The novel coronavirus (COVID-19) has impacted almost every facet of life and business. Below is a list of the top 10 tips and questions created to assist employers navigate these uncertain times.
Historically, the Family and Medical Leave Act (FMLA) provides eligible employees of a covered employer the right to take up to 12 weeks of unpaid leave during any 12-month period for one or more of the following reasons: the birth and care of the newborn child of the employee; placement with the employee of a son or daughter for adoption or foster care; care for an immediate family member (a spouse, child, or parent) with a serious health condition; or when the employee is unable to work because of a serious health condition. FMLA also includes qualifying events and protection and rights for FMLA-eligible employees in situations where a family member is called to active duty or if it is necessary to provide care to an injured servicemember.
Prior to the FFCRA, eligible employees were required to be employed by the employer for at least 12 months and must have worked at least 1250 hours for that employer during the 12-month period preceding the start of the leave. Additionally, FMLA applied to employers whom employ 50 or more employees at all employer locations within a 75-mile radius of their worksite.
Effective April 1, 2020, and running through December 31, 2020, the FFCRA provides paid sick leave and paid FMLA leave time (referred to as ESICK and EFMLA, respectively, in this article) for COVID-19 related issues. To be eligible, employees must answer affirmatively to one or more of the following questions:
The ESICK provisions apply to all private employers with fewer than 500 employees, regardless of the employee’s date of hire. EFMLA also applies to all private employers with fewer than 500 employees; however, the employee must be employed for at least 30 calendar days. Moreover, EFMLA only applies to COVID-19 related cases and does not extend or change the overall FMLA leave time available to an employee.
It is important to understand the FFCRA is to ensure the proper application of the law. ESICK provides up to two weeks of paid sick time to an employee. In situations where the employee is subject to a federal, state or local quarantine or isolation order related to COVID-19; has been advised by a health care provider to self-quarantine related to COVID-19; or is experiencing COVID-19 symptoms and is seeking a medical diagnosis, the employee is eligible for 100% of regular pay, up to $511 daily with an aggregate total of $5,110.
Continuing, in situations where the employee is caring for an individual subject to an order of quarantine by the Federal, State or local authorities, or been so advised by a health care provider, the employee is eligible for 2/3 of regular pay, up to $200 daily with an aggregate total of $2,000.
Similarly, when an employee is caring for his or her child whose school or place of care is closed (or childcare provider is unavailable) due to COVID-19 related reasons, the employee is eligible for 2/3 of the daily wages, up to $200 daily with an aggregate total of $2,000. However, this provision should be reviewed in conjunction with the EFMLA provisions.
While EFMLA provides up to 12 weeks of leave time, the first two weeks are unpaid, while 10 weeks are paid. The employee is eligible for 2/3 of regular pay, up to $200 daily with an aggregate total of $2,000. For the first two weeks, the employee may elect to exhaust PTO/sick time; however, the employee may also elect ESICK for this period of time. In the latter scenario, the employee is effectively paid for 12 weeks, receiving 2/3 of regular pay, up to $200 daily.
The Americans with Disabilities Act (ADA), prohibits discrimination against people with disabilities in employment, transportation, public accommodation, communications, and governmental activities and applies to employers with 15 or more employees. In addition to the ADA, employees with disabilities also may be covered by state law. The ADA ensures equal opportunity in selecting, testing, and hiring qualified applicants with disabilities; job accommodation for applicants and workers with disabilities when such accommodations would not impose "undue hardship;" and equal opportunity in promotion and benefits.
It is unlikely that the coronavirus will implicate the American’s with Disabilities Act. For the ADA to apply, an employee must have a disability that substantially limits a major life activity due to a mental or physical impairment. Conditions that are transitory in nature, generally, are not covered by the ADA. Symptomatic employees may be “regarded as” disabled, thus triggering the ADA.
However, in light of the pandemic declaration, the EEOC has provided guidance to employers for compliance during these times, noting that the ADA continues to apply. However, the EEOC has noted the following for compliance:
The Worker Adjustment and Retraining Notification Act (WARN), and related state laws, provide direction and guidance with respect to layoffs/furloughs. WARN requires employers with 100 or more employees to provide a 60-day advanced written notice to the displaced workers, and other parties, in situations of a plant closure or mass layoff.
Plant closure occurs in a permanent or temporary shutdown of a single site of employment, or if one of more facilities operate as a single unit, and the shutdown results in an employment loss of 50 or more employees during a 30-day period. A mass layoff occurs in a reduction in force that is not the result of a plant closing but does result in loss of 500 or more employees, or an employment loss of at least 50 or more employees and at least 33% of the active workforce at the site during a 30-day period. The 30-day period may be extended to 90 days in some situations.
The Department of Labor has provided guidance on the issue of WARN compliance.
Advanced 60-day notice is unlikely considering the scope of the pandemic and may fall within the unforeseen business circumstances exception. While the 60-day time frame may be excused, notice is still required for plant closure or mass layoff for compliance.
WARN penalties are significant and may result in litigation/class action lawsuits.
Liability includes back pay and benefits for the period of violation, up to 60 days, for each affected individual. There are also penalties for the failure to notify government entities.
As noted, many states have their own WARN requirements, also known as “mini-WARN” laws. Some states are suspending their requirements, but this should be reviewed in conjunction with the federal law to ensure compliance during plant closure, mass lay off or furlough.
On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) was signed into law by President Trump, enacting the largest stimulus plan ever in response to the current health crisis.
The Cares Act includes a temporary expansion of unemployment compensation for certain individuals unemployed as a result of COVID-19. This temporary expansion is in effect through December 31, 2020, and includes individuals who certify that they are able and available to work but are unemployed due to several reasons, including but not limited to:
If an individual is unemployed or partially unemployed for one of the above-mentioned reasons, he or she will be entitled to a flat $600 per week in addition to the regular amount of unemployment compensation available under state law. In other words, some individuals receiving unemployment compensation under the temporary expansion may earn more than they would if they continued working at their normal rate.
In addition to the increased weekly amount, the Cares Act also extends the duration of benefits available for covered individuals. Employees that have exhausted their maximum unemployment benefits under state plans will also be entitled to an additional 13 weeks of benefits. As such, covered individuals may be able to earn up to 39 weeks of unemployment compensation benefits.
Many states will also likely eliminate any waiting provisions for covered employees as the federal government is fully funding the first week of unemployment compensation for states that suspend these waiting periods. In other words, many employees will immediately receive unemployment benefits after they are laid off.
The CARES Act allocated $350 billion to create the Paycheck Protection Program, an initiative to aid small businesses in retaining workers during the current health crisis. The program is modeled after the already existing Small Business Association (SBA) 7(a) loan program and provides that these 100% federally guaranteed loans will also be forgiven if the borrowers maintain their payrolls and retain their workforce during the pandemic, or subsequently restore such payrolls.
To be eligible for the payroll protection loan, the entity must be a small business with fewer than 500 employees. The Chamber of Commerce has made it clear that the 500-employee threshold includes all employees: full-time, part-time, and any other status. In evaluating eligibility, lenders are directed to consider whether the borrower was in operation before February 15, 2020 and had employees for whom they paid salaries and payroll taxes or paid independent contractors. Among other things, lenders will also ask for good faith certification that the loan request is necessary to support ongoing operations. The loans must be used for “payroll costs,” which includes salaries; payroll support such as paid sick, medical, or family leave, and costs related to the continuation of group healthcare benefits during those periods of leave; mortgage, lease and utility payments; and debt obligations incurred before February 15, 2020.
The program also provides that the borrowers may be eligible for loan forgiveness up to the amount expended by the borrower for payroll costs, interest on mortgage incurred prior to February 15, 2020, rent payments on leases in place prior to February 15, 2020, and utility payments for services in place prior to February 15, 2020. Obviously, the amount of loan forgiveness may not exceed the principal amount of the loan. Moreover, the amount of loan forgiveness will be reduced
In addition to the Paycheck Protection Program, the CARES Act also expanded the Disaster Loan Program (EIDL Program). The EIDL program provides longer-term loans to small businesses that do not employ more than 500 employees and individuals operating as sole proprietorships or independent contractors, among other entities. Although these loans have favorable terms for borrowers, they are not eligible for loan forgiveness like the Paycheck Protection loans. However, applicants of Disaster Loans can request advances up to $10,000.00, which do not require any repayment by the applicant, even if the application is denied. EIDL loans may also be utilized for payroll costs and other costs associated with the business disruption caused by COVID-19. It should also be noted that the maximum amount that can be borrowed for EIDL loans is $2 million, as opposed to the $10 million amount that can be borrowed for Paycheck Protection loans.
Both programs provide affected businesses with excellent options to weather the economic storm as a result of COVID-19’s impact and determining which program is best for each employer will have to be analyzed on a case-by-case basis.
The CARES Act essentially provides eligible employers with up to three favorable tax provisions.
First, certain employers may be eligible for a fully refundable tax credit for maintaining employees on their payroll despite COVID-19-related economic hardship. Specifically, eligible employers can receive tax credits equal to 50 percent of qualified wages (including qualified health plan expenses) paid to their employees, up to $10,000 per employee. The credit applies for qualified wages paid after March 12, 2020, and before January 21, 2021. The maximum credit for an eligible employer for qualified wages paid to an employee is $5,000. Eligible employers include those employers that carried on a trade or business during 2020 and either fully or partially suspended operations during any calendar quarter in 2020 due to government orders limiting commerce, travel, or group meetings due to COVID-19; or that experienced a significant decline in gross receipts during the calendar quarter.
In addition to the employee retention tax credit, employers also have the option of deferring their share of Social Security taxes owed as payroll taxes. These deferred taxes must be repaid over the following two calendar years. The first half is due no later than December 31, 2021, and the remaining half is due no later than December 31, 2022.
Finally, in an effort to promote employee retention the CARES Act provides that some payments of student loans by employers can be excluded from gross income. The Act specifically expands Section 127 of the US Tax Code and allows employers to contribute up to $5,250 toward each employee’s student loans through Dec. 31, 2020, on a tax-free basis.
Pursuant to the OSHA’s General Duty Clause, employers are required to provide employees with “employment and a place of employment, which are free from recognized hazards that are causing or are likely to cause death or serious physical harm.” As a result, employers have an obligation to respond to the pandemic to ensure the safety and well-being of their employees.
Section 5(a)(1) of the Occupational Health and Safety Act (OSHA) imposes a general duty on employers to provide a safe workplace to its employees. Specifically, employers must “furnish…a workplace free from recognized hazards that are causing or likely to cause death or serious physical harm.” There are clear implications with respect to the COVID-19 pandemic. To that end, OSHA issued guidance in March 2020 to help employers. The recommendations are not mandatory, nor do they impose new legal obligations on employers. With that said, employers are urged to review and implement the recommendations to the fullest extent possible.
OSHA recommends that employers develop an infectious disease preparedness plan. This includes keeping up to date on all federal, state and local guidance, as well as identification of their workplaces’ specific risks to exposure. Employers should also prepare and implement basic infection prevention measures, such as policies encouraging frequent hand-washing and social distancing, as well as those encouraging employees to stay home if they are showing symptoms of the disease. OSHA recommends that employers develop policies and procedures to promptly identify and isolate sick employees. Last, but not least, OSHA recommends that employers develop, implement, and promote flexible workplace policies to accommodate employees impacted by COVID-19.
OSHA notes that the best way to control a hazard is to systemically remove it from the workplace. To that end, employers are encouraged to immediately isolate and remove any employee who exhibits symptoms or may have been exposed to the virus. There are other practical steps, or controls, that employers can implement to mitigate risk. OSHA discusses four types in order from most to least effective: engineering controls; administrative controls; safe work practices; and, personal protective equipment. Engineering controls refer to a physical modification of the workplace, such as installation of high-efficiency air filters, ventilation, or physical barriers to separate employees from each other and members of the public. Administrative controls include changes to workplace policy or procedure to minimize the risk of exposure. This could include prohibitions against employee travel, use of telecommunication in lieu of in-person meetings, or modifying schedules and shifts to reduce the number of employees on the worksite at any given time. Safe work practices include requiring regular sanitation and handwashing, as well as providing the resources necessary for the same.
Last, but not least, OSHA reminds employers that they are obligated to provide personal protective equipment to their employees. Concerning COVID-19, this typically means gloves, respirators and face-shields. With that said, this obligation should be based upon the risk level inherent to the specific job. To that end, OSHA classifies jobs from low risk (no close contact with the general public, or other employees) to very high risk (typically reserved for healthcare workers). Employers should assess their own workplace risk level and implement appropriate policies and controls.
Workers’ Compensation claims and occupational diseases are another concern for employers. It is important to note that workers’ compensation laws vary greatly from state to state. Therefore, it is crucial that employers consult with counsel whom is well versed in their state’s laws. There are a number of general considerations pertaining to workers’ compensation claims and the coronavirus.
The highly infectious nature of the disease will make any claim for benefits difficult to prove. In most states, the employee will bear the burden of proving that they contracted the disease while at work, and not some other place like the grocery store, gas station or pharmacy. It is suggested that most medical professionals will be hesitant to ascribe the level of certainty necessary to meet this burden. Of course, first responders and those in the healthcare industry face an obvious risk of exposure that is uncommon in most other industries. These workers may have an easier time tracing their contraction to their workplace. This is not as clear in the case of workers dealing with the general public, such as a cashier or waitress. While the risk is certainly higher than those who are isolating at home, the burden remains difficult to prove absent a clear and obvious exposure event.
Beyond the mere contraction of COVID-19, employers should also be aware of mental injuries. Many states recognize psychiatric injuries caused by psychological trauma. It is easy to imagine such an injury in the case of the current pandemic. A worker may claim they developed anxiety over the risk of exposure to the disease. Generally, the burden of proof is high, and the employee must demonstrate that the stressors they face are peculiar to their industry as opposed to the workforce at large.
In summary, because of the difficult evidentiary burden facing most claimants alleging a COVID-19 related injury, it is generally recommended that employers deny claims unless the evidence is clear and overwhelming that the injury was sustained at work.
Last, but not least, most state governments have imposed some level of shutdown on non-essential businesses. In the workers’ compensation setting, an employer may have several employees who have recognized work injuries unrelated to the coronavirus. If these employees had been working on a modified-duty basis, the question arises as to whether or not their total disability benefits should be reinstated now that they are out of work. In general, employers are cautioned against reinstating total disability benefits in these circumstances. The reason that the claimant is losing wages has nothing to do with their work injury; rather, it was the result of government efforts to stem the spread of a global pandemic.
Given the highly infectious nature of the disease, employers should prepare for the real possibility that one of their employees may contract the disease. Employers should follow the recommendations and guidance set forth by OSHA, the CDC, as well as all federal and state law including the FFCRA and the CARES Act.
Notably, the employer should immediately isolate and remove the infected employee from the workplace. If the employer employs fewer than 500 employees, the infected employee is entitled to 14 days of pay at his regular rate. Once removed, the employee’s station and/or equipment should be thoroughly cleaned and sanitized. The employer should also notify any other employee who worked in close proximity to the infected employee, or the same area, or used the same equipment.
Consideration should be given to remove each of these employees from the workplace. Of note, pursuant to the new laws, these employees may also be entitled to 14 days of paid sick leave if they are exhibiting symptoms and seeking a medical diagnosis, or if they have been ordered to self-quarantine by a medical provider. Individual control measures, discussed above, should be implemented to promote a safe workplace. This includes providing personal protective equipment such as gloves, masks, and ventilators to all employees, as well as additional resources to promote sanitation. Lastly, great care should be taken to protect the identity of the infected employee to avoid HIPAA concerns.
In conclusion, employers must be proactive in managing the COVID-19 pandemic and the associated employment issues. Employers are encouraged to consult with an experienced attorney to discuss the potential options available at this time and in the future. The Chartwell Law Employment and Labor Practice is available to assist during these trying times.