLA).

Our understanding of the aftereffects of COVID-19 continue to evolve. The CDC currently lists the most common post-COVID symptoms on their website. These symptoms include:

  • Dyspnea or increased respiratory effort
  • Fatigue
  • Post-exertional malaise and/or poor endurance “Brain fog,” or cognitive impairment
  • Cough
  • Chest pain
  • Headache
  • Palpitations and/or tachycardia
  • Arthralgia
  • Myalgia
  • Paresthesia
  • Abdominal pain
  • Diarrhea
  • Insomnia and other sleep difficulties
  • Fever
  • Lightheadedness
  • Impaired daily function and mobility
  • Pain
  • Rash (e.g., urticaria)
  • Mood changes
  • Anosmia or dysgeusia
  • Menstrual cycle irregularities

Employers should treat requests for leave or accommodation relating to long haul COVID-19 as they would any other non-obvious impairment.

Employees seeking FMLA leave – whether intermittent or as a block of time:

Is the employer covered by the FMLA? If so, is the employee eligible (i.e. employer has 50 employees within 75 miles of employee’s work site; employee has been employed at least 12 months and worked at least 1250 in the past 12 months)? Provide Form WH-381. Provide the form even if the employee is not eligible for FMLA leave.

If the employee is eligible for FMLA leave, require healthcare certification that the claimed incapacity qualifies the employee for FMLA protection. Provide Form WH-380-E (for employees seeking leave for their own symptoms) or WH-380-F (for employee seeking leave to care for a family member).

Use Form WH-382 to designate the leave as FMLA leave or to notify the employee that the leave is not approved or that additional information is needed.

Individuals seeking ADA Accommodation for post-COVID-19 symptoms:  

Engage in an interactive process with the individual to determine what their limitations are and what  accommodations they seek. Remember, the ADA requires employers to reasonably accommodate employees and applicants for employment who have disabilities.

Conduct an individualized assessment to determine whether the individual has a disability as defined by the ADA. A “disability” in this context is an impairment that substantially limits major life functions. To this end, ask the individual to have their healthcare provider provide written confirmation of:

  • the nature of the impairment, its severity, expected duration, and the extent to which it substantially limits the individual’s major life functions;
  • the individual’s ability to perform the essential functions of the position, with or without reasonable accommodation; and
  • what accommodations the provider believes would allow the individual to safely perform the essential functions of the position.

If it appears the individual has a disability, further engage with the individual regarding potential accommodations. While the ADA does not allow the individual to dictate the accommodation the employer provides, it is preferable for the individual and the employer to agree.

Assess undue hardship on business operations.

Regardless of the outcome, carefully document all steps in the process and clearly communicate with the individual seeking accommodation both during the interactive process and as to the final decision on the matter.

What Can Employers Do About Employees Who Refuse to Refer to Transgendered Employees By Their Preferred Names or Pronouns?

Contributed by Peter Hansen, August 6, 2021

law concept with gavel and scale in background. composition in court library

The short answer is, private sector employers can very likely terminate the employee.  If the employee is at-will, they can be fired for any non-discriminatory reason (or no reason at all); and, intentionally using the wrong name or pronoun to refer to a coworker is certainly a non-discriminatory reason.  Even if the employee has “for cause” protection through an employment contract, there’s a pretty good chance that intentionally misgendering their coworker is sufficient cause to terminate, especially if they’ve been previously warned about similar behavior.

The issue is a bit more complicated if an employee claims their religious beliefs prevent them from referring to their coworkers by their preferred names or pronouns.  Employers are generally required to accommodate employees’ sincerely held religious beliefs, but what if accommodating those beliefs – i.e., allowing them to call transgendered employees by something other than their preferred name or pronoun – requires them to discriminate against others?  The answer is pretty straightforward:  employers do not need to grant an accommodation that violates state or federal law, and as the EEOC recently noted, discrimination on the basis of gender identity violates federal law.  Put another way, where the requested “accommodation” amounts to allowing one employee to discriminate against their transgendered coworkers, the accommodation amounts to an undue hardship that employers need not (and should not) provide. Public sector employers, particularly universities, should also speak with their counsel about employees’ potential First Amendment and Free Exercise Clause protections.

The Southern District of Indiana recently reached the same conclusion as the EEOC in Kluge v. Brownsburg Community School Corporation, regarding a teacher who alleged his employer failed to accommodate his religious beliefs and retaliated against him because he refused to refer to his students by their preferred pronouns on the basis of his religious beliefs.  The court dismissed the lawsuit, noting in part that the employee’s requested accommodation would result in an “’increased risk of liability’ which in turn constituted an undue hardship” that employers need not bear.

So, employers should engage in the interactive process and at least attempt to come up with a reasonable accommodation to offer the employee.  One possible accommodation employers could consider is a “last names” accommodation whereby the employee refers to all coworkers by their last names only … though the Kluge employer offered the same accommodation and had to withdraw it after receiving complaints.  If you can think of another accommodation, I’m all ears.  Seriously, email me.  But I digress.  The takeaway is this:  regardless of an employee’s religious beliefs, employers absolutely should not allow any employee to refer to others by anything other than their preferred name and pronoun.

Managers: Your Company’s Employee Handbook Has This, Right?

Contributed by Steven Jados, August 4, 2021

employee handbook words on a book cover to illustrate policies

“This” is a no-call/no-show policy, the terms of which are generally something like:  “An employee who is absent from work for three consecutive days without giving proper notice to the Company will be considered to have voluntarily abandoned their position and resigned from employment with the Company.”  

A recent Michigan state appellate court decision illustrates one reason why employers should have a no-call/no-show policy disseminated to all employees. In that case, an employee who was terminated after being absent for three consecutive days without calling-in to report his absences was also denied unemployment benefits because he was considered to have voluntarily left his employment as a matter of law. 

Michigan law essentially has a no-call/no-show policy written into the state’s unemployment statute—but decisions from around the country make clear that terminations under a no-call/no-show policy are likely to disqualify employees from unemployment benefits in many states other than Michigan. (To be clear, unemployment statutes and case law differ from state to state, so terminations under a no-call/no-show policy will not always be a basis to deny unemployment benefits in every state.)      

With that said, we encourage employers who have not recently updated their employee handbooks to make sure the handbook has a no-call/no-show policy—and to reach out to experienced counsel to ensure that all other policies and provisions in the handbook are up-to-date and in proper order.

Reminder: Time Spent Waiting in Line to Enter or Exit Work May Be Compensable

Contributed by Peter Hansen, August 2, 2021

Many 3d people in a row but one stands out

Employers who require employees to undergo mandatory security checks, health screenings, or similar pre- or post-shift activities take note:  a growing number of courts have determined time spent waiting to undergo and actually undergoing the check or screening may be compensable under state law. 

The most recent example is the Supreme Court of Pennsylvania, which concluded that the time Amazon employees spent on their employer’s premises “waiting to undergo, and undergoing, mandatory security screening” was compensable time under state law.  That “state law” part is significant – as we noted last year, courts have routinely determined that similar time spent waiting is not necessarily compensable under the federal FLSA, but the FLSA often differs from state law in terms of activities performed before and after a shift.

Pennsylvania is the latest court to reach this conclusion – California, New Jersey, and New Mexico courts recently held that time spent waiting for and undergoing mandatory searches of employees’ bags, packages, purses, backpacks, briefcases, and so on is compensable.  We can expect more states to weigh in on this issue soon – the Eastern District of Wisconsin is currently addressing a class action lawsuit alleging that employees should be compensated for time spent undergoing COVID-19 screening.

This trend should be particularly concerning to Illinois and Wisconsin employers, given that neither state relies on federal law for guidance on compensability of pre- or post-shift activities.  However, all employers who require employees to undergo security checks or COVID-19 screening either before or after their shifts, regardless of location, should consult with trusted counsel to discuss compensation obligations.