Wake up, emergency paid leave is real, you might be selling toilet paper to make ends meet if your business is forced to close due to COVID-19. I keep repeating that we can’t control other people, we can only control ourselves and how we choose to run our business. Well, that’s all very true, but what if there’s a public health emergency that has taken control of how we run our business? It’s hard to believe that this is our reality today. It breaks my heart to see business owners shutting down operations because of mandated government action or because the liability insurance carrier has threatened no coverage if they remain open. Maybe you are a small business that can remain open but scared about how the requirement of emergency paid leave is going to affect your cash flow? What choices do you have? There are some choices for both you the business owner and your employees. Let’s not forget civility is good for business and when this all blows over, the actions you take during this crisis “will have a long-lasting effect on our country, whatever this country looks like when this crisis is over.”
DISCLAIMER! At any moment this blog post may be inaccurate as the President, the Senate or the Secretary of Labor may issue additional guidance or additional requirements regarding emergency paid leave, tax credits, and who knows what else is coming down. Please see our additional disclaimer that this is not legal advice if you have a question about your particular circumstances then talk with an attorney. https://danaballlaw.com/terms-disclaimer-privacy-policy/
FAMILIES FIRST CORONAVIRUS RESPONSE ACT (ACT)
On Wednesday, March 18th, President Trump signed into law the Act. The Act allows paid emergency leave to employees. Here’s the rundown:
WHAT IS THE EFFECTIVE DATE?
Effective on April 2, 2020, and the law expires on December 31, 2020.
WHAT EMPLOYERS ARE COVERED BY THE ACT?
If you employ 500 or fewer employees, then this applies to you. The Act is not clear on how the 500-employee threshold is calculated, but the Department of Labor would probably use the integrated employer test from the FLSA and/or the FMLA to make this determination.
EMERGENCY FAMILY AND MEDICAL LEAVE ACT (E-FMLA)
E-FMLA applies to small businesses that are not accustomed to providing such leave if they have less than 50 employees. If you have never provided such leave before then don’t wait to figure out your obligations with the E-FMLA to avoid any mistakes that could land you in a legal mess. This E-FMLA applies to any employer with fewer than 500 employees.
WHO IS AN ELIGIBLE EMPLOYEE UNDER THE E-FMLA?
Any full or part-time employee that has been on your payroll for 30 calendar days. Take note, the Act allows you to exclude employees who are considered health care providers or emergency responders from E-FMLA benefits.
HOW LONG CAN AN EMPLOYEE TAKE LEAVE UNDER E-FMLA?
Eligible employees are entitled to take up to 12 weeks of E-FMLA leave for a “qualifying need related to a public health emergency.”
UNDER WHAT REASONS CAN AN EMPLOYEE TAKE LEAVE UNDER THE E-FMLA?
The “qualifying need” is limited to circumstances where an employee is unable to work at the job site or unable to telework (from home or another location) in order to care for a minor child if the child’s school or place of child care has been closed or is unavailable due to a public health emergency.
HOW DO YOU PAY AN EMPLOYEE DURING E-FMLA LEAVE?
- The first 10 days are considered unpaid. However, if an employee has accrued sick leave or paid time off with the employer than the employee can be paid from those built-up accruals. Or, the employee can be paid for the first 10 days under the Emergency Paid Sick Leave part of the Act (see below).
- The remaining 10 weeks are paid at 2/3 of the employee’s regular rate of pay, for the number of hours the employee would have been scheduled to work. The Act sets a maximum payment of $200 per day and $10,000 in total.
CAN AN EMPLOYEE SUE A SMALL BUSINESS OVER E-FMLA ISSUES?
The Act exempts employees from suing a small business with less than 50 employees from civil damages such as back pay or liquidated damages. Be careful though, even if you have less than 50 employees, an employee can still sue you for discrimination and retaliation regarding E-FMLA.
DOES AN EMPLOYEE HAVE JOB PROTECTION AFTER TAKING LEAVE UNDER E-FMLA?
Yes, the employee has the same right to job reinstatement under the traditional FMLA rules, unless:
- you have less than 25 employees; and
- the employee’s position no longer exists following leave due to operational changes because of the public health emergency.
If your business suffers an economic downturn because of the COVID-19 pandemic, then there’s no requirement that you restore the employee to the same or equivalent position upon their return to work. If you meet such requirements, then don’t forget that you will have a duty to make reasonable efforts to contact such an employee for up to one year if an equivalent position becomes available at your company.
EMERGENCY PAID SICK LEAVE ACT (EPSLA)
Like the E-FMLA, the EPSLA applies to employers with less than 500 employees.
WHO IS AN ELIGIBLE EMPLOYEE UNDER THE EPSLA?
Any employee is immediately eligible for paid sick leave so it doesn’t matter if they have only worked for you for one hour, they are eligible.
HOW LONG CAN AN EMPLOYEE TAKE LEAVE UNDER EPSLA?
Up to 80 hours and if part-time then the number of hours will be the average number of hours worked in a two-week period.
UNDER WHAT REASONS CAN AN EMPLOYEE TAKE LEAVE UNDER THE EPSLA?
You are required to provide paid sick leave to an employee who is unable to work or telework because:
- the employee is subject to a federal, state, or local quarantine or isolation order related to COVID-19;
- the employee has been advised by a health care provider to self-quarantine because of COVID-19;
- the employee is experiencing symptoms of COVID-19 and is seeking a medical diagnosis;
- the employee is caring for an individual subject or advised to quarantine or isolation;
- the employee is caring for a son or daughter whose school or place of care is closed, or childcare provider is unavailable, due to COVID-19 precautions; or
- the employee is experiencing substantially similar conditions as specified by the Secretary of Health and Human Services, in consultation with the Secretaries of Labor and Treasury.
HOW DO YOU PAY AN EMPLOYEE DURING EPSLA LEAVE?
An employee will be paid at their regular rate of pay for EPSLA leave unless the leave is to care for a family member (reasons 4, 5, and 6 above). Then the EPSLA leave is paid at 2/3 the employee’s regular rate of pay. The Act limits paid leave to $511 per day ($5110 in total) where leave is taken for reasons 1, 2, and 3 above and limits it to $200 per day ($2000 in total) where leave is taken for reasons 4, 5, and 6 above.
CAN AN EMPLOYEE SUE A SMALL BUSINESS OVER ESPLA ISSUES?
As with other similar laws, the Act includes anti-discrimination and anti-retaliation protections and provides for penalties for failure to pay wages.
HOW WILL THE TAX CREDITS WORK TO COMPENSATE FOR THE ADDITIONAL EMERGENCY PAID LEAVE PAYROLL COSTS?
The tax credit of 100% of qualified paid emergency leave is allowed against the Social Security Taxes you pay quarterly. However, it seems that if the credit is more than the amount for social security taxes for that quarterly payroll, then it’s not clear if the IRS plans to send you a check to reimburse you for that extra amount. It’s important for you to document the reasons why your employees are absent from work because the exemptions and credits will not apply if the leave is taken for any other reasons then what is allowed under the Act.
WHAT IF I’M SELF-EMPLOYED, DO I GET A TAX CREDIT?
It depends on whether you meet the qualifications like the ones established for employees taking leave under either E-FMLA or ESPLA. It seems like your tax credits won’t come until you file your 2020 taxes next April 15, 2021. The Secretary of Labor will probably offer more updates on this soon.
COULD I BE LIABLE FOR WORKPLACE SAFETY VIOLATIONS DUE TO COVID-19?
Possibly if you are not taking the appropriate steps to protect the workplace and ensure it is not exposed to individuals who may have contracted the COVID-19 virus as outlined by the Occupational Safety and Health Administration (OSHA). Employers can mitigate general liability by communicating best practices with employees as well as reviewing existing workplace rules and safety guidelines.
WHAT SHOULD I KNOW ABOUT THE ADA, THE REHABILITATION ACT, AND COVID-19?
The EEOC has provided guidance that help employers implement strategies to navigate the impact of COVID-19 in the workplace. Click here for answers to questions like, “Can I take the temperature of my employees during the COVID-19 pandemic?”
ARE MY WORKERS ELIGIBLE FOR UNEMPLOYMENT BENEFITS IF I HAVE TO SHUT DOWN DUE TO COVID-19?
There are specific guidelines for individuals who may be eligible for unemployment benefits in the state of Utah if you temporarily cease operations. Click here for the frequently asked questions for employers.
WHERE DO I BEGIN AS AN EMPLOYER?
Be in control and take action now to protect your business and your employees. You have options. I encourage you to click on the links included for more information and please contact an attorney to help you navigate your obligations regarding your particular situation during this public emergency of COVID-19. Again, things are changing daily so stay tuned.