As the United States gradually emerges from the pandemic, employers (and especially those in the tech sector whose workforces can easily work remotely) are looking for ways to help frazzled and burned-out employees. In addition, many employees are seeking opportunities to preserve the flexibility they gained during pandemic remote-work arrangements. Time off, company holidays, and workday flexibility are among the top remedies for these concerns. But outmoded state and federal labor laws may impede a new era of worker freedom.
Company Holidays or Shutdowns
Many companies offer some form of vacation or paid time-off (PTO) benefits. Over the past year, taking a vacation has been challenging. During the pandemic lockdown, many employees did not take paid time off (PTO) due to travel restrictions. Moreover, some employees working remotely during the pandemic found that they had less free time because they have increased work responsibilities. Now, with employers having a shortage of workers and a rapid increase in business, white-collar workers in particular may find that taking a few days off just means a bigger backlog of work to be done upon return—or worse, that emails, text messages, and virtual meetings have become vacation interruptions.
Media reports state that some companies, particularly in tech industries, have responded by scheduling weeklong shutdowns to give employees time to rest and recuperate. Other companies have instituted periodic reduced workweeks—for example, by giving employees Fridays off during summer months. Most companies participating in such plans offer the benefits as paid time off akin to paid holidays.
While this trend is laudable, employers may want to exercise care when implementing paid temporary shutdowns or holiday schedules. Publishing a written policy relating to company closures is often helpful. Common considerations for such a policy include the following:
- Specifying which employees are eligible and under what conditions they may take the time off. Perhaps not every department, division, or job classification will be eligible. Certain groups of essential employees may need to remain at work.
- Considering the rate of paid time off; in most cases, the company will pay an employee’s base pay rate, but not other forms of wages.
- Considering whether employees who are on leaves of absence at the time of the company holiday will receive the benefit. While leave-of-absence laws vary, under most laws, employees are not entitled to paid holidays while on leave, as long as the policy is administered in a nondiscriminatory way.
- Determining whether employees may use other forms of PTO, such as vacation or sick days, in or around the same period as the company holiday. For the most part, with reasonable advance notice, employers can control if, and when, employees use accrued vacation. On the other hand, in some jurisdictions where sick pay is mandatory under state or local law, employers may have limited control over when employees use accrued sick pay.
- Weighing any other eligibility issues, including issues related to recently hired employees, employees who have recently given notice of resignation, or employees who are currently facing performance feedback or discipline.
- Evaluating the impact on overtime obligations to nonexempt employees who work compressed workweeks with longer workdays. California, for example, has daily overtime rules. As a limited exception to daily overtime rules, California allows employers to implement alternative workweek schedules, provided that employers comply with specific implementation processes and labor agency registrations.
Some employers have revisited “floating” holidays, which grant a certain amount of time off to employees, but allow employees to designate when they use the offered time.
Floating holidays may raise state wage and hour law considerations. For example, in California, the state labor agency views a floating holiday benefit as akin to an accrued vacation benefit. A “use-it-or-lose-it” forfeiture of the benefit could violate California law, according to the agency. Employers that grant floating holiday benefits may be required to cash out employees’ unused balances at the time of their separation from employment. In other states where such restrictions do not apply, employers may want to consider specifying the time periods during which floating holidays must be used, and what will happen to unused benefits.
In addition to traditional vacation and sick pay benefits, employers are also offering additional paid relief days for unexpected events, such as childcare issues, school-related events, elder care, pet care, and many other personal matters.
In most jurisdictions, extra time off that employees must use for specifically defined purposes is not treated like vacation benefits and therefore a “use-it-or-lose-it” feature may be an option for this type of benefit. A benefit that is usable for specific family obligations and personal matters may also send the message that the company culture is one that supports workers both in and outside the workplace.
Before the pandemic, many companies, particularly in the tech sectors, had moved to “unlimited PTO” or “flexible work schedules” for certain portions of the workforce. More employers may join this trend as the nation moves out of the pandemic.
While unlimited PTO is in concept a coveted employee benefit, there are cautions for both employers and employees with regard to such policies. Commentators have observed that these policies might result in employees taking less time away from the workplace, particularly where companies do not actively monitor and encourage time off. Employees may become resentful if offered “unlimited” time off when the reality of work obligations limits the flexibility and availability of such time off.
In addition, companies that do decide to proceed with unlimited PTO policies may want to be aware of evolving case law. For example, one court in California recently found that a flawed unwritten unlimited PTO policy actually resulted in an accrual of time that had to be paid at the time of separation from employment because, in practice, employees were granted a couple of weeks off a year, and the policy was not consistently applied. The court awarded more than $88,000 to three plaintiffs and awarded nearly $400,000 in attorneys’ fees.
In light of such case law, an employer that decides to utilize an unlimited or flexible time-off policy may want to craft an explicitly written policy stating that an employee’s ability to take time off is part of a flexible work schedule that gives the employee the ability to decide when and how much time to take off. Employers may also want to consider describing what objective factors to consider when approving the time off and how much time an employee can typically take at one time. Additional matters to keep in mind include delineating whether PTO may be used during an extended medical or family leave (and if so, for what period of time) and determining the manner in which such policies will be administered. Employers may wish to administer flexible time-off plans fairly and consistently, in a manner that encourages and allows employees to take time off, or work fewer hours in lieu of taking time off.
In sum, if this type of policy is to assist with employee burnout and be seen by employees as an additional benefit, employers may need to shift how time off is perceived, encourage employees to use the benefit, and be careful not to engage in retaliation (e.g., by rewarding those employees who do not use the benefit).
Other Types of Employer Flexibility
Not all employers can provide more paid time off, but that does not mean that employers cannot help employees with burnout or address the work-life balance for which employees yearn. For example, employers can institute policies or practices that give employees more input into their work schedules, permitting them to start work later or end earlier one or more days per week. This type of flexibility can be particularly important for working parents or caregivers, as well as for individuals who would deal with burnout by exercising, coaching teams, or spending time outdoors during the week if they had schedules that allowed them to access these activities. Staggering start times may also help employees avoid busy travel and traffic times so that they can work just as many hours but spend less time on the road getting to or from work.
Employers may also consider implementing fully remote work plans or hybrid work schedules where individuals work some of the time remotely, coming to the workplace fewer days per week or only for group gatherings or when needed. The reclaimed hours of commute time may actually benefit employers as well as employees. A hybrid work schedule can make each day feel a bit different and provide employees with a sense of control over the time and place of work that results in more satisfaction with the time they spend working.
Successfully implementing a hybrid work schedule can become a delicate balancing act. Allowing members of the same team complete freedom to select work-at-home days may impair operational efficiency when part of the team is in the office and the other part is at home. Some businesses are requiring employees to work in the office on a specified schedule. Some are requiring employees to work in the office a specified number of days per week, but allowing the work units to which employees are assigned to collectively determine which days those will be.
For employees who must be or want to be at their workplaces, some employers have available space at worksites that can be set aside as quiet space, allowing people to take quick, quiet breaks when needed during the day. Some employers are encouraging employees to join group activities such as exercise or yoga classes during lunch breaks, or create groups that take 15–30-minute walks together during set times during the week. While there may be legal implications for extended breaks, particularly for nonexempt workers, such concerns can be handled with relatively little employer intervention as long as the parameters of the break times are made clear.
Small concessions may do a lot to bolster a sense of belonging, leading to less stress and burnout when employees feel that their work is acknowledged and their stress levels are recognized. Even just a few employer-supported activities may encourage greater loyalty and even lead to collaboration between departments and employees in novel ways that inure to the benefit of everyone. Burnout is real, balance is important, and employers and employees can work towards helpful and lawful ways to reduce burnout if they look for solutions collaboratively.
In sum, employers are exploring a number of different ways to counteract burnout and sustain flexibility gained during the pandemic. As employers and employees explore creative ideas, they are finding that in some ways, decades-old state and federal laws built around the traditional 9-to-5 work schedule stand as an impediment to change. In any event, with appropriate care and guidance, many employers have made much appreciated adjustments as employees return to work.
Ogletree Deakins will continue to monitor and report on developments with respect to the COVID-19 pandemic and will post updates in the firm’s Coronavirus (COVID-19) Resource Center as additional information becomes available. Important information for employers is also available via the firm’s webinar and podcast programs.