Current and Anticipated Requirements
The stark reality of government quarantines, mass-gathering bans, school closures, public health emergencies, and travel restrictions is impacting the American workplace and workforce in truly unprecedented ways. Every day, US employers institute facility closures, remote-working, furloughs and, in some cases, layoffs in response to the economic and health impacts of the COVID-19 pandemic. Employers are no longer asking whether they can check the temperatures of their employees, but instead are hyper-focused on continuing critical business operations while helping employees mitigate the financial burdens of the current crisis.
Our latest FAQ addresses these challenging employment and humanitarian concerns.
Q: What alternatives are available for employees whose work hours are reduced or eliminated as a result of leaves of absence, workplace closures, furloughs, or layoffs?
A: The good news (if there is any) is that employees who are impacted by COVID-19 may be eligible for paid sick leave, state or private disability insurance, paid family leave, unemployment insurance, state work sharing, or, in limited circumstances, workers' compensation benefits. Employees who are still employed but off work also may be eligible to use paid PTO, vacation, personal, or family leave. And more significant help from the federal government -- emergency paid sick and FMLA leave -- is on the way (see next Q&A below).
Until these emergency legislative efforts kick in, here are potential sources of wage replacement for employees impacted by COVID-19.
|Employer-provided Paid Sick Leave||Employees covered by state or local paid sick leave laws or company-offered paid sick leave benefits.||For an employee's COVID-19 illness, to care of a sick family member, or for "preventative care" when civil authorities recommend quarantine of the employee or a family member.||Paid time off while using accrued but unused paid sick leave.|
|Employer-provided Paid Vacation / PTO Leave||Employees eligible for company-offered paid vacation, personal, family, or undifferentiated leave.||Any reason chosen by employee and approved by employer.||Paid time off while using accrued but unused vacation, personal, family, or PTO leave.|
|State-provided Disability Insurance Benefits||Employees in California, Hawaii, New Jersey, New York, Rhode Island, or Puerto Rico.||Employees who are unable to work due to medical quarantine or illness related to COVID-19 (certified by a medical professional).||Short-term benefit payments to eligible workers who have full or partial loss of wages due to non-work-related illness or injury. Benefits are typically a percentage of lost income, up to maximum weekly amount set by law. Note that some states have waived existing waiting periods for benefits.|
|Private or Employer-provided Disability Insurance||Employees covered by private or employer-sponsored disability insurance programs.||Employees who are unable to work due to medical quarantine or illness related to COVID-19 (certified by a medical professional).||Reimbursement for covered wage losses, medical care, and other expenses incurred while quarantined or diagnosed with COVID-19 and unable to work. Note that some carriers have quarantine-specific coverages, including coverage for employees who are quarantined but not ill. Benefits may include short-term disability (STD), long-term disability (LTD), hospital or medical care indemnity, critical illness, or similar coverage. Many disability policies follow FMLA criteria for coverage (see FMLA discussed below).|
|State-provided Paid Family Leave||
Employees in California, Connecticut (after January 1, 2022),
|Employees who have a full or partial loss of wages because they need time off to care for a quarantined or seriously ill family member with COVID-19 (certified by a medical professional).||Benefits are typically a percentage of lost income, up to maximum weekly amount set by law.|
|State-provided Unemployment Insurance||Employees who satisfy state eligibility requirements for unemployment insurance benefits (typically must have earned sufficient wages during a 12-month "base period" to establish eligibility).||Employees who experience an employment loss or reduction in hours, or who are unable to work as a result of COVID-19 (including quarantines, school closures, reduced hours, furloughs, or layoffs).||Partial wage replacement benefit payments to workers who lose their job or have their hours reduced, through no fault of their own. Benefits are typically a percentage of lost income, up to maximum weekly amount set by law. Note that some states have waived existing waiting periods for benefits.|
|Workers' Compensation||Employees who contract COVID-19 related illness while at work or carrying out their duties.||Employees who are unable to work their usual position because they were exposed to and contracted COVID-19 during the regular course of their work.||Benefits are typically a percentage of lost income, up to maximum weekly amount set by law. Eligible employees may also receive medical treatment and additional payments for permanent disability related to the illness.|
In response to the COVID-19 pandemic, some states have waived existing waiting or elimination periods for unemployment and disability insurance benefits. For example, see California Governor Newson's waiver of unpaid one week waiting period.
Several agencies have indicated that paid sick leave benefits may be used for "preventative care" for employees or their family members if self-quarantine is recommended by civil authorities as a result of potential exposure to COVID-19.
"Workshare" programs offered by several states are another potential income source for impacted employees. Designed to reduce layoffs, these programs allow employers to retain workers during times of slowdown by simply reducing the work hours of a larger group of employees, while allowing the impacted employees to apply for and receive unemployment insurance benefits to compensate for the lost wages. An example is the Rhode Island WorkShare program.
Q: What is the federal government doing to help employees and companies impacted by COVID-19?
A: Unprecedented legislative efforts to address the crisis's impact are underway. Most prominently, the US House of Representatives' Families First Coronavirus Response Act ("FFCRA") bill, approved by the White House but, as of March 15, 2020, not yet voted upon by the Senate, will require many employers to provide paid Family and Medical Leave and paid sick leave to employees impacted by the COVID-19 crisis. If enacted, this law will be the first federal paid leave law applicable to private employers in US history.
Among other things, the FFCRA will expand the Family and Medical Leave Act ("FMLA") through the end of 2020 by authorizing eligible employees to take up to 12 weeks of job-protected leave for each of the following three reasons:
- To comply with a recommendation or order of a public health official or health care provider that the physical presence of the employee on the job would jeopardize the health of others because of the exposure of the employee to COVID-19 or the employee's exhibition of COVID-19 symptoms, and the employee is unable to both perform his or her job duties and comply with the order or recommendation of the public health official or health care provider.
- To care for a family member if a public health official or a health care provider determines that the family member's presence in the community would jeopardize the health of others because of COVID-19 exposure or symptoms; or
- To care for a son or daughter under the age of 18 if the child's elementary or secondary school is closed or a childcare provider is unavailable because of COVID-19.
The FFCRA will substantially increase the number of employees eligible for COVID-19 leave by defining "employee" to mean any person who has been employed by a covered employer for 30 calendar days. The prior, more restrictive definition of employee – an employee employed (i) for at least 12 months by the employer with respect to whom leave is requested; and (ii) for at least 1,250 hours of service with such employer during the previous 12-month period – remains in place for other types of FMLA leave. Under the new "employee" definition, newly hired, temporary, part time, and seasonal employees may be eligible for COVID-19 FMLA leave. The statute will also expand the definition of "family member" well beyond the current FMLA definition.
And the FFCRA will both expand and limit the number of companies subject to the COVID-19 leave provisions by changing the definition of "employer." The current FMLA definition of an “employer” is "any person engaged in commerce or in any industry or activity affecting commerce who employs 50 or more employees for each working day during each of 20 or more calendar workweeks in the current or preceding calendar year." Under the FFCRA, an “employer” is defined as "any person engaged in commerce or in any industry or activity affecting commerce who employs fewer than 500 employees." Large employers (500 or more employees) are excluded from both the FMLA COVID-19 provisions and the Act's mandatory paid sick leave provisions discussed below.
The new legislation also will require covered employers to provide paid federal leave for the first time in US history. The first 14 days of a COVID-19 FMLA leave may be unpaid, but employees may elect to use any paid leave entitlements during that period (vacation, personal, or sick leave - see discussion of mandatory and overlapping paid sick leave below). Employers, on the other hand, may not require the use of any paid leave during COVID-19 FMLA leaves, a change from the general rule allowing employers to require the use of paid vacation, PTO, personal or family leave during FMLA leaves of all types, and the use of paid sick leave during a leave for the employee's own serious health condition.
After the first 14 days, employers must pay employees during the remainder of the COVID-19 FMLA-eligible leave (presumably for up to another 10 weeks of paid leave). The amount paid must be not less than two thirds of the employee's "regular rate" (as defined under the Fair Labor Standards Act), multiplied by the normal scheduled hours for the employee. If the employee works a varied schedule, the employer may pay using the employee's average scheduled hours over the prior six months (including any leave hours) or the employee's reasonable expectation for scheduled hours at the time of hire.
The proposed law contains important exceptions for small businesses and healthcare workers. First, employers with less than 25 employees do not have to guarantee job reinstatement at the end of a COVID-19 FMLA leave if the employee's position is eliminated as a result of economic conditions caused by a public health emergency, but employers must make a reasonable effort to restore the employee to an "equivalent" position upon leave expiration, and if no equivalent position is available, make reasonable efforts to contact the former employee if an equivalent position becomes available in the 12 months following the leave's expiration. Job reinstatement guarantees remain for larger employers (25 or more employees) and existing FMLA leaves.
Second, the proposed legislation grants the US Secretary of Labor authority to issue regulations to exclude certain health care providers and emergency responders from the definition of employees eligible to take COVID-19 leave and exempt small businesses with fewer than 50 employees from the requirement to offer COVID-19 FMLA leave if offering such leave would jeopardize the viability of the business as a going concern.
Certain multi-employer paid leave benefit plans will be obligated to allow employees to take paid leave for the three reasons specified in the FFCRA. Employers who contribute to multi-employer benefit plans which provide employees paid leave based on the employees' hours worked will meet their obligation to provide paid COVID-19 FMLA leave by making the contractually described contributions to that plan.
Finally, the legislation will eliminate the private right of action for certain employees to sue for FMLA violations; essentially, employees who have not been employed for the traditional 12 months prior to the leave request and for 1,250 hours of service during the prior twelve month period cannot sue.
Q: Is federal paid sick leave in the works?
A: Yes. The FFCRA, if enacted, will require employers with fewer than 500 employees and government employers to provide employees with "emergency paid sick leave" for COVID-19 related purposes. The FFCRA's paid sick leave requirements will expire on December 31, 2020.
Sick leave will be available under the FFCRA for the following five purposes:
(1) To self-isolate because the employee is diagnosed with COVID-19.
(2) To obtain a medical diagnosis or care if an employee is experiencing the symptoms of COVID-19.
(3) To comply with a recommendation or order by a public official with jurisdiction or a health care provider on the basis that the employee's physical presence on the job would jeopardize the health of others because of: (A) the employee's exposure to COVID-19; or (B) the employee's exhibition of COVID-19 symptoms.
(4) To care for or assist a family member of the employee: (A) who (i) is self-isolating because such family member has been diagnosed with COVID-19; or (ii) is experiencing symptoms of COVID-19 and needs to obtain medical diagnosis or care; (B) with respect to whom a public official with jurisdiction or a health care provider makes a determination that the presence of the family member in the community would jeopardize the health of others because of: (i) the family member's exposure to COVID-19; or (ii) the family member's exhibition of COVID-19 symptoms.
(5) To care for the child of the employee if the child's school or place of care has been closed, or a child care provider is unavailable, due to COVID-19.
FFCRA sick leave will be paid at the employee's "regular rate" of pay, as defined under the Fair Labor Standards Act, if the sick leave is used by the employee to quarantine while seeking a COVID-19 diagnosis or for preventive care. Sick leave used for family care (including child care in the event of a school closure or lack of childcare) will be paid at two-thirds the employee's regular rate. Full-time employees will be entitled to two weeks (80 hours) of paid sick leave and part-time employees will be entitled to the average number of hours worked over a two-week period.
FFCRA emergency paid sick leave will have to be made available to employees above and beyond any existing sick leave entitlements, and employers will not be able to amend existing sick leave policies to account for the new emergency sick leave requirements. Employers also cannot require the use of other paid leave before the employee utilizes FFCRA paid sick leave. Employees will not need to find replacement workers to cover shifts for which the employees are using FFCRA sick leave.
A violation of the FFCRA emergency sick leave provisions will be deemed to be a violation of the minimum wage provisions of the Fair Labor Standards Act. The Act also will prohibit discrimination, discipline, or discharge of employees who uses sick leave or file a complaint under the FFCRA.
The FFCRA will extend paid sick leave benefits to employees who work under a multiemployer collective agreement and whose employers pay into a multiemployer plan.
Finally, the FFCRA will authorize employer tax credits for qualified sick leave wages paid by an employer. The credits will be allowed against the employer's portion of Social Security taxes and are subject to caps on daily dollar amounts and aggregate days.
Q: Do I have to pay non-exempt (hourly) employees if we temporarily cease operations?
A: Not yet, but monitor the FFCRA and similar legislation that may require pay during COVID-19 closures or leave. Non-exempt employees typically must be paid for all time worked, whether at home or the workplace. Non-exempt employees generally do not have to be paid for non-work hours, and non-exempt employees who are furloughed or removed from the schedule typically will not be owed wages.
Be cautious about requiring employees to self-quarantine. Some states, such as California, define compensable time to include hours during which the employee is "subject to the control of" the employer. Ordering an employee to self-quarantine at home might exert sufficient control to require compensation for the time spent in quarantine. Similarly, ordering an employee to remain on call, with distance, time, or other restrictions imposed that limit the employee's ability to use the on-call time for his or her own purposes, may also require compensation. Telling an employee to not report for work during a closure, however, should not trigger compensation requirements. Consider whether any collective bargaining agreements or other contracts may require pay under such circumstances.
Q: Do I have to pay exempt (salaried) employees if we temporarily cease operations?
A: Federal regulations require employers to pay an exempt employee's full weekly salary for any week in which the employee performs any work, if the employee does not work the full week because the employer failed to make work available. On the other hand, an exempt employee who performs no work at all during a week may have his or her monthly salary reduced by the weekly amount.
Deductions from the salary of an exempt employee for absences of less than a full day for personal reasons or for sickness are not permitted. If an exempt employee works any portion of a day, no deduction from salary may be made for a partial day absence. Federal regulations do allow partial day deductions from an employee's sick leave or vacation / PTO bank, so long as the employee is paid the full day's salary through a combination of regular pay and accrued leave. If an exempt employee has not yet accrued leave or has exhausted all available leave, no salary deduction may be made for a partial day absence.
Deductions from salary in full day increments also may be made if an exempt employee is absent from work for one or more full days for personal reasons other than sickness and accident, so long as work was available for the employee, had he or she chosen to work.
Q: Do I have to provide employees time off from work if they need to stay home to care for a child because of a school closure? Do I have to pay them during the leave?
A: Certain states and cities, such as California, Chicago, Michigan, New Jersey, New York, and San Diego, require employers to provide paid or unpaid leave in the event of emergency school closures. For example, California Labor Code section 230.8 requires employers with 25 or more employees working at the same location to provide up to 40 hours each year to address child care provider or school emergency closures. Paid sick leave and "kin care" laws also may require employers to provide time off for parents dealing with school closures.
And if the FFCRA is enacted (see above discussion), it will authorize FMLA leave and paid sick leave when needed because of school closures or loss of childcare.
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