COVID-19 AND WHAT EMPLOYERS NEED TO KNOW

            The rampant spread of the Coronavirus Disease-2019 (COVID-19) throughout the United States has affected almost every employer and raises a host of workplace issues especially for those non-essential businesses that have been required to cease or curtail operations.  Recently, a number of actions have been taken by Congress, State and local agencies and the EEOC in response to this national crisis.  The following is intended to highlight some of these actions and address pressing employment issues.

1. The Families First Coronavirus Response Act Update

President Trump signed The Families First Coronavirus Response Act (FFCRA) into law on March 18, 2020. The FFCRA builds on an Emergency Coronavirus Spending Package enacted on March 6, 2020 and a subsequent Bill passed by the House on March 13, 2020 that will provide free coronavirus testing, paid leave, enhanced unemployment insurance benefits for people affected by COVID-19, additional funding for nutritional programs and Medicaid, and protections for health care workers and employees responsible for cleaning at-risk places.  Of particular importance to employers and employees, the FFCRA provides employees with paid sick leave through the newly enacted Emergency Sick Paid Leave Act and the expansion of the Family and Medical Leave Act.

The Emergency Sick Paid Leave Act

The Emergency Sick Paid Leave Act requires private employers with under 500 employees and all public employers to provide mandatory paid-sick-leave benefits to employees who are unable to work or telework for the following reasons:

1. The employee is subject to a Federal, State, or local quarantine or isolation order related to COVID-19;
2. The employee has been advised by a health care provider to self-quarantine due to concerns related to COVID-19;
3. The employee is experiencing symptoms of COVID-19 and seeking a medical diagnosis;
4. The employee is caring for an individual who is subject to a quarantine or isolation order or has been advised to self-quarantine or is experiencing symptoms of the COVID-19 virus and is seeking a medical diagnosis;
5. The employee is caring for a son or daughter if the school or place of care of the son or daughter has been closed, or the child care provider of such son or daughter is unavailable, due to COVID-19 precautions; or
6. Experiencing any other substantially similar condition specified by the Secretary of Health and Human Services.

Full-time employees must be provided with up to 80 hours of paid sick leave. Part-time employees must be provided with sick leave equal to the number of hours the employee normally works in a two-week period. Paid sick leave benefits must be immediately available when the law takes effect regardless of how long an employee has worked for the employer.  If the qualifying reason is for the employee’s own care (reasons 1-3 above), paid sick leave must be paid at the employee’s regular rate of pay or minimum wage, whichever is greater.  Payment for self-care is capped at $511 a day or $5,110.00 in the aggregate.  If the qualifying reason is for the care of a family member (reasons 4-6 above), the paid leave may be compensated at two-thirds their regular rate of pay, or minimum wage, whichever is greater.  Payment to care for others is capped at $200 a day or $2,000.00 in the aggregate.

Paid sick leave under the Act ends when the employee returns to work, if that occurs before the two-week period. Employers may not require that employees use other paid time off before using paid sick leave under this Act. This benefit is available fifteen days after enactment on April 2, 2020 and will expire at the end of 2020.

Under the Act, employers cannot:

1. Require an employee to use other paid leave before using the paid sick time provided under the Act.

1. Require an employee to find a replacement to cover his or her scheduled work hours.
2. Retaliate against any employee who takes leave in accordance with the act.
3. Retaliate against an employee who files a complaint or participates in a proceeding related to the act—including a proceeding that seeks to enforce the act.

The Emergency Family & Medical Leave Expansion Act

The Emergency Family & Medical Leave Expansion Act expands the Family Medical Leave Act for purposes of the COVID-19 pandemic and requires all private employers with under 500 employees and all public employers to provide a twelve (12) week job protected leave to those eligible employees who are unable to work due to a need for leave to care for their child because the school or day care has been closed or the child care provider is unavailable due to a public health emergency. A “public health emergency” under the Act is defined as an emergency with respect to COVID-19 as declared by a federal, state, or local authority.  Unlike the FMLA which requires an employee to be employed for one year, the Emergency Family & Medical Leave Expansion Act only requires that the employee be employed for thirty (30) days to be eligible.

The first ten (10) days of emergency leave may be unpaid. An employee may elect to use any accrued paid time off (vacation or sick pay) during this time, but employers may not mandate that they use accrued paid time off. After the initial ten (10) day period, employees must be paid at least two-thirds (2/3) of their regular salary, up to a cap of $200 per day and $10,000 in total per employee. An employee taking extended FMLA must be restored to his or her job except that employers of fewer than 25 employees may be excused from reinstating an extended FMLA user if the employee’s position no longer exists due to economic conditions or other changes in operations caused by the public health emergency.  This Act becomes effective fifteen (15 days) after its enactment on April 2, 2020 and will expire at the end of 2020.

Under both the Emergency Paid Sick Leave Act and the Emergency Family Medical Leave Expansion Act, small businesses with fewer than 50 employees may be eligible for an exemption if compliance with the requirements would jeopardize the viability of the business as a going concern.  It will also be permissible to exclude certain health care providers or emergency responders from the definition of eligible employees.

Notice Requirements

Covered employers are required to post in conspicuous places on the workplace premises a notice to be prepared by the Secretary of Labor advising employees of their rights under the Act.

Penalties

Employers who fail to provide the paid leave under either of these Sections will be considered to have failed to pay their employees the federally mandated “minimum wage” and will be in violation of the Fair Labor Standards Act, which provides for liquidated damages equal to the amount of unpaid wages as well as attorneys’ fees and costs.

Tax Credits

Covered employers that are required to offer Emergency Family Medical Leave or Emergency Paid Sick Leave will be eligible for tax credits.  Additionally, employees will not have payroll taxes withheld from Emergency Sick Leave

In addition to the above, many states have enacted similar laws which may provide additional protection.  For instance, New York has enacted it own emergency paid sick leave law.  While the benefits provided for quarantine leave under the New York COVID-19 Paid Sick Leave Law depend on the size of the employer, it applies to all employers even those with more than 500 employees in New York.  Employers should monitor all state and local regulations where they do business.

2. Unemployment Compensation

In response to the COVID-19 crisis which has resulted in mandatory stay at home orders and forced business closures, the Department of Labor is permitting every state the ability to relax or waive certain unemployment requirements such as waiting periods or actively seeking work.  In Pennsylvania, employees who are unemployed because their employers have shut down operations because of the COVID-19 emergency are eligible for unemployment compensation benefits, if they are not receiving paid time off for the time they miss. The PA DOL has also suspended the usual one week “waiting week” for benefits for this purpose only. They have also announced that the experience rating for any employer whose employees collect benefits for this reason will not be affected by those claims.

Other states have reacted similarly.  New York has waived its waiting period.  New Jersey is attempting to pass a temporary unemployment program to provide full pay for employees that are out of work because of COVID-19 or have to care for a child whose school is closed due to COVD-19.  Michigan has extended the time an individual can receive benefits and has not required employees to actively seek work if they are quarantined or caring for somebody that is quarantined or caring for a child whose school is closed due to the COVID-19 crisis.  Florida has also waived its requirement that employees actively seek work if out for these reasons.

3. Layoffs

Many employers are being forced to layoff their workforce due to economic hardships caused by the COVID-19 pandemic including those resulting from forced business closures and stay at home orders.  Certain layoffs implicate The Worker Adjustment and Retraining Notification Act of 1988 (the “WARN Act”) which is a federal law that requires most employers with 100 or more employees to provide sixty (60) calendar-day advance notification of plant closings and mass layoffs of employees affecting fifty (50) or more employees at a single site of employment.  In determining whether a company has 100 employees, employees that have worked less than six months in the last 12 months and those who work an average of less than 20 hours a week are generally not considered. There are certain exceptions to the requirements when layoffs occur due to unforeseeable business circumstances, faltering companies, and natural disasters.  While COVID-19 is not presently considered a natural disaster, it most likely would qualify as an unforeseeable business circumstance.  Additionally, under the Act, a temporary layoff of less than six months does not constitute an employment loss triggering notice.

Employers should be mindful that many states have enacted their own “Mini-Warn” laws which may expand or reduce the requirements under the Federal Act.  For instance, California does not permit an unforeseeable business exception nor does it provide an exception for temporary layoffs.  New Jersey has amended its Act effective July 2020 and will require mandatory severance when there are plant closings or mass layoffs as defined under the New Jersey Act.  In New York, a mass layoff is defined as the layoff of 25 or more employees if it constitutes 33% of the workforce or the layoff of 250 full time employees and a plant closing is the cessation of business at one operating site that results in the loss of employment of at least 25 employees.  States such as Pennsylvania, Florida, Colorado and Massachusetts have the same requirements as the Federal Act.  Employers are urged to consult the state laws where they operate to ensure compliance

4. Salary Reductions

Employers are permitted to reduce salaries as an alternative to layoffs or furloughs.

However, employees have to earn at least minimum wage.  Additionally, if employers are reducing the salaries of exempt employees, the employer will lose the exemption under the Fair Labor Standards Act if the reduced amount results in the employee earning below $684.00.  Employers could also lose the exemption under state wage laws if the reduction results in the employee earning less than the weekly earning amount required by state law to qualify for an exemption.

Notice should be given to employees before a salary reduction takes place.  While most states do not specify whether the notice needs to be in writing, best practices suggest that written notice is preferable to oral notice.  Additionally, certain states have implemented requirements regarding the amount of notice required.  For instance, North Carolina requires twenty-four hours notice and South Carolina requires seven days notice.  Pennsylvania, New Jersey, Illinois, Colorado, Georgia, Minnesota, Florida and Illinois have no specific requirements..

5. EEOC Issues

1. Discrimination Issues

The issues surrounding COVID increase the potential for discrimination claims based on characteristic such as national origin, age and disability.  Accordingly, employers must be mindful of the anti-discrimination laws in taking measures to respond to the COVID-19 crisis.  In implementing layoffs and salary reductions, employers should be careful that decisions are made for legitimate and non-discriminatory reasons.  For instance, while China is the origin of the virus, employers should not treat employees of Asian descent differently or assume that they have COVID-19.  Likewise, employers should not assume people over a certain age or those with known medical conditions have COVID-19.   In addition, employers should also remember that COVID-19 may or may not qualify as a disability under the ADAAA and should explore those issues when it appears an employee may need an accommodation.

2. Taking Employee Temperatures

The EEOC has relaxed the prohibition on employers taking employees’ temperatures during the COVID-19 emergency. Usually, taking an employee’s temperature is considered to be “medical testing” which is prohibited under the Americans with Disabilities Act. For the duration of the COVID-19 emergency, employers may take their employees’ temperature and may send any employee with a fever home. Employers should discontinue this practice when the COVID-19 emergency ends.

We will continue to provide updates to our clients regarding important COVID-19 legislation that affects employers and employees.  If you have any questions regarding the foregoing, please contact Jennifer Chalal at jchalal@sgrvlaw.com or Nancy Abrams at nabrams@sgrvlaw.com.