High-Demand Workers See Benefits Boost Amid Pandemic

By Danielle Nichole Smith
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Law360 (March 27, 2020, 8:48 PM EDT) -- President Donald Trump signed a $2 trillion coronavirus relief bill Friday, but some employers stepped up and started enacting or strengthening policies meant to help protect and provide for their workers before the federal government got in gear.

Temporary pay increases and expanded paid leave policies are among some of the benefits employers started offering as the nation grapples with the spread of COVID-19, the disease caused by the novel coronavirus that emerged at the end of 2019.

The pandemic has affected different companies in different ways, Andrew R. Livingston, a partner at Orrick Herrington & Sutcliffe LLP, noted. While some employers have had "their operations grind to a halt," others are finding themselves in high demand, particularly in the food and delivery industries, he said. 

As such workforces find themselves under greater pressure, their employers are looking for ways to reward staff members for their work, incentivize them to stay at their companies and recognize the risks they are facing, according to Livingston. 

Eric D. Penkert, a shareholder at Ogletree Deakins Nash Smoak & Stewart PC, said he has seen employers working hard to support the people that help provide "the services that keep this world moving."

"For all companies that provide essential services, the employers recognize that their individual employees are the ones that get the job done," Penkert said. "So employers are trying to make sure their employees are supported both with pay and benefits, but also with policies that protect them from COVID-19."

Here is a look at some of the voluntary upgrades companies have made to employee benefits in response to the pandemic.

Increased Pay for Frontline Workers

Target Corp., BJ's Wholesale Club Inc., Inc. and subsidiary Whole Foods all rolled out temporary $2 per hour wage increases for their hourly workers in March, with the projected end dates ranging from mid-April to early May.

Starbucks announced that employees who work shifts as scheduled between March 21 and April 19 are eligible for an additional $3 per hour.

Brian Cornell, Target's CEO, said in a statement that the company's pay raise was "simply the right thing to do" and that it had become clearer with each passing day "how indispensable our team is to communities across the country."

Stop & Shop supermarkets also upped wages in March, giving store workers represented by the United Food and Commercial Workers a 10% pay increase during the outbreak, according to the union. The grocery chain is just one of a number of companies that the union has negotiated with for higher pay and other benefits during the outbreak, UFCW said.

Some companies are also giving bonuses to their workers. At BJ's, managers and key personnel in the clubs and distribution centers will receive one-time bonuses at the end of March ranging from $500 to $1,000. And at Target, 20,000 hourly "store team leads" will receive bonuses for the first time.

More Leave to Thwart COVID-19

Quite a few companies have also expanded their leave policies, providing more time off or additional sick days for their workers.

XPO Logistics Inc., which provides transportation and logistics services, updated its benefits program for U.S. workers to include "pandemic paid sick leave" of up to 80 hours of fully paid time off in addition to the workers' existing sick leave.

Employees can use the leave if they are waiting for COVID-19 test results, living with someone waiting for test results or under mandatory quarantine, among other reasons. The company is also offering three days of paid time off for employees impacted by workplace closures for sanitation purposes.

United Parcel Service is implementing a 10-day paid-leave policy for union workers directly impacted by COVID-19 in an agreement with the International Brotherhood of Teamsters. The policy will cover about 300,000 full- and part-time hourly employees, UPS said.

Fast food chains are also among the companies providing more benefits, with The Wendy's Co. offering 14 days of emergency paid leave to company employees for COVID-19 related challenges, including employees who work in restaurants. Additionally, McDonald's Corp. announced two weeks of paid leave for workers in corporate restaurants affected by the coronavirus.

Starbucks said that it would continue to pay workers even if they decided to stay home between March 21 and April 19 in addition to their existing sick days and paid time off. And Target introduced up to 30 days of paid leave for workers who are over the age of 65, pregnant or have underlying medical conditions if they prefer not to work.

Relief Funds

Some companies have also set up or donated to relief funds for their workers. Target said it is making a $10 million contribution to help its team and communities — its largest relief effort to date. Of that, $1 million will go to the Target Team Member Giving Fund to help the most affected workers.

Amazon set up a relief fund with a $25 million initial contribution. According to the company, the fund will focus on helping its independent delivery service partners and their drivers, among others. The fund will provide personal grants ranging from $400 to $5,000 per applicant, the company said.

According to Penkert, companies have also been considering how to continue to provide benefits to workers impacted by furloughs or COVID-19 related health issues, such as through paid-time off sharing policies and qualified disaster relief payments, which are available under the U.S. tax code and related IRS guidance.

W. Michael Gradisek, who chairs the employee benefits and executive compensation practice at Duane Morris LLP, said that he has been fielding a lot of questions about continuing benefits to furloughed employees.

Companies are trying to do the right thing for their workers, Gradisek said, but while that might seem simple, it can actually be quite complicated.

Some employers have been trying to convey that while they can't pay employee salaries while shut down, they still value the workers and want them to return when things are up and running again, he said.  

"There's a lot of uncertainty, but I don't think people are totally throwing in the towel yet," Gradisek said.

--Editing by Jill Coffey and Kelly Duncan.

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