Volume 40,   Issue 10                          October  2005


Business as Usual?
Top 10 Labor Issues in Aftermath of Katrina
by David L. Barron

As the devastating impact of Hurricanes Katrina and Rita becomes visible in the Gulf Coast, employers with operations in the affected areas will face challenges with no precedent in the modern workplace. No doubt, government agencies and philanthropic resources will be at the forefront assisting those most affected by the storm. Employers, however, will also have a significant role to play as entire workplaces are lost, and companies, both large and small, grapple with accommodating the myriad of issues that will arise over the coming months.

The following is a list of the top ten issues that are likely to present themselves in the near future, as employers adapt their policies and operations to current circumstances. 

1. Establishing Communication with Displaced Workers: Many displaced workers have found themselves in unfamiliar locations, without much more than the clothes on their back. It might take some time before displaced employees can “check in,” or otherwise establish communication with their employer. Many companies have created space on their website for employee communications, or otherwise established an avenue for employees to make contact from any location (such as 1-800 numbers).

Some employers with operations in cities where evacuees have relocated might also consider establishing a communication center where employees can check in with local company officials.

2. Payment of Wages: Government aid may not be available immediately, or in large amounts. Some employers have voluntarily chosen to continue paying their employees, while others have made available fixed one-time payments to affected employees.

Employers should clearly communicate the terms of such payments to avoid any confusion after the fact. For example, a charitable gift is different from an advance on future wages, and should be clearly communicated as such. Moreover, employers in affected areas who have been unable to make payroll should be cognizant of state laws governing deadlines for the payment of wages (as well as taxes). 

3. Other Wage/Hour Concerns: Some employees in affected areas will no doubt be working long hours, under situations where working time and off-duty time will blur together. Employers should be cognizant of the need to accurately record work time, and keep in mind that any work done for the benefit of the employer might be considered work time.

4. Transfer of Workers to Other Operations: It is rapidly becoming evident that thousands of people will either never return to the hardest hit areas, or will return only after an extensive rebuilding effort is completed. Employers should consider whether affected employees could be transferred to other operations in surrounding areas, so that valuable skills and experience are not lost. Once the rebuilding is complete, these employees will be an integral part of returning to the area and re-establishing operations. Employers with collective bargaining agreements governing transfers between operations should be cognizant of any restrictions contained therein, and should also consider negotiating with the representative union for a one-time exception to these limitations.

5. Flexible Leave Policies: Most company handbooks make no allowance for the type of disaster that has befallen the Gulf Coast. For the most part, human resources personnel will be left with no choice but to improvise answers to critical questions such as how long to wait for employees to make contact before initiating termination.

Obviously, flexibility and compassion should be the order of the day in this area.

Moreover, it is important to note that many employees affected by the storm will qualify for family and medical leave (FMLA), bereavement leave or other types of leave provided under either company policy or federal and state laws. Employers should be aware that posttraumatic stress, or depression resulting from the aftermath of the storm, might qualify employees for medical leave under the FMLA, or similar company policies. 

6. Medical Insurance Coverage: Many affected employees will be using medical insurance to assist with recovery after the disaster. Consider providing important benefit information on company websites, or through communication centers in cities providing shelter, so that employees are best able to address issues that might arise.

7. Employee Assistance Programs (EAP): Most employers have EAPS either separately or as a part of their health insurance benefits. Employers should communicate the availability of such programs to affected employees, and contact benefit providers to explore ways to facilitate the use of such programs, including making qualified counselors available onsite or in areas where a large number of employees have evacuated. 

8. Unemployment Benefits: For those employees whose jobs are permanently gone, or who choose not to return to employment in affected areas, unemployment benefits will likely be available. Unemployment benefits normally run for 26 weeks, however, the government has the power to expand the time limits, and is expected to do so in this case. 

9. Donating Co-Worker Leave: Across the country, citizens and co-workers have searched for ways to help their neighbors deal with the recent tragedy. Several large companies have made opportunities for employees available to donate accrued vacation leave or paid time off to other employees within the company who may be in greater need of these benefits. Before implementing such programs, it is important for companies to establish procedures and guidelines for the implementation, and take into account any potential legal and tax implications of the program. 

10. Layoffs/Business Closures: Unfortunately, Hurricane Katrina will likely force many business owners to make the difficult decision to layoff employees, relocate or cease operations in affected areas. These actions will have both legal and community ramifications, which employers should carefully consider. Most notably, certain employers may have notice obligations under the Federal Worker Adjustment and Retraining Notification Act (WARN Act), if employees are laid off, or suffer a significant reduction in work hours for more than six months. 

the author:
David L. Barron is an attorney at Epstein Becker Green Wickliff & Hall P.C. based in Houston.

© Copyright 2005 Key Communications Inc. All rights reserved. No reproduction of any type without expressed written permission.