Information for Employers During the COVID-19 Pandemic
On March 18, President Trump signed the Families First Coronavirus Response Act (H.R. 6201) (“FFCRA”), which includes a number of important provisions changing the rights and responsibilities of employers and employees in significant ways as related to the COVID-19 pandemic. The Act, which takes effect April 1 and expires December 31, 2020, includes provisions that (1) expand the availability of FMLA leave; (2) expand access to, and obligations to provide, paid sick leave; and (3) expand the availability of unemployment insurance. An informative Q&A about the FFCRA may be found here. At the same time, many states including Massachusetts have expanded access to unemployment insurance and have streamlined application processes.
The legal landscape is evolving quickly in the face of the COVID-19 pandemic—additional legislation is pending and state and local guidance is changing by the day, and sometimes by the hour. Check back for updates as information becomes available.
Emergency Family and Medical Leave
The expanded FMLA provisions (the Emergency FMLA Act) apply to employers with fewer than 500 employees—including employers with fewer than 50 employees that, prior to the FFCRA and outside of the COVID-19 context, are not normally considered “covered employers” under the FMLA. The provisions apply to full-time and part-time employees who have been on company payroll for at least 30 days, except that employers may choose to exclude employees who are health care providers or emergency responders. Also, employers with fewer than 50 employees may be exempt from the Emergency FMLA requirements if they can demonstrate that the viability of their business would be jeopardized by having to comply with the new law.
In addition to personal or family medical reasons, the FFCRA allows an employee to take emergency leave if they are unable to work (or telework) because they need to care for their child after that child’s school or regular place of childcare has been closed by a governmental authority due to COVID-19.
The first ten days of Emergency FMLA leave may be unpaid, although the employee may choose to use any accrued paid time off (including sick days) to continue to be paid during this time. Alternatively, according to guidance from the Department of Labor, the employee may elect to use the FFCRA’s Emergency Paid Sick Leave (discussed below) during the first ten days. After the first ten days, an employer must pay two-thirds of the employee’s regular rate of pay for the hours that the employee would have worked had they not taken leave. The paid leave is capped at $200 per day, with a maximum total payout of $10,000 per employee.
As with ordinary FMLA leave, employees returning from Emergency FMLA leave ordinarily must be returned to their same or similar positions. However, employers with fewer than 25 employees need not reemploy an employee if, during that employee’s leave, their position was eliminated due to economic conditions caused by the COVID-19 public health emergency and the employer made reasonable efforts to offer the employee an equivalent position.
The FFCRA also provides that an employer may recoup 100% of the qualified family leave wages it pays in the form of a tax credit against its liabilities for the quarter in which the family leave pay is disbursed.
Emergency Paid Sick Leave
As with the expanded FMLA provisions, private employers with fewer than 500 employees are required to provide expanded paid sick leave under the FFCRA’s Emergency Paid Sick Leave Act. The paid sick leave provisions also apply to public agencies of any size.
Covered employers must provide paid sick leave to full-time and part-time employees who are unable to work for one or more of the following reasons:
- the employee is subject to COVID-19 quarantine or isolation based on government orders;
- the employee has been advised by a health care provider to self-quarantine due to COVID-19 concerns;
- the employee is experiencing COVID-19 symptoms and is awaiting diagnosis;
- the employee is caring for someone who is subject to either number (i) or (ii) above;
- the employee is caring for their child if the child’s school or daycare center has been closed, or the child’s childcare provider is unavailable due to COVID-19 precautions; or
- the employee is experiencing any other substantially similar condition specified by the secretary of health and human services in consultation with the secretary of the treasury and the secretary of labor.
An employee is entitled to paid sick leave for the equivalent of two weeks—80 hours for full time employees, or the number of hours a part-time employee would have worked during the two-week period—which can be terminated earlier if the need for the sick leave ceases. Pay during this leave is capped at $511 per day or $5,110 total if the employee takes leave because of reasons (i), (ii), or (iii), and $200 per day or $2,000 total if leave is taken for reasons (iv), (v), or (vi).
An employer may not require an employee to use other paid time off, including other sick leave, before using the provided emergency paid sick leave. Further, an employer may not require the employee to find another employee to cover the time they are taking the sick leave. Finally, an employer may not retaliate or discriminate against an employee who has elected to take paid sick leave provided by the FFCRA.
Employers are required to post a notice of the availability of the emergency FMLA and paid sick leave. The Department of Labor has provided a model notice on its website.
As with emergency paid family leave, the FFCRA also provides that an employer may recoup 100% of the qualified sick leave wages it pays in the form of a tax credit against its liabilities for the quarter in which the sick leave pay is disbursed.
The FFCRA provides for $1 billion in additional federal funds to be transferred to the Unemployment Trust Fund for distribution to states that amend their unemployment laws to expand availability of unemployment insurance to those affected by the COVID-19 pandemic.
In particular, to be eligible for additional funds, states must comply with notification and accessibility requirements, ensuring that: employers properly notify employees at termination of the availability of unemployment compensation; applications and assistance with applications are available by at least two of the following methods: in person, over the phone, or online; and that applicants are given proper notifications as to the status of their application throughout the process.
Further, states must increase access to unemployment, including by taking steps toward easing eligibility requirements for claimants, waiving work search requirements and waiting week periods, and avoiding charging employers impacted by COVID-19.
Massachusetts has passed legislation and issued regulations and guidance, in line with the FFCRA, in order to increase the availability of and ease of access to unemployment benefits. To that end, the normal one-week waiting period has been eliminated and applicants are no longer required to attend a seminar at a MassHire career center. Also, “worksearch” requirements for employees will be interpreted such that every COVID-19-affected claimant will collect benefits. Further, deadlines missed by employees and employers due to COVID-19 may be waived under the “good cause” provision. Employers severely impacted by COVID-19 may also request extensions for filings and paying contributions.
Employees who are quarantined by governmental or medical order, or who leave employment due to reasonable risk of exposure, are eligible for benefits without medical documentation. Workers whose hours have been cut may also apply for partial benefits. Further, employees whose workplaces are temporarily shut down or who are temporarily furloughed may seek unemployment benefits as long as they stay in contact with their employer and are able to perform whatever work there is to do.
Options for Employers Experiencing Slowdowns Due to COVID-19
Employers in Massachusetts and elsewhere may be experiencing slowdowns in business, or may foresee a slowdown in the future, due to COVID-19. Employers needing to make adjustments to their workforce should be aware that they have different options short of permanent terminations or layoffs that may help keep their business afloat while allowing their employees to get paid something. These options include:
- Reducing hours for hourly employees: cutting work hours allows employees to remain employed on a reduced schedule with the ability to apply for partial unemployment benefits.
- Reducing pay for salaried employees: assuming a salaried employee is employed on an at-will basis, the employee’s salary can be reduced during a slowdown in business caused by COVID-19.
- Furloughs or temporary layoffs: employers may require some or all employees to stop working altogether with the expectation that the furloughed employees will return after the COVID-19 crisis is over. Furloughed employees are eligible to collect unemployment benefits during the furlough period.
- Temporary shutdown: some businesses have been required to close by governmental authorities, or an employer may choose to close their business entirely due to COVID-19. Similar to a furlough, employees may collect unemployment benefits during a temporary shutdown.
Each of these options presents its own complexities, as well as unique pros and cons. We are available to walk any interested clients through the various possibilities.
Beck Reed Riden LLP is Boston’s innovative litigation boutique. Our lawyers have years of experience at large law firms, working with clients ranging from Fortune 500 companies to start-ups and individuals. We focus on business litigation and employment. We are experienced litigators and counselors, helping our clients as business partners to resolve issues and develop strategies that best meet our clients’ legal and business needs – before, during, and after litigation. We’re ready to roll up our sleeves and help you. Read more about us, the types of matters we handle, and what we can do for you here.