COVID-19 Preparedness: Updates and Answers from Smith & Downey Douglas Desmarais, Esq., Smith & Downey Adam Meehan, Esq., Smith & Downey March 27, 2020
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Coronavirus (COVID-19) Employer Updates March 27, 2020 Doug Desmarais, Esq. – (410) 321-9348 ddesmarais@smithdowney.com Adam M. Meehan, Esq. – (410) 321-9347 ameehan@smithdowney.com
Note that this presentation is intended as a general discussion of the law and is not intended as legal advice for any particular situation.
Families First Coronavirus Response Act • Signed into law last week and is effective April 1, 2020, although there is a nonenforcement period until April 17. • Overview: • New paid sick leave for COVID-19 reasons • Expansion of Family and Medical Leave Act (FMLA) • Which includes certain COVID-19 reasons and a new paid leave component • Has payroll tax credit included to help fund the paid leave mandates • Unemployment help for state unemployment insurance • Two “Divisions” related to employment law: • Division C – Emergency Family and Medical Leave Expansion Act • Division E – Emergency Paid Sick Leave Act • Applies to employers with fewer than 500 employees
Calculating 500 Employees • DOL will follow the FLSA “joint employer” test for paid sick time, and the FMLA “integrated employer” test for emergency FMLA expansion • The integrated employer test is fact-specific and generally looks at the following factors (no one factor controls, the relationship is viewed in the totality): • Interrelation of operations (i.e., common offices, common record keeping, shared bank accounts and equipment); • Common management, common directors and boards; • Centralized control of labor relations and personnel (i.e., do you share HR functions, share the same handbook, etc.?); • Common ownership and financial control.
Division E – Emergency Paid Sick Leave • Applies to employers with fewer than 500 employees • Provides ten days of paid leave • 80 hours for full-time employees • Pro-rata amount for part-time employees based on two-week average • May be used for six COVID-19-related reasons • Amount paid is subject to caps, which are subject to the reason the leave is being used • Secretary of Labor may issue certain regulations which would exclude health care providers and EMTs from the definition of “employee” and exempt employers with fewer than 50 employees if certain circumstances apply
PST Reasons • Under the Emergency PST, there are six uses for sick leave: 1. The employee is subject to a Federal, State, or local quarantine; 2. A health care provider has advised the employee to self- quarantine; 3. The employee has symptoms and is seeking diagnosis; 4. The employee is caring for an individual under quarantine; 5. The employee is caring for a child whose school or place of care is closed or a child care provider is unavailable due to COVID-19; or 6. The employee is experiencing any other substantially- similar condition.
“Unable” to Work or Telework • Unclear what it means to be “unable” to work or telework • Could mean the following: • Employee is literally unable to work or telework because the employee cannot be set up to do the job from home; or • Employee could theoretically do the job from home, but working or teleworking is impossible or impracticable due to the child’s needs
PST Payment • For reasons 1, 2, and 3, the employee must be paid at his/her normal rate of pay, up to $511/day and $5,110 in the aggregate • For reasons 4 or 6, the employee must be paid at 2/3rds his/her normal rate, up to $200/day and $2,000 in the aggregate • For reason 5 (to care for a child whose school/place of care), the employee must be paid at 2/3rds his/her normal rate, up to $200/day and $12,000 in the aggregate • Due to its inclusion in expanded FMLA section • Payments are for a 12-week period – two weeks of paid sick leave followed by up to 10 weeks of paid expanded family and medical leave
PST Part-time Calculation • Regular schedule: Part-time employees are entitled to a pro- rata amount based on number of hours regularly worked during a two-week period • Example: Employee regularly scheduled to work 25 hours a week. Employee is entitled to 50 hours of PST. • Varied schedule: • Calculated based on the average number of hours the employee was scheduled per day over the last 6 months before leave • If the employee has not worked 6 months, he/she is entitled to the reasonable expectation of the employee at the time of hire regarding the average number of hours he/she would be scheduled to work
PST Continued • PST must be available for immediate use on April 1, regardless of how long the employee has been employed by an employer • The Act also prohibits an employer from requiring employees to draw from existing paid time off (personal, sick, vacation leave, etc.) • The employee must be allowed to use PST before dipping into any other accrued leave provided by the employer • Consider it a new leave bank – in addition to other leave already provided by the employer • Notice and Records: • Must post the DOL-provided notice/poster • Must keep records related to use for 3 years
Required Notice for PST • Where leave is foreseeable, an employee should provide as much notice of leave to the employer as is practicable • After the first workday of paid sick time, an employer may require employees to follow reasonable notice procedures in order to continue receiving paid sick time
Intermittent PST Use? • Unclear, but it’s a likely “yes” • Amount of PST is described in “hours” • Employee’s right to take paid sick leave ends on the “next scheduled workshift immediately following the termination of the need for paid sick time” • Raises some question as to whether the employee would be able to use any remaining sick leave in the future once they have returned from leave
Employee Benefits During PST • Likely treat the same as you do for any other paid bank of leave (vacation, PTO, sick leave, etc.) • Review health plan for any possible COBRA issues
Division C – FMLA Expansion • Also applies to employers with fewer than 500 employees • There is an exemption for health care providers and EMT workers, as well as employers with fewer than 50 employees, if the leave would jeopardize the viability of their business as a going concern • Employees are eligible if they’ve been on payroll for 30 calendar days immediately prior to the day leave would begin • Allows for up to 12 weeks of leave • Provides for an additional use for FMLA leave: • Where the employee is unable to work or telework due to the need for leave to care for his/her minor child (younger than 18 years old) because the child’s school or place of care has been closed, or the child care provider is unavailable, due to a public health emergency • Use is also included in the Emergency PST
FMLA Expansion • The first ten work days may consist of unpaid leave • The employee is able to substitute any accrued vacation leave, personal leave, or medical/sick leave for this unpaid leave – and the employee may use unused PST time as well • After first ten days, leave must be paid in an amount equal to 2/3rds of the employee’s regular rate of pay • Up to $200/day, and $10,000 in the aggregate • The employee is only entitled to a total of 12 weeks of leave due to caring for a child whose school or place of care has closed because of COVID-19 • First two weeks can be paid under the Paid Sick Leave provision, while the next 10 weeks will be paid under the FMLA expansion provision
Intermittent FML Use? • Also unclear (similar to PST) • Aggressive interpretation : If an employee can physically do the job from home, they are not “unable to work or telework” and not entitled to emergency FML • Conservative interpretation : An employee may be able to physically do the job from home, but realistically is not able to telework because of the needs of the child • Recommendation : Track hours actually worked; pay regular rate for hours actually worked; pay 2/3rds wage rate for hours not worked up to normal schedule (and capped at $200/day); and only count hours not worked against the 12-week entitlement
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