Employment Law Summary

March 20, 2020
Updated March 31, 2020

INTRODUCTION
On March 18, 2020 President Trump signed the Families First Coronavirus Response Act (“FFCRA”). The FFCRA contains several separate Acts, including Acts to expand family and medical leave and guarantee emergency paid sick leave for employees who work for public and private employers. Certain employees are now entitled to paid family and medical leave and emergency paid sick leave. While employers are obligated to pay for such leave, the FFCRA creates payroll tax credits that covered employers can take advantage of later.

MONTEREY COUNTY AND STATEWIDE SHELTER IN PLACE ORDERS
On March 17, 2020 the Monterey County Health Department issued an order directing all county residents to shelter in place, with certain exceptions. One of the exceptions is that individuals may go to work if they work for an “Essential Business” or to provide “Minimum Basic Operations” as those terms are defined in the order. On March 19, 2020, Governor Newsom ordered that individuals who work in 16 specific sectors may continue their work, and all other Californians must shelter in place. If these orders prohibit employees from going to work and they cannot work remotely, they may be eligible for emergency paid sick leave and Expanded Family and Medical Leave, also discussed below. The Monterey County Shelter in Place Order can be viewed at: https://files.constantcontact.com/6729da79001/1f16f3b4-7809-483c-ae28-7a8407cf8320.pdf and the statewide order is available at https://www.gov.ca.gov/wp-content/uploads/2020/03/3.19.20-EO-N-33-20-COVID-19-HEALTH-ORDER-03.19.2020-signed.pdf.

EMERGENCY PAID SICK LEAVE ACT
The Emergency Paid Sick Leave Act (Emergency Paid Sick Leave) provides for temporary emergency paid sick leave for certain employees that are unable to work (or telework) for specific reasons that relate to COVID-19. These emergency provisions are effective April 1, 2020 and automatically end on December 31, 2020.
Covered Employers: The Act applies to private employers with fewer than 500 employees and public employers with 1 or more employees. The Secretary of Labor has the authority to exempt employers with fewer than 50 employees “when the imposition of such requirements would jeopardize the viability of the business as a going concern.”

Eligible Employees: All employees are eligible to use this leave immediately, regardless of how long the employee has been employed by the employer. Employers who employ healthcare providers or emergency responders may exclude such employees from eligibility for emergency paid sick leave.

Qualifying Need: Employees are entitled to the emergency paid sick leave benefits below if they are unable to work (or telework) because of any of the following six reasons:

• The employee is subject to a Federal, State, or local quarantine or isolation order related to COVID-19. If a business closes or an employee’s hours are reduced due to lack of work the employee is not eligible for emergency sick leave benefits even if the closure is due to COVID-19 (see https://www.dol.gov/agencies/whd/pandemic/ffcra-questions);
• The employee has been advised by a health care provider to self-quarantine due to concerns related to COVID–19;
• The employee is experiencing symptoms of COVID–19 and seeking a medical diagnosis;
• The employee is caring for an individual who is subject to a Federal, State, or local quarantine or isolation order related to COVID-19 or has been advised by a health care provider to self-quarantine due to concerns related to COVID–19. Note that the employee can be providing care for any individual, not just a family member;
• The employee is caring for a son or daughter of such employee if the school or place of care of the son or daughter has been closed, or the childcare provider of such son or daughter 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. We anticipate the Secretary of Health and Human Services will issue regulations to identify such “substantially similar conditions.”

The Emergency Paid Sick Leave Benefits: Full-time employees are entitled to 80 hours of paid emergency sick leave. Part-time employees are entitled to the number of hours that they work on average over a 2-week period. If a part-time employee’s schedule varies from week to week, employers can determine the number of emergency paid sick leave hours that the employee is eligible for by (1) using a number equal to the average number of hours the employee was scheduled to work over the previous 6-month period, or (2) if the employee did not work over such a period, using a number equal to the amount of hours the employee would reasonably have been expected to work during each week.

Use of Emergency Paid Sick Leave Benefits: An employee may first use emergency paid sick leave before using accrued paid time off (i.e. vacation, regular sick leave, etc.). Employers cannot require the employee to use other accrued paid leave before the employee uses emergency paid sick leave. This emergency paid sick leave does not carry over from one year to the next and an employer’s obligation to pay such sick leave ceases when the employee’s need for the leave ends and the employee returns to work. Employers are not obligated to pay any unused emergency sick pay upon an employee’s separation of employment.

Compensation Amount for Emergency Paid Sick Leave Benefits: For each hour an employee is eligible for emergency paid sick leave, employers must pay the employee the following:

• The greater of the employee’s regular rate or the applicable minimum wage if the leave is necessary because of the following reasons. In these situations, employers do not have to pay any employee more than $511/day or $5,100 in the aggregate.
• 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 due to concerns related to COVID–19; or
• The employee is experiencing symptoms of COVID–19 and seeking a medical diagnosis.
• Two Thirds (2/3) of the greater of the employee’s regular rate or the applicable minimum wage if the leave is necessary because of the following reasons. In these situations, employers do not have to pay any employee more than $200/day or $2,000 in the aggregate.
• The employee is caring for an individual who is subject to Federal, State, or local quarantine or isolation order related to COVID-19 or has been advised by a health care provider to self-quarantine due to concerns related to COVID–19. Note that the employee can be providing care for any individual, not just a family member;
The employee is caring for a son or daughter of such employee if the school or place of care of the son or daughter has been closed, or the childcare provider of such son or daughter is unavailable, due to COVID–19 precautions. The term “son or daughter refers to the employee’s own child, including the employee’s biological, adopted, or foster child, stepchild, a legal ward, or a child for whom the employee is standing in loco parentis—someone with day-to-day responsibilities to care for or financially support a child. In light of Congressional direction to interpret definitions consistently, the Wage and Hour Division clarifies that under the FFCRA a “son or daughter” is also an adult son or daughter (i.e., one who is 18 years of age or older), who (1) has a mental or physical disability, and (2) is incapable of self-care because of that disability; or
• ; 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. We anticipate the Secretary of Health and Human Services will issue regulations to identify such “substantially similar conditions.”

Employer Notice: The Secretary of Labor has issued a model notice that must be posted at the worksite and distributed to employees who are working remotely. The notice is available in English and Spanish at https://www.dol.gov/agencies/whd/pandemic

Employee Notice: After the first workday (or portion thereof) an employee receives emergency paid sick leave, an employer may require the employee to follow reasonable notice procedures in order to continue receiving such paid sick time.
Prohibited Acts: Employers cannot discharge, discipline, or in any other manner discriminate against any employee who either takes emergency paid sick leave or files a complaint or testifies about the enforcement of this law. Employers are also prohibited from requiring employees to find coverage for their work/shift.

EMERGENCY FAMILY AND MEDICAL LEAVE EXPANSION ACT
The Emergency Family and Medical Leave Expansion Act (the “FMLA Expansion”) amends the Family and Medical Leave Act (“FMLA”) to include several emergency provisions that take effect April , 2020 and automatically end on December 31, 2020.
Covered Employers: The FMLA Expansion applies to employers with fewer than 500 employees. The Secretary of Labor has the authority to exempt employers with fewer than 50 employees “when the imposition of such requirements would jeopardize the viability of the business as a going concern.”
Eligible Employees: Employees must have been employed by the employer for at least 30 calendar days. The Secretary of Labor may exempt certain health care providers and emergency responders from eligibility for emergency FMLA leave or the employer may elect to exclude such employees from emergency FMLA leave.
Qualifying Need: Eligible employees are only entitled to the benefits below if they are unable to work (or telework) due to a need for leave to care for their own son or daughter (including biological, adopted, or foster child, a stepchild, a legal ward, or a child of a person standing in loco parentis) under 18 years of age or an adult son or daughter (i.e., one who is 18 years of age or older), who (1) has a mental or physical disability, and (2) is incapable of self-care because of that disability because the child’s school or place of care is closed or because the child’s normal care provider is unavailable. This need must be related to the COVID-19 emergency.
The Emergency Paid FMLA Leave Benefits: The FMLA Expansion provides for both unpaid and paid emergency FMLA leave for a maximum of 12 weeks. Employees are required to provide employers with notice of the need for such leave as soon as practicable.
The first 10 days of the emergency FMLA leave can be unpaid. During this time, employees may elect to use any accrued vacation, personal leave, or medical or sick leave. The employer may require the employee to substitute accrued paid leave during this period if the employee is not receiving any other forms of payment such as short-term disability.

After the first 10 days of the emergency FMLA leave employers must pay eligible employees at least two-thirds (2/3) of their regular pay for the duration of the leave. The regular pay is determined by multiplying the employee’s regular rate by the number of hours the employee would normally be scheduled to work. If the employee’s schedule varies from week to week, employers can determine the number of hours for the regular pay calculation by (1) using a number equal to the average number of hours that the employee was scheduled to work over the previous 6-month period, or (2) if the employee did not work over such a period, using a number equal to the amount of hours the employee would reasonably have expected to work during each week.

Cap on paid FMLA leave. Notwithstanding the requirement to pay eligible employees at least 2/3 of their regular pay, employers do not have to pay more than $200 per day and $10,000 in the aggregate for emergency FMLA leave to each employee.

Notice requirements: Employees are required to provide employers with notice of the need for such leave as soon as practicable.

Guaranteed Reinstatement: Employers with fewer than 25 employees do not have to comply with the normal FMLA rule to restore employees to their original position at the end of the emergency FMLA leave if: (1) they provide the employee emergency FMLA leave; and (2) the employee’s position no longer exists due to economic conditions or necessary changes in the employer’s operating conditions as a result of the public health emergency; and (3) the employer makes reasonable efforts to restore the employee to an equivalent position, but such efforts fail. If an equivalent position becomes available within a one-year period after the employee’s need for leave concludes, the employer must make reasonable efforts to contact the employee to reinstate the employee to the employee’s position.

TAX CREDITS FOR PAID SICK AND PAID FAMILY AND MEDICAL LEAVE

The FFCRA includes a series of refundable tax credits for employers providing emergency paid sick leave and emergency family and medical leave. For the emergency family and medical leave, employers will be entitled to 100% credit for family and medical leave wages paid, capped at $200 per day and $10,000 in the aggregate per employee. For emergency paid sick leave, employers will be entitled to a 100% credit against the employer portion of Social Security taxes for emergency paid sick leave wages paid to employees, subject to the following caps:

$511 per day for up to 10 days for leave taken for the following reasons:
• 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 due to concerns related to COVID–19; or
• The employee is experiencing symptoms of COVID–19 and seeking a medical diagnosis.
$200 per day for up to 10 days for leave taken for the following reasons:
• The employee is caring for an individual who is subject to a Federal, State, or local quarantine or isolation order related to COVID-19 or has been advised by a health care provider to self-quarantine due to concerns related to COVID–19. Note that the employee can be providing care for any individual, not just a family member;
• The employee is caring for a son or daughter of such employee if the school or place of care of the son or daughter has been closed, or the childcare provider of such son or daughter 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. We anticipate the Secretary of Health and Human Services will issue regulations to identify such “substantially similar conditions.”

Examples of the credit are included in the guidance at https://www.dol.gov/newsroom/releases/osec/osec20200320.

TAKEAWAYS

Here are some takeaways to consider as you read and analyze the specific requirements of this new law. As always, feel free to contact any of the attorneys in our employment group for more information and assistance at (831) 373-1241 or www.fentonkeller.com

• The emergency paid sick leave and FMLA expansion apply only to employees who are unable to work or telework due to COVID-19 related concerns.
• Create new pay codes for the emergency paid sick leave and the paid portion of FMLA expansion. Be certain to reflect these types of pay on employee paystubs.
• Create a designated email address or location on your company intranet for employees to ask questions about these benefits. This will help you manage consistent communication.
• Employers may avoid the need for paid leave and accommodate such family emergencies by providing employees with the option to work remotely.
• Employers must post a notice of the expanded family leave rights in the workplace and provide it to employees working remotely.
• The effective date of this law is April 1, 2020.
• Follow your existing vacation and sick leave policies. The FFCRA provides benefits in addition to existing law and employer policies.
• Employers of health care providers and emergency responders may elect to exclude those employees from emergency paid sick leave and FMLA expansion benefits.
• If you are implementing layoffs or terminations, be aware of WARN Act considerations. Governor Newsom’s Executive Order N-31-20 suspends the 60-day notice and penalty provisions of CAL-WARN for businesses implementing mass layoffs or terminations subject to certain conditions. The notice of layoff must be provided as soon as practicable. The federal WARN Act contains a notice exception for “unforeseeable business circumstances outside the employer’s control” and natural disasters. See at https://www.edd.ca.gov/about_edd/coronavirus-2019/faqs/WARN.htm
• Employees who are laid off or have reduced hours may be eligible for unemployment insurance benefits.
• Remember that even though the FFCRA is new, employers need to continue to follow existing FMLA rules, applicable discrimination, privacy and wage & hour laws, and provide compliant pay statements.
• Be on the lookout for Department of Labor regulations exempting small businesses from the requirements of the expanded FMLA paid leave and other pending legislation offering additional benefits to employees and assistance to small employers.

ADDITIONAL STATE AND FEDERAL RESOURCES:
https://www.dol.gov/agencies/whd/pandemic
https://www.dol.gov/newsroom/releases/osec/osec20200320
https://www.labor.ca.gov/coronavirus2019/#chart
https://www.labor.ca.gov/coronavirus2019/
https://www.dir.ca.gov/dlse/2019-Novel-Coronavirus.htm
https://www.dol.gov/coronavirus
https://www.congress.gov/bill/116th-congress/house-bill/6201/text
https://www.dol.gov/agencies/whd/fmla/pandemic