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Labor Department Offers Guidance On Families First Coronavirus Response Act, Effective As Of April 1

March 25 - Posted at 1:54 PM Tagged: , , , , , , , ,

The U.S. Department of Labor released a preliminary “Questions and Answers” page today, attempting to answer some preliminary compliance questions related to the new Families First Coronavirus Response Act, which will bring emergency family and medical leave, as well as paid sick leave, for many employers across the country. The agency stated it also will be issuing implementing regulations regarding the new law in the near future. The big news is that the law will take effect April 1, 2020 – not April 2 as originally expected – but there are also plenty of other helpful pieces of information in the document. What do employers need to know about this latest development? 

Not An April Fool’s Joke: Law Effective April 1, 2020

As a major surprise, the Department of Labor (DOL) announced the paid leave provisions of the Families First Coronavirus Response Act (FFCRA) are effective on April 1, 2020 and will apply to leave taken between April 1, 2020 and December 31, 2020.

This effective date took many by surprise. The FFCRA states the leave provisions “shall take effect not later than 15 days after the date of enactment.” As the FFCRA was signed by President Trump on March 18, 2020, many assumed DOL would implement the law on April 2, 2020.

The DOL gave no reason why it chose to move up implementation by one day, but there is speculation this was done to line up the effective date of the law with the calendar quarter.

How Do You Count To 500?

Both leave provisions of the FFCRA apply to private employers with fewer than 500 employees. One of the most common questions for employers regarding the FFCRA involves uncertainty as to how and when you count employees for these purposes, and when you consider separate entities to be a single employer for these purposes. The DOL’s Questions and Answers attempt to address the following by stating:

You have fewer than 500 employees if, at the time your employee’s leave is to be taken, you employ fewer than 500 full-time and part-time employees within the United States, which includes any State of the United States, the District of Columbia, or any Territory or possession of the United States. In making this determination, you should include employees on leave; temporary employees who are jointly employed by you and another employer (regardless of whether the jointly-employed employees are maintained on only your or another employer’s payroll); and day laborers supplied by a temporary agency (regardless of whether you are the temporary agency or the client firm if there is a continuing employment relationship). Workers who are independent contractors under the Fair Labor Standards Act (FLSA), rather than employees, are not considered employees for purposes of the 500-employee threshold.

Typically, a corporation (including its separate establishments or divisions) is considered to be a single employer and its employees must each be counted towards the 500-employee threshold. Where a corporation has an ownership interest in another corporation, the two corporations are separate employers unless they are joint employers under the FLSA with respect to certain employees. If two entities are found to be joint employers, all of their common employees must be counted in determining whether paid sick leave must be provided under the Emergency Paid Sick Leave Act and expanded family and medical leave must be provided under the Emergency Family and Medical Leave Expansion Act.

In general, two or more entities are separate employers unless they meet the integrated employer test under the Family and Medical Leave Act of 1993 (FMLA). If two entities are an integrated employer under the FMLA, then employees of all entities making up the integrated employer will be counted in determining employer coverage for purposes of expanded family and medical leave under the Emergency Family and Medical Leave Expansion Act.

Therefore, the DOL provides the opinion that an employer is covered if, at the time the leave is to be taken (a “snapshot” approach), the business employs fewer than 500 employees.  Moreover, the analysis addresses important issues regarding whether separate entities are counted as one employer for purposes of the new leave laws. First, the DOL states that if two entities are found to be “joint employers” under the FLSA, all of their common employees must be counted in determining whether leave must be provided under for Emergency Paid Sick Leave and Emergency Family and Medical Leave.

The DOL document also states that if two entities are an “integrated employer” under the Family Medical Leave Act (FMLA), all of the employees of the integrated employer will be counted in determining employer coverage for purposes of Emergency Family and Medical Leave.

The “joint employer” analysis under the FLSA and the “integrated employer” analysis under the FMLA are complicated and involve a critical analysis of specific facts. Employers with questions about how these tests may apply to their specific situation should reach out for legal opinion.

Is The FFCRA Retroactive?

Another common inquiry was whether employees can take paid sick leave under the FFCRA prior to the effective date (that would count towards their FFCRA paid sick leave entitlement), and whether the law will have retroactive effect. The DOL attempted to address these issues by stating:

Can my employer deny me paid sick leave if my employer gave me paid leave for a reason identified in the Emergency Paid Sick Leave Act prior to the Act going into effect?

No. The Emergency Paid Sick Leave Act imposes a new leave requirement on employers that is effective beginning on April 1, 2020.

Are the paid sick leave and expanded family and medical leave requirements retroactive?

No.

Does Emergency Paid Sick Leave And Emergency FMLA Run Concurrently For Leave Related To School Closures?

The qualifying reason for leave under the Emergency FMLA involves caring for a child when their school or place of care is closed. One of the six qualifying reasons for Emergency Paid Sick Leave similarly addresses this same reason. Therefore, many employers have inquired as to whether these leaves will run concurrently when taken for the same qualifying reason. The DOL addressed this issue when it stated:

If I am home with my child because his or her school or place of care is closed, or child care provider is unavailable, do I get paid sick leave, expanded family and medical leave, or both—how do they interact?

You may be eligible for both types of leave, but only for a total of twelve weeks of paid leave. You may take both paid sick leave and expanded family and medical leave to care for your child whose school or place of care is closed, or child care provider is unavailable, due to COVID-19 related reasons. The Emergency Paid Sick Leave Act provides for an initial two weeks of paid leave. This period thus covers the first ten workdays of expanded family and medical leave, which are otherwise unpaid under the Emergency and Family Medical Leave Expansion Act unless the you elect to use existing vacation, personal, or medical or sick leave under your employer’s policy. After the first ten workdays have elapsed, you will receive 2/3 of your regular rate of pay for the hours you would have been scheduled to work in the subsequent ten weeks under the Emergency and Family Medical Leave Expansion Act.

Next Steps

Employers should note that this is an initial and informal compliance assistance document from DOL. These answers may change or be added to over time. Moreover, the DOL will be developing more formal guidance and regulations that may definitively answer these questions and may do so in a different manner. Nevertheless, this preliminary “Questions and Answers” document may give some indication about how the agency is likely to formally interpret and enforce the new law in the near future.

We will continue to monitor the rapidly developing COVID-19 situation and provide updates as appropriate. 

Stay At Home Orders & FFCRA Update

- Posted at 10:00 AM Tagged: , , , , , , ,
Many counties are issuing “stay at home” orders where only businesses deemed as “essential” can continue remain open. These lists of “essential” businesses are not uniform from county to county so you will need to check your county’s Emergency Executive Order to determine if your business would qualify as “essential” or not. We have a copy of the Orange County, Florida Executive Order that was signed yesterday (3/24/2020) and will continue to obtain copies from other counties as those are signed/passed.

If your business is deemed as “essential”, we also have sample letters you can provide to employees to use for travel. Please let us know if you need copies of these samples for use.

If your business qualifies as “essential”, push the fact that you are staying open as a positive. Make sure each employee understands that you are trying to keep them working and getting paid as long as you can so they can take care of their families. Under the Families First Coronavirus Response Act (FFCRA), the paid leave does not take effect until April 1st so anyone not working prior to 4/1 will not be eligible for payments under the FFCRA. 

Attached is an update to the presentation we sent out last week when the FFCRA was first passed with changes included.  You can access the updated presentation   here.

You may have heard the Senate stuck a deal late last night on an additional relief bill, but it still has not yet passed the House. More details on the provisions of this bill will be forthcoming once it is signed into law by the President.

What Employers Need to Know About the Families First Coronavirus Response Act

March 19 - Posted at 2:14 PM Tagged: , , , , , , , ,

The afternoon of March 18, 2020, the Senate passed H.R. 6201, the Families First Coronavirus Response Act. Division C of the Bill details the Emergency Family and Medical Leave Expansion Act, and Division E provides additional protections under the Emergency Paid Sick Leave Act. Both divisions apply to employers with fewer than 500 employees.

At a high level, these laws work together so that, under the Emergency Paid Sick Leave Act, qualifying employees will receive 80 hours of paid leave for immediate use, then they will received paid leave at two-thirds of the employee’s wages for the duration of a COVID-19 related Family and Medical Leave Act leave.

Key provisions of both laws are described below.

Emergency Family and Medical Leave Expansion Act (Effective 15 days after enactment)

This statute provides for additional benefits under the FMLA so that eligible employees will receive job protection and a paid component for certain COVID-19-related absences.

Which employers are covered? 

Employers with fewer than 500 employees are subject to the expansion. Part-time employees are included in this count to assess coverage.

The Secretary of Labor has authority “for good cause” to exempt (1) certain healthcare providers and emergency responders; and (2) small employers with fewer than 50 employees where the added expense would jeopardize the business. Under certain circumstances, the requirement to restore employees to their employment will not apply to businesses with fewer than 25 employees.

Additionally, an employer of employees who are healthcare providers or emergency responders may exclude these employees.

As a practical matter, larger employers that break up their workforce across smaller employing entities should review the respective employee populations for each entity to determine whether the expansion will apply to that population. In making this decision, consider what company is listed as the employer on an employee’s pay statement or review each Employer Identification Number separately.

Which employees are eligible?

Employees who have been employed for at least 30 calendar days will qualify for leave. Notably, the other FMLA employee eligibility requirements (e.g., hours worked) do not apply here.

Employers appear to have the discretion to exclude healthcare providers and emergency responders, though this language of the statute is in tension with the delegation of rulemaking authority to the Secretary of Labor to determine such exemptions.

What events will trigger coverage?

Employees who are unable to telework may use this leave if they must care for a child following the closure of a school or daycare, or other unavailability of childcare due to the coronavirus.

How does paid leave apply?

The first ten (10) days of FMLA leave may be unpaid (but see the Emergency Paid Sick Leave Act provisions, below).  Employees may elect to use their accrued vacation, personal or sick leave to cover this window, but employers may not require it. After this initial period, the employer will be required to pay at least two-thirds of an employee’s regular wages, according to their normally scheduled hours.

Payment is capped at $200 per day and $10,000 total for the duration of the leave.

The statute provides a formula for calculating payments for employees with varying or irregular schedules.

The expansion allows for up to twelve (12) weeks of coverage for all eligible employees in addition to the initial 10-day supplement provided by the Act.

Emergency Paid Sick Leave Act (Effective 15 days after enactment)

This statute provides for immediate use of up to 80 hours of paid leave for eligible employees, in addition to any other leave policies afforded by the employer.

Which employers are covered?

Employers with fewer than 500 employees are subject to the statute.  Part-time employees are included in this count to assess coverage.

The Secretary of Labor has authority to exempt (1) certain healthcare providers and emergency responders; (2) small employers with fewer than 50 employees where the added expense would jeopardize the business.  Under certain circumstances, the requirement to restore employees to their employment will not apply to businesses with fewer than 25 employees.

Which employees are eligible?

All employees, full and part-time, are covered. Unlike the FMLA expansion, there is no tenure requirement.

However, an employer of employees who are healthcare providers or emergency responders may exclude these employees. Employers appear to have the discretion to exclude health care providers and emergency responders, though this language of the statute is in tension with the delegation of rulemaking authority to the Secretary of Labor to determine such exemptions.

When can employees take leave?

Immediately.  There is no accrual or waiting period.

What events will trigger coverage?

Employees who are unable to telework may use this leave for COVID-19 related medical leave, including self-isolation due to a positive COVID-19 diagnosis; obtaining a medical diagnosis or care if the employee is experiencing coronavirus symptoms; complying with a recommendation or order of a public health official or healthcare provider; caring for a family member who is self-isolating because of a positive diagnosis or experiencing coronavirus symptoms; or is experiencing any other “substantially similar condition” specified by the Secretary of Health and Human Services in consultation with the Secretary of Treasury and the Secretary of Labor.

As with the FMLA component above, coverage will also be triggered where an employee must care for a child following the closure of a school or daycare, or other unavailability of childcare due to the coronavirus.

How does paid leave apply?  

Full-time employees are entitled to 80 hours of paid leave. For part-time employees, employers should use the employee’s average weekly hours over a two-week period. State and local minimum wage rates are automatically adopted for calculating payments if they are higher than the employee’s effective hourly rate.

Payment is capped at $511 per day or $5111 in the aggregate if the employee is home due to any qualifying reason listed above other than school closure or care for an ill family member under specific circumstances. Payment is capped at $200 per day or $2000 in the aggregate if the employee is home caring for a family member with the virus or due to a child’s school closure.

How does the statute interact with state and local law?

This leave is to be given in addition to any required paid leave provided by state or local law.

Does this paid leave ever expire?

Yes. Leave will automatically expire on December 31, 2020 and cannot be carried over into the following calendar year.

What happens if an employer violates the Act?

Failure to pay sick leave will be treated as a minimum wage violation under the Fair Labor Standards Act (FLSA). Remedies for a private cause of action include unpaid wages, liquidated damages (double damages), attorneys’ fees and costs. Employers should be conscious of the heightened risk for a collective action for failure to comply, as well as the potential for personal liability for owners, corporate officers, and other supervisors provided by the FLSA.

Discrimination or retaliation against employees who take leave under the Act or file a complaint relating to the Act is also prohibited. Employers contemplating cost saving measures, including a reduction in force, layoff, or hours reduction, against employees availing themselves to this benefit are strongly encouraged to seek legal counsel to assess risk.

How do employers alert their employees of the Act?

Within seven days from enactment, the Secretary of Labor will provide a model notice to be posted in areas that are readily accessible to employees (e.g., kitchens and breakrooms). We anticipate direct notice might also be required in the form of an email or letter.

Refundable Payroll Tax Credits for Paid Leave (Effective 15 days after enactment)

The statute also provides for refundable payroll tax credits through 2020 for employers that provide paid leave in accordance with either the Emergency Family and Medical Leave Expansion Act or the Emergency Paid Sick Leave Act.

How is the tax credit determined?

Section 7001 of the act provides a tax credit for the cost of paid leave provided under the Emergency Paid Sick Leave Act. Section 7003 of the act provides a similar tax credit for the cost of paid leave provided under the Emergency Family and Medical Leave Expansion Act.

Both credits are applied against section 3111(a) or 3221(a) of the Internal Revenue Code, which imposes the employer portion of Social Security and Medicare (FICA) taxes.  Accordingly, even employers that do not pay income tax may benefit from the credit.  The credits are refundable to the employer.

Section 7001 permits a tax credit for up to 10 days of paid leave per employee under the Emergency Paid Sick Leave Act in the amount of up to (a) $511 per day for amounts paid to employees who must self-isolate, obtain a diagnosis, or comply with medical advice regarding a COVID-19 diagnosis, or (b) up to $200 per day for employees on paid leave due to caring for a family member or for a child due to school closures or unavailability of care.  In addition, employers may obtain a credit for “qualified health plan expenses” that are allocable to providing qualified paid sick leave determined above.

Section 7003 provides a similar tax credit for paid leave under the Emergency Family and Medical Leave Expansion Act, but that credit is limited to $200 per day and an aggregate of $10,000.  A credit is also available for the cost of providing qualified health plan expenses allocable to providing the qualified family leave determined above.

Similar refundable tax credits are available for self-employed workers.

When does the tax credit apply?

The tax credit applies only to paid wages beginning on the effective date of the law (15 days after its enactment), and will expire on December 31, 2020. The Internal Revenue Service (IRS) is expressly empowered to issue additional guidance implementing these changes, and the bill includes additional funding reserved to the IRS for this purpose.

*****

As with any new legislation, the Act will result in a lot of unanswered questions regarding implementation.  We will continue to make available guidance as it becomes available. 

Families First Coronavirus Response Act Update

- Posted at 9:00 AM Tagged: , ,
The President signed into law the Families First Coronavirus Respose Act late on March 18th. 
 
Attached is a summary of the 2 paid leave acts that will apply to employers once it officially takes effect no later than April 2nd.
You can access a summary recap of the acts  here. 

Emergency Paid Leave Act Update

March 18 - Posted at 9:17 PM Tagged: , , , ,
Late this afternoon, the Senate passed its version of the paid leave bill that has been in the forefront of discussions this week. It does not appear that the text of the Senate’s version of the bill is available yet online, but we will make available a recap of  its contents once it is available. 
 
The President must still sign any bill passed by Congress BEFORE it will become law, although it is expected that the President could sign the bill as early as tonight and probably no later than tomorrow (Thursday) morning. Once he signs the bill, it will still be 15 days before it become effective.

Congress Makes Significant Changes to Proposed FMLA and Sick Leave Requirements in COVID-19 Bill

March 17 - Posted at 12:58 PM Tagged: , , ,

On March 16, 2020, the U.S. House of Representatives unveiled legislation revisiting the sweeping COVID-19 response bill it passed only days earlier.  While listed as “corrections” to the prior legislation, this new bill dramatically changes a number of provisions it had previously adopted.

It is stressed that this bill—like the prior iteration of H.R. 6201—is but one step in the process.  The U.S. Senate is preparing to debate its own legislation responding to COVID-19. What the House and Senate ultimately pass separately must be reconciled before a single bill can be approved and sent to the president for his signature. 

By way of brief background, the House originally approved sweeping legislation to address COVID-19, including several proposals relating to employer-mandated paid sick leave, as well as expansion of the federal Family and Medical Leave Act (FMLA).  Specifically, that bill required private employers with 500 or fewer employees, and most public-sector employers, to provide extended “emergency” FMLA leave for a variety of COVID-19-related contingencies.  It further adopted an emergency paid sick leave requirement for these same employers, while providing refundable tax credit relief for emergency FMLA and sick leave.  Although the bill was adopted on a bipartisan basis, it immediately drew concern from many quarters, particularly small businesses facing a dramatic downturn in business relating to the current public health emergency, and the real-time economic impact these new requirements would have on these employers. 

The new legislation released by the House generally narrows and targets these relief programs, and attempts to harmonize their interaction. This revised bill now provides as follows:

Emergency Family and Medical Leave Act

The revised bill provides that private-sector employers with fewer than 500 employees, and covered public-sector employers, must provide up to 12 weeks of job-protected FMLA leave for “a qualifying need related to a public health emergency” to employees who have been on the payroll for 30 calendar days.  This “qualifying need” is limited to circumstances where an employee is unable to work (or telework) due to a need 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.  This is a dramatic scaling back from the prior iteration of the bill, which would have provided extended FMLA for a far broader range of COVID-19-related reasons.

As with the prior bill, the first segment days of emergency FMLA leave (which has been reduced from 14 days to 10 days in the revised bill) can be unpaid.  An employee can opt to substitute accrued vacation, personal, or sick leave, but an employer may not require an employee to do so.

The remainder of FMLA leave is required to be paid, generally at two-thirds of the employee’s regular rate, for the number of hours the employee would otherwise be scheduled to work.  Unlike the prior bill, the revised bill limits the amount of required pay for leave to no more than $200 per day and $10,000 in the aggregate. 

Emergency FMLA leave taken is generally job-protected, meaning the employer must restore employees to their prior positions (or an equivalent) upon the expiration of their need for leave.  As in the prior version, the bill includes an exception to this requirement for employers with fewer than 25 employees, if the employee’s position no longer exists following leave due to operational changes occasioned by a public health emergency (e.g., a dramatic downturn in business caused by the COVID-19 pandemic), subject to certain conditions.

The revised bill retains language allowing the Secretary of Labor to exclude health care providers and emergency responders from the definition of employees who are allowed to take such leave, and to exempt small businesses (defined as those with fewer than 50 employees) if the required leave would jeopardize the viability of their business.

Further, the bill appears to exclude employers with fewer than 50 employees in a 75-mile radius from civil FMLA damages in an employee-initiated lawsuit.  Finally, the bill expressly provides that employers may exclude employees who are health care providers or emergency responders from this emergency FMLA entitlement. 

The bill would take effect 15 days after enactment, and sunset on December 31, 2020.

Emergency Paid Sick Leave

The bill requires private employers with fewer than 500 employees, and covered public employers, to provide paid sick time to an employee who is unable to work or telework because: (1) the employee is subject to a federal, state, or local quarantine or isolation order related to COVID-19; (2) the employee has been advised by a health care provider to self-quarantine because of COVID-19; (3) the employee is experiencing symptoms of COVID-19 and is seeking a medical diagnosis; (4) the employee is caring for an individual subject or advised to quarantine or isolation; (5) the employee is caring for a son or daughter whose school or place of care is closed, or child care provider is unavailable, due to COVID-19 precautions; or (6) 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.

An employer may exclude employees who are health care providers or emergency responders from this coverage. The bill also grants the Secretary of Labor the authority to issue regulations to: (a) exclude certain health care providers and emergency responders from the definition of employee by, among other things, allowing them to opt out; (b) exempt small businesses with fewer than 50 employees from these requirements if they jeopardize the viability of a business as a going concern; and (c) ensure consistency between the paid family and paid sick standards and tax credits.

In general, an employee is entitled to 80 hours of paid sick time (pro-rated for part-time employees).  Unlike the 30-day payroll requirement, employees are immediately eligible for this leave. 

The bill limits an employer’s requirement of paid leave to $511 per day ($5,110 in the aggregate) where leave is taken for reasons (1), (2), and (3) noted above (generally, an employee’s own illness or quarantine); and $200 per day ($2,000 in the aggregate) where leave is taken for reasons (4), (5), or (6) (care for others or school closures).

The bill includes a prohibition on retaliating against any employee who takes leave in accordance with the new law.  The bill further provides that the failure to pay required sick leave will be treated as a failure to pay minimum wages in violation of the Fair Labor Standards Act.

The bill would become effective 15 days after its enactment, and sunset on December 31, 2020.

Tax Credits and Other Efforts

The bill includes refundable tax credits for employers that are required to offer Emergency FMLA or paid sick leave, including self-employed individuals.  Note that these credits are only available to those employers that are required to offer these benefits under the new law, and these new credits are not generally extended to employers not subject to the new mandates under the bill.

In addition, the Department of Treasury is reported to be exploring means within its administrative powers to allow small businesses the liquidity and cash flow they need to maintain operations.

Finally, it seems likely that Congress will next turn its attention to broader economic relief measures.  Many have suggested a reduction or suspension in the payroll tax.  Others are calling for targeted relief for specific industries (travel, lodging, restaurants, retail), which have been rapidly and dramatically impacted by the pandemic.

Going Forward

The bill still leaves many questions unanswered.  For example, the bill does not define “full time” employment.  Similarly, it does not state explicitly how employers will be expected to calculate the number of their employees for purposes of the fewer-than-500 cap.  Both the existing FMLA and FLSA include provisions relating to the aggregation of employees where there is common control or an integrated enterprise.  Absent congressional change, it is likely courts and agencies will apply these tests for purposes of the emergency leave expansion thresholds.

More broadly, and as noted above, the landscape changes daily as Congress considers (and now, potentially reconsiders) legislative and policy responses to this unprecedented public health emergency.  

House Passes COVID-19 Coronavirus Law: Prepare For Paid Sick Leave

March 16 - Posted at 10:22 AM Tagged: , , , , , ,

In an effort to boost the government’s response to the COVID-19 coronavirus outbreak, the U.S. House of Representatives passed the Families First Coronavirus Response Act yesterday, an economic stimulus plan aimed at addressing the impact of COVID-19 on Americans. It includes many provisions which apply to employers, such as paid sick leave for employees impacted by COVID-19 and those serving as caregivers for individuals with COVID-19. 

The Act (H.R. 6201), which passed on a bipartisan 363-40 vote, will be presented to the Senate on Monday afternoon and is expected to pass the Senate with few revisions. President Trump has publicly supported the bill, and it will likely be signed into law late Monday, March 16, or Tuesday, March 17.

While the Act also contains several provisions to increase funding for familiar benefit programs, like WIC and SNAP, this post summarizes the key benefit provisions of the Act which affect employers. Please note the Act has not yet been finalized and the enacted law may vary from the below summary.

Paid And Unpaid Leave For Coronavirus-Related Reasons

There are three provisions relating to employees being forced to miss work because of the COVID-19 outbreak: an emergency expansion of the Family Medical Leave Act (FMLA), a new federal paid sick leave law, and expanded unemployment insurance benefits.

Emergency Family And Medical Leave Expansion Act

  • Expanded Coverage And Eligibility – The Act significantly aims to amend and expand the FMLA on a temporary basis. The current employee threshold for coverage would be changed from only covering employers with 50 or more to employers covering any workplace with fewer than 500 employees. It also lowers the eligibility requirement such that an employee who has worked for the employer for at least 30 days prior to the designated leave is eligible to receive paid family and medical leave. This means that thousands of employers not previously subject to the FMLA must provide job-protected leave to employees for a COVID-19 coronavirus-designated reason.
  • Reasons For Emergency Leave – Specifically, any individual employed by the employer for at least 30 days (before the first day of leave) may take up to 12 weeks of paid, job-protected leave to allow the employee to (1) comply with a requirement or recommendation to quarantine due to exposure to, or symptoms of, coronavirus; (2) to care for an at-risk family member who is adhering to requirement or recommendation to quarantine due to exposure to, or symptoms of, coronavirus; or to (3) to care for the employee’s child if the child’s school or place of care (including if the childcare provider is unavailable) has been closed due to a public emergency.
  • Paid Leave – The first 14 days of Emergency FMLA may be unpaid, but an employee may elect to substitute any accrued paid time off, including vacation or sick leave, to cover some or all of the 14-day unpaid period. After the 14-day period, the employer must pay full-time employees at two-thirds the employee’s regular rate for the number of hours the employee would otherwise be normally scheduled. Employees who work a part-time or irregular schedule are entitled to be paid based on the average number of hours the employee worked for the six months prior to taking Emergency FMLA. Employees who have worked for less than six months prior to leave are entitled to the average number of hours the employee would normally be scheduled to work. Employers with bargaining unit employees would apply the Emergency FMLA provisions consistent with the bargaining agreement.
  • Expanded Definitions – The Act also expands the definition of who is eligible as a “parent’ under FMLA, which includes a parent-in-law of the employee, a parent of a domestic partner of the employee, and a legal guardian or other person who served as the employee’s parent (also know as in loco parentis) when the employee was a child.
  • Small Business And Other Exemptions – The bill also gives the Secretary of Labor the authority to issue regulations to exempt some small business with fewer than 50 employees (when the imposition of such requirements would jeopardize the viability of the business as a going concern), and to exclude certain healthcare providers and emergency responders from the list of those employees eligible for leave.
  • Effective Date And Expiration – This program will become effective within 15 days of enactment and remain in effect until December 31, 2020.

Emergency Paid Sick Leave Act

This provision requires employers with fewer than 500 employees to provide employees (regardless of the employee’s duration of employment prior to leave) with 80 hours of paid sick leave at the employee’s regular rate (or two-thirds the employee’s regular rate to care for a child whose school or daycare has closed due to coronavirus, or to care for a family member who is self-isolating due to a coronavirus diagnosis, who is exhibiting symptoms and needs to obtain medical care, or who is complying with a requirement or recommendation to quarantine).

  • Reasons For Paid Sick Leave – This portion of the new law would allow the employee to (1) comply with a requirement or recommendation to quarantine due to exposure to, or symptoms of, coronavirus; (2) self-isolate because the employee is diagnosed with coronavirus; (3) obtain a diagnosis or care because the employee is exhibiting symptoms; (4) to care for or assist an at-risk family member who is self-isolating due to a diagnosis, who is exhibiting symptoms of coronavirus and needs to obtain medical care, or who is adhering to requirement or recommendation to quarantine due to a exposure to, or symptoms of, coronavirus; or (5) to take care of the employee’s child if the child’s school or place of care has been closed due to the COVID-19 coronavirus (including if the childcare provider is unavailable).
  • Carryover – This paid sick leave will not carry over to the following year and is in addition to any paid sick leave currently provided by employers.
  • Calculating Rate Of Pay – Employees who work a part-time or irregular schedule are entitled to be paid based on the average number of hours the employee worked for the six months prior to taking paid sick leave. Employees who have worked for less than six months prior to leave are entitled to the average number of hours the employee would normally be scheduled to work. A business employing fewer than 500 employees is required, at the request of the employee, to pay the employee for 14 days of mandated emergency paid leave instead of the initial 14 days of unpaid leave required by the Emergency Family and Medical Leave Expansion Act (summarized above).

An employer may not change its current paid leave policy after enactment to avoid the obligations of the additional leave mandated by the Emergency Paid Sick Leave Act. This program will be administered by the Social Security Administration over the next year until these requirements expire on December 31, 2020.

Emergency Unemployment Insurance Stabilization And Access Act Of 2020

This section provides $1 billion in 2020 for emergency grants to states for activities related to unemployment insurance benefit processing and payment, under certain conditions.

Half of the resources are to be allocated to provide immediate funding to all states for administrative costs so long as they meet some basic requirements, including: (1) requiring employers to provide notification of the availability of unemployment compensation at the time of separation; (2) ensuring applications for unemployment compensation and assistance with the application process are accessible in at least two ways (in-person, by phone, or online); and (3) notifying applicants when their application is received and being processed, as well as providing information about how to ensure successful processing if the application cannot be processed. 

The other half would be reserved for emergency grants to states which experience an increase of unemployment compensation claims of at least 10% in comparison to the same quarter in the prior calendar year. Those states would be eligible to receive an additional grant to assist with costs related to such an unemployment spike if they meet additional requirements, including: (1) expressing of commitment to maintain and strengthen access to unemployment compensation; and (2) taking or planning to take steps to ease eligibility requirements and access (like waiving work search requirements and the waiting period). This provision will remain in effect until December 31, 2020.

Tax Credits For Paid Sick And Paid Family And Medical Leave

 This section provides a series of refundable tax credits for employers who are required to provide the Emergency Paid Sick Leave and Emergency Paid Family and Medical Leave described above. These tax credits are allowed against the tax imposed by Internal Revenue Code Section 3111(a), which deals with the employer portion of Social Security taxes. While this limits application of the tax credit, employers will be reimbursed if their costs for qualified sick leave or qualified family leave wages exceed the taxes they would owe.

Specifically, employers are entitled to a refundable tax credit equal to 100% of the qualified sick leave wages paid by employers for each calendar quarter in adherence with the Emergency Paid Sick Leave Act. The qualified sick leave wages are capped at $511 per day ($200 per day if the leave is for caring for a family member or child) for up to 10 days per employee in each calendar quarter. 

Similarly, employers are entitled to a refundable tax credit equal to 100% of the qualified family leave wages paid by employers for each calendar quarter in accordance with the Emergency Family and Medical Leave Expansion Act. The qualified family leave wages are capped at $200 per day for each individual up to $10,000 total per calendar quarter.

Coverage For Testing For COVID-19

This section requires private health plans to provide coverage for COVID-19 diagnostic testing, including the cost of a provider, urgent care center and emergency room visits in order to receive testing. Coverage must be provided at no cost to the employee and any others covered under the employee’s health plan.

Next Steps

As mentioned above, the Senate is expected to pass the legislation on Monday, and the President is expected to sign it shortly thereafter. There may be changes made by the Senate before the legislation is finalized, and there may be follow-up “clean-up” legislation. In addition, many states are proposing similar emergency legislation to enact or expand their own paid sick leave or family and medical leave laws to cover coronavirus-related issues. Some of these state laws may be in addition to any new requirements at the federal level.  

We will continue to monitor this rapidly developing situation and provide updates as appropriate.

The New Plus-One: Babies In The Workplace

March 12 - Posted at 9:00 AM Tagged: , , , , , , , ,

You may have heard of “Bring Your Child to Work Day,” but have you ever heard of “Bring Your Baby to Work Every Day”? Many of you likely just scoffed at the idea. Simply put, a baby cannot be an employee so therefore they have no place at work, right? General workplace norms have held fast to that belief, causing working parents to make difficult decisions with limited choices about returning to their jobs and caregiving once their child is born.  Consequently, employers and businesses often experience vital changes to their workforce in the form of staffing, productivity, costs, efficiency, and reliability.

But some employers are challenging the norm and finding a creative solution to the age-old dilemma through implementation of “infant at work” policies. Employers participating in this increasingly popular option make work and parenting synonymous concepts by providing an inclusive, supportive environment that reaps holistic benefits for employees and their families, employers, and businesses.

Baby On Board – At The Office

From a statistical standpoint, there are some reasons why infant-at-work policies are making sense for employers and employees alike. According to the U.S. Bureau of Statistics, nearly 40% of families (including single parents) in America have children under age 18. Meanwhile, both parents are employed in 63% of two-parent families.

Without the safety net of an infant-at-work policy, employers are missing out on a large subset of workers. In 2018, women represented approximately 46.9% of the total workforce nationwide, but approximately one-third of mothers do not return to work after having a baby, due in part to the expense of childcare.

A good example can be found in California. The state is ranked 11th as the most expensive childcare in the nation, with the average cost of child care estimated at $11,817 per year or $985 per month. For a typical family in California, child care costs would eat up 25% of their annual income. Childcare costs are highest for infants than any other age. 

Overall, these statistics demonstrate that working families face a challenging choice between returning to work and placing the child in daycare or staying home until the child is older. Whereas one requires significant time away from the infant and a sizable portion of household income, the other is often financially infeasible.

When The Pros Outweigh The Cons

The alternative option is bringing an infant to work, which has numerous benefits that often dispel any perceived disadvantages. Some of the obvious concerns include disruption to the work environment, added stress to the parent-employee who is trying to perform while managing a child, failure to complete work, distraction, and liability concerns. 

Surprisingly, employers with infant-at-work policies have found that disruption is minimal because the responsive parent can easily soothe the infant’s needs. Infants are happier and calmer than anticipated because of the constant physical proximity to the parent. Physical proximity also allows mothers to easily breastfeed, which results in greater protection against certain cancers in the mother, as well as optimal growth and development and decreased risk of illness for the infant. 

Additionally, parents invest in doing their jobs well because they simultaneously spend time with the infant, earn a paycheck, and are physically present in their career without thinking about getting home to the infant or picking the infant up from daycare. In turn, the parent in fact works more, increases productivity, and decreases sick time. After the initial novelty wears off, babies become a fixture rather than a distraction. Other employees may also bond with the infant and provide support when the parent is occupied with work tasks. Lastly, liability concerns can be addressed through waivers assuring employers that the employee cannot hold the company responsible for accidents that might occur at the office. 

As a result of the benefits to the parent and infant, employers and businesses can experience the following: earlier return to work dates for parent-employees; increased retention, especially of women in the workplace; reduced costs associated with hiring new employees; improved productivity; reduced healthcare costs as the infant and parent are healthier; increased community focus in the workplace between infant, parent, and coworkers; and improved public perception as a family-friendly business.  

Policy And Practice

When welcoming babies into the workplace, an infant-at-work policy that has a clear structure, sets employer expectations, and provides for flexibility will facilitate maximum benefits. You should first consider eligibility requirements by determining which new parents can take advantage of the policy (full-time or part-time employees, or both). You should also determine when employees will no longer be able to bring their infant to work: once the child is a certain number of months old, or begins to crawl, or whichever comes first. 

Second, in the event the parent-employee is occupied with a work task, you may require the parent to select two other employees to provide back-up care for the infant. These are workers not simultaneously participating in the program who consent to serve as an alternate care provider. Third, consider preparing individualized plans specifying what days the child will be in the office. Fourth, determine whether there will be a trial period before the program becomes permanent for each employee. While the program may appear workable in the abstract, it may not be suitable once the infant and parent are in the workplace.

You should also consider a termination procedure detailing when the program will end, either when the infant reaches the eligibility limit or when a termination decision is made following a complaint process that suggests discontinuation of the individual infant and parent in the program is the appropriate course of action. You may specify the factors it will take into consideration in reaching a termination decision, such as decline in performance and interference with business operations, and may also include a notice period before termination of the program. 

Infant-at-work policies can fit seamlessly with policies that many employers should already have in place, including lactation accommodation requirements that require you to provide for breastfeeding facilities with specific amenities. Additionally, lawsuits involving family responsibility discrimination or parental status discrimination – which is employment discrimination because of an employee’s caregiver obligations – are increasingly common.  While parental status is not a protected basis under federal law or most state laws, it is often alleged as the basis for sex, gender, marital status, or childbirth discrimination, and is prohibited by the Equal Employment Opportunity Commission. 

Consider a female employee who has to leave work by 4:00 p.m. every day to pick her child up from day care, is not promoted as a result, and files a sex discrimination claim. An employer with an infant-at-work policy could reduce the likelihood of such a claim by permitting the employee to bring her baby to work thereby extending her workday.

Nobody Puts Baby In A Corner…But Maybe A Cubicle Will Work

Community and family values are easily gained by employers who assist employees in balancing their careers and parenting. Infant-at-work policies can be implemented with minimal investment as long as there are clear rules and expectations.

Of course, each baby, parent, and business is different. Employers that embrace this modern idea should heed traditional practices of oversight and flexibility to ensure that the policy evolves to fit its unique needs. Regardless of the business, utilizing this low-cost option creates a more positive, productive culture, as well as marrying career and family interests where the two were once mutually exclusive.  

The 4-Day Workweek: Helpful Innovation Or Expensive Risk?

March 09 - Posted at 9:00 AM Tagged: , , , , , , , ,

In 2016, Millennials surpassed Generation X as the largest generation in the American workforce. Given their reputation as the driving force behind workplace change – from the birth of the #MeToo movement to the expansion of technology – it isn’t surprising to learn that there is gathering momentum for another significant change spurred by this generation of workers: the implementation of a four-day workweek.

Just as the identity of the workforce has changed, so has the type of work that Americans are performing. Technology has made it easier for employees to seek non-conventional employment. Tools like video conferencing, productivity software, and artificial intelligence are changing how we work and what we do while we are at work.

Put simply, technology has made it possible to take office work out of the office. According to a recent survey, telecommuting is offered by over 40% of organizations and some form of flexible scheduling is offered by 57%. With the face and tools of the workplace evolving, employers are being challenged to reevaluate other traditional elements of work.

One of these being the length of the workweek. 

Potential Benefits Of A 4-Day Workweek

The four-day workweek typically exists in two variations, either the 4-10 workweek, which redistributes the 40-hour workweek over four days, or the 4-8 workweek, which simply cuts a day and makes the workweek 32 hours. Those who have implemented one of these types of schedules primarily cite one of these four reasons to support their decision:

Retention

The four-day workweek may help to address one of the major problems that modern employers face: employee turnover. A recent Gallup Report estimated that Millennial turnover costs the U.S. economy $30.5 billion annually. According to that same report, Millennials rank work-life-balance high on their list of priorities when considering employment options. Because of this, an alternate schedule which allows one additional non-work day a week may be attractive to your workers.

Perpetual Guardian, a New Zealand-based financial services company, reinvigorated the four-day workweek debate when its CEO announced that the company was moving to a four-day, 30-hour workweek. Guardian made the decision to permanently alter employees’ schedules after test results demonstrated that employees were performing the same amount of work in the shortened week and reported significant improvements in work-life-balance.

Similarly, last year in Colorado, Adams County became the first school district in a major metropolitan area to institute a four-day workweek. The change was made to attract and retain teachers to the school district. And it worked. The district, which compensates teachers at the lowest rate of any district in the Denver area, experienced increased applicants and lower staff turnover during the pilot year of the program.

Productivity

Some case studies suggest that instituting a four-day workweek can boost employee productivity. In Japan, Microsoft reported that implementing a four-day workweek led to a 40% boost in productivity compared to the previous year. Notably, Microsoft Japan’s model included other modifications to the workplace, including limiting meetings to 30 minutes and encouraging online discussions instead of face-to-face encounters with coworkers.

Operational Costs

One positive byproduct of the four-day workweek is that employers save on operational costs. One less day of work is one less day the lights are on at the office. Microsoft Japan saw a 23% reduction in electricity consumption and a 59% reduction in paper printing after implementing a four-day workweek.

Climate Solution

Finally, Andrew Barnes, the CEO of Perpetual Guardian, advocates for the four-day workweek as a step employers can take to combat climate change. According to the University of California the two largest contributors to greenhouse gas emissions in the U.S. are transportation (29%) and electricity production (28%). Theoretically, both emissions are reduced when employers cut the workweek by a day.

The 4-Day Workweek Is A Gamble – And Maybe An Expensive One

For all the potential benefits of the four-day workweek, there are associated costs that must be taken into account before implementation.

Unpredictable Outcomes

In 2011, the Utah state legislature scrapped the four-day workweek for all non-emergency state workers after a three-year test run. The decision was made to return employees to a five-day workweek after reports concluded that the expected benefits of the program, including reduced operational costs and increased employee productivity, never materialized.

Conflicting Or Rigid Compensation Laws

States often have rigid compensation rules which could affect the pay scale of employees on a four-day workweek schedule. This is especially true for employers considering a 4-10 workweek. For example, in California, with some limited exceptions, employees receive overtime compensation for shifts over eight hours long. This has obvious implications for the 4-10 workweek. Employees working the same total hours a week would be entitled to more compensation under a 4-10 schedule because they would be entitled to two hours of overtime compensation per day.

California has established a mechanism for employers to institute a 4-10 workweek without paying overtime wages. However, the process involves proposing the modified schedule to all affected employees and holding a secret ballot election to approve the modification. Failure to correctly follow this procedure before instituting a 4-10 workweek could lead to considerable wage and hour exposure for the employer.

Conclusion

At this point only one thing is certain about the four-day workweek is that it’s a gamble. While employers utilizing the four-day workweek will almost certainly attract job-hopping Millennials, there is no guarantee that it will increase productivity or reduce operational costs. One of the inherent risks of adopting the four-day workweek is that you could spend time and money on a new work schedule that ultimately delivers underwhelming results. And, in the wrong state, incorrect implementation of the 4-10 workweek could expose you to significant wage and hour violations. Employers considering implementing a four-day workweek should consult their employment attorney before making the change.

EEO1 Report Due by March 31, 2020

March 03 - Posted at 8:30 PM Tagged: , ,
If you employed more than 100 people in the preceding calendar year, you are required to complete and submit your EEO1 Report (Survey) by March 31, 2020. You should have also received a reminder letter via mail recently from the EEOC. 

For more information about the EEOC Report 1 or for a direct link to file via the EEOC’s web-based filing system, visit here.
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