Today's post comes to us from Workforce Institute board member Mark Wales.
As we predicted earlier this year, we are starting to see the first significant increases in labor-related legal actions related to the Covid-19 pandemic.
The National Law Review in May 2021 cites pandemic-related class actions as the number 1 trend for 2021. This is based on what is being tracked and seen so far by a variety of legal analysts.
JDSPURA has published the below map of labor-related pandemic legal cases for the U.S. and listed the top 5 key drivers as being:
Alleged failure to provide a safe working environment
Discrimination (especially disability and age)
Leave claims (including both FMLA and the varying state laws)
Retaliation or whistleblower claims (as related to workplace safety or leave)
Wage and hour (related to the pandemic)
In 2020, over 38% of the cases were classified as relating to termination, which is not unexpected, given the nature of the unprecedented need to close business operations down temporarily, and the processes companies took to decide who and what jobs they retained.
JDSUPRA concludes that thus far, few of the cases are maturing into class certification stage, but courts have reached varying conclusions, so this is an aspect to watch in 2021.
Analysis by Seyfarth suggests that this will evolve and develop, especially as more companies return to the office.
The American Bar Association (ABA) warns of cases surrounding misclassification of employees, such as the complaints against Uber and Lyft. The ABA also highlights issues arising from bringing employees back to company locations and the complexity of managing risk when it comes to who is sick and company policies around managing that risk as it relates to other employees and the public.
The National Law Review advises employers to carefully monitor and prepare for issues arising from:
Wage and hour complaints (especially off the clock working)
Expenses related to home working
Wage and hour related to nonexempt workers waiting (such as delays will be being scanned for temperatures)
Mandated vaccinations
Discrimination over who returns to work
Many organizations have yet to finalize rules or begin bringing all workers back to the office and this return to work is likely to increase the complexity and volume of cases. There will be a whole new level of complexity around accommodations and equity on an ongoing basis.
How will company policies evolve and will companies codify policies that adjust for individual state, county or municipality guidelines and laws around ”œopening up” after the pandemic?
As with so much having to do with the pandemic, there is much uncertainty as to what the new normal looks like for businesses. Company policies around labor law, health and safety, and equity will be huge minefields for quite some time.
What Can Organizations Do?
Organization leadership in Workforce Management, HR, Operations, and Legal should set up regular joint sessions to review external trends, internal developments, and develop concrete and actionable plans to prepare and deal with emerging pandemic-related labor issues. This will minimize the unexpected and ease required responses or actions.
Companies must consider the issues of health, safety and equity as seriously as other issues of labor law compliance.
In our latest survey, conducted with Future Workplace, we asked 812 HR and payroll leaders about their views regarding regulatory compliance. What we heard back is that it can cost organizations as much as $100,000 each time a federal, state, or even local labor-related regulation is created or changed.
It's not surprising that changes in labor laws, may drive up expenses related to wages. What this survey focused on, however, are the less visible administrative expenses required to evaluate and implement these changes within an organization.
Here are the key findings from this research:
Keeping up with regulatory change is a necessary, yet expensive, responsibility.
More than half of HR and payroll professionals (54 percent) surveyed say that, on average, it costs their organization $40,000 to $100,000 to prepare for each labor-related regulatory change.
This cost covers a wide range of activities that varies by organization, including, but not limited to, consulting with legal counsel to create new internal policies; training for HR and payroll employees; educating leaders and managers on the change; wide-ranging employee communications to ensure everyone understands the change, etc.
The cost of compliance keeps going up, too. More than two-thirds (68 percent) of those surveyed say compliance has become more expensive in just the last year, while three-quarters (74 percent) say it's more expensive than 2007, just a decade ago.
While larger organizations are more sophisticated at tracking expenses related to maintaining compliance, one out of every five organizations with fewer than 500 employees (20 percent) surveyed aren't sure how much the activity of remaining compliant costs annually.
Half of businesses say they aren't given enough time to get ready for new workplace rules.
Regulatory changes can become law in as little as 60 to 90 days, but half (53 percent) of survey respondents say more time is needed to create and communicate new internal policy to employees.
More than a third of HR and payroll pros (40 percent) say 120 to 150 days is the preferred amount of prep time to get ready for recently passed legislation.
Smaller organizations may need even longer. Nearly a quarter (24 percent) of businesses with fewer than 500 employees say they require a minimum of 150 days to get ready for regulatory changes to become law.
Complexity, constant change, and time-to-comply all factors that put most businesses - and their employees - at risk.
With too much work and not enough help, nearly two-thirds (58 percent) of respondents reported that they've witnessed colleagues within their organization occasionally cut compliance-related corners.
A possible reason for this trend? In addition to an unsustainable pace of change, one out of every two respondents (56 percent) said their HR/payroll systems are outdated, making compliance a challenge despite their best efforts.
There's little relief on the horizon, either. Two out of every three respondents (64 percent) say they expect compliance to become even more complex under the current presidential administration.
HR and payroll pros need more support to identify and implement critical compliance changes.
There's no one-stop resource to keep up with regulatory changes. Well over half of respondents (59 percent) say they rely on their HR/payroll software vendor/provider to learn about changes, while many also depend on updates from national industry associations (39 percent), their internal legal counsel (37 percent), regional industry associations (35 percent), and legal publications (34 percent).
Virtually everyone surveyed (85 percent) says compliance is a guiding principal in their organization's HR and payroll operations, but just a quarter (27 percent) say it is discussed daily. Just under half (46 percent) of respondents say it's a weekly conversation, while one-fifth (20 percent) say it's only addressed monthly.
Organizations do recognize the value in training employees to better handle compliance. Nearly two-thirds (61 percent) of the respondents say their boss makes it simpler to obtain training, educational opportunities, and industry certifications to simplify compliance administration.
