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Remote Work in Times of Crisis: 3 Threats to Employee Engagement

March 27 - Posted at 2:08 PM Tagged: , , , , , ,

Did you know that the number of remote workers has grown by 140% since 2005? And with the current COVID-19 situation, even more people are working remote if even temporarily. Now consider this: 80% of employees reported they’d be more loyal if they had more flexible work options, such as working from home. These numbers prove my point: Remote work has tremendous value for both employees and organizations—and it’s here to stay.

But for all its rose-colored benefits, remote work has some pitfalls that can take a toll on employee satisfaction, productivity, collaboration, and engagement. This is especially true amid the current coronavirus pandemic.

Many businesses find themselves in a unique situation. Large workforces, who have traditionally worked full time at physical offices, have now been mandated by HR to work remotely for extended periods of time (some for 2 weeks and others for at least 1 month, possibly longer)—and rightfully so given the current situation. 

This is an opportunity for HR teams to inform, communicate, and nurture their newly remote workers through this new landscape and give them the resources and tools to be as productive, engaged, and collaborative as possible.

Threat #1

Social isolation can breed loneliness. And loneliness can spur disengagement.

Employees crave human contact and interactions. One of the great benefits of going into an office every day is the relationships with colleagues. Office workers sit together for lunch (or go out to restaurants together); they share personal stories about their social experiences, families, and friends; they tell each other jokes; and they even share photos and videos from holidays, social outings, and more.

But when regular and meaningful human interactions are suddenly taken away, it can be hard for employees.

In light of the coronavirus pandemic, many business executives have been asking employees to embrace the practice of “social distancing” right now for the sake of keeping employees safe and healthy.

But that’s inevitably going to lead to feelings of loneliness. This is supported by the findings of Buffer’s 2019 State of Work report, which found that 19% of the surveyed remote workers struggled with loneliness. This can, in turn, take a toll on employees’ mental health and well-being.

Now consider this: According to a meta-analysis coauthored by Julianne Holt-Lunstad, PhD, a professor of psychology and neuroscience at Brigham Young University, loneliness and social isolation are twice as harmful to physical and mental health as obesity.

How to tackle it: 

  • Take several breaks throughout the day so you can be refreshed and re-energized to do great work.
  • Keep the camera turned on when using video conferencing tools.
  • Disconnect (both mentally and digitally) when the workday has ended. That means enabling the “Do Not Disturb” feature on your mobile devices and apps you regularly use like Slack.
  • Don’t be afraid to set up online one-on-one meetings with colleagues just to catch up (without a specific business purpose).
  • Get more personal during one-on-one meetings with teammates. Instead of jumping straight into work-speak, make a concerted effort to spend the first 10 minutes just catching up personally and talking about current events.

Threat #2

Distractions are everywhere, making it hard to stay productive.

In a home setting, the types and number of distractions multiply drastically from those employees might find in office environments. No one is sitting nearby to hold employees accountable. It can be so tempting for employees to watch online videos, scroll through Facebook and Instagram to see what friends are up to, and hop on personal phone calls with friends and family.

A big part of hiring smart people is instilling trust in them to do great work and be responsible for meeting their goals. So instead of panicking about the sudden shift to full-time remote work (or taking on a “Big Brother” mentality/approach to managing them), give employees the necessary technology and digital tools to be as productive as possible. They’ll thank you for it.

How to tackle it:

  • Create a schedule, and stick to it. Accept the meetings that are time-critical and impact-related first. Add in additional meetings as they make sense.
  • Don’t send employees messages or requests outside of regular working hours (even if they are at home). And make sure managers are cognizant of scheduling meeting times that would be inconvenient and cut into their early mornings/evenings. You’d be surprised by how often this actually happens, according to a recent Work-Life Survey.
  • Integrate internal communications tools, like Slack, your employees already use on a daily basis into your scheduling software.
  • Be strategic with time management. Implement time blocking within calendars (to focus on key projects for specified periods of time and avoid wasteful meetings).

Threat #3

Social distancing can cause misunderstandings and breakdowns in communication. 

There’s an art to effective, engaging communication. It’s hard enough to do when your employees are standing (or sitting) face-to-face with colleagues, teammates, customers, partners, and other stakeholders. So as large workforces now set out to work remotely full time for a prolonged period of time, communication will get even trickier.

What will likely ensue are misunderstandings, miscommunication about project expectations/deliverables, and possibly even performance issues. Those can lead to tension and animosity among coworkers, which will inevitably give employees more reasons to avoid, or even cancel, meetings that are necessary to brainstorm, innovate, manage projects, and deliver business results. No business wants these outcomes.

How to tackle it:

  • Enable the video functionality when holding virtual meetings. Facial expressions and body language can say a lot and work wonders to establish personal, human connections with team members, colleagues, and even clients.
  • Be selective in who you invite (and keep group meetings to smaller sizes). Elon Musk has a critical rule for running efficient meetings: If a person isn’t adding value, he or she doesn’t need to be there.
  • Be mindful of other people’s times, and be punctual to scheduled meetings.
  • If you want meetings to run smoothly (and have the desired input and action items), make sure to ask participants the necessary questions ahead of the meeting.

 

Families First Coronavirus Response Act- DOL Poster

March 26 - Posted at 8:55 AM Tagged: , , , ,
The Department of Labor published a Families First Coronavirus Response Act (FFCRA) notice that employers with fewer than 500 employees are required to post.  You can download a copy of the poster here.

When sharing electronically with employees, you may wish to remind them that it does not currently appear that county-required “stay at home” orders qualify as a “quarantine or isolation order”. 

Below we have included the 13 Q&As that were put out by the DOL in relation to the FFCRA poster. 

  1. Where do I post this notice? Since most of my workforce is teleworking, where do I electronically “post” this notice?

    Each covered employer must post a notice of the Families First Coronavirus Response Act (FFCRA) requirements in a conspicuous place on its premises. An employer may satisfy this requirement by emailing or direct mailing this notice to employees, or posting this notice on an employee information internal or external website.

  2. Do I have to post this notice in other languages that my employees speak? Where can I get the notice in other languages?

    You are not required to post this notice in multiple languages, but the Department of Labor (Department) is working to translate it into other languages.

  3. Do I have to share this notice with recently laid-off individuals?

    No, the FFCRA requirements explained on this notice apply only to current employees.

  4. Do I have to share this notice with new job applicants?

    No, the FFRCA requirements apply only to current employees. Employers are under no obligation to provide the notice of those requirements to prospective employees.

  5. Do I have to give notice of the FFCRA requirements to new hires?

    Yes, if you hire a job applicant, you must convey this notice to them, either by email, direct mail, or by posting this notice on the premises or on an employee information internal or external website.

  6. If my state provides greater protections than the FFCRA, do I still have to post this notice?

    Yes, all covered employers must post this notice regardless of whether their state requires greater protections. The employer must comply with both federal and state law.

  7. I am a small business owner. Do I have to post this notice?

    Yes. All employers covered by the paid sick leave and expanded family and medical leave provisions of the FFCRA (i.e., certain public sector employers and private sector employers with fewer than 500 employees) are required to post this notice.

  8. How do I know if I have the most up-to-date notice? Will there be updates to this notice in the future?

    The most recent version of this notice was issued on March 25, 2020. Check the Wage and Hour Division’s website or sign up for Key News Alerts to ensure that you remain current with all notice requirements: www.dol.gov/agencies/whd.

  9. Our employees must report to our main office headquarters each morning and then go off to work at our different worksite locations. Do we have to post this notice at all of our different worksite locations?

    The notice needs to be displayed in a conspicuous place where employees can see it. If they are able to see it at the main office, it is not necessary to display the notice at your different worksite locations.

  10. Do I have to pay for notices?

    No. To obtain notices free of charge, contact the Department’s Wage and Hour Division at 1-866-4-USWAGE (1-866-487-9243). Alternatively, you may download and print the notice yourself from https://www.dol.gov/agencies/whd/posters
     
  11. I am running out of wall space. Can I put the required notices in a binder that I put on the wall?

    No, you cannot put federal notices in a binder. Generally, employers must display federal notices in a conspicuous place where they are easily visible to all employees—the intended audience.

  12. We have break rooms on each floor in our building. Do I have to post notices in each break room on each floor or can I just post them in the lunchroom?

    If all of your employees regularly visit the lunchroom, then you can post all required notices there. If not, then you can post the notices in the break rooms on each floor or in another location where they can easily be seen by employees on each floor.

  13. Our company has many buildings. Our employees report directly to the building where they work, and there is no requirement that they first report to our main office or headquarters prior to commencing work. Do I have to post this notice in each of our buildings?

    Yes. Where an employer has employees reporting directly to work in several different buildings, the employer must post all required federal notices in each building, even if the buildings are located in the same general vicinity (e.g., in an industrial park or on a campus).
Update 3/27/2020- The DOL has issued additional FAQs (which now total 37 Q&A) on how the paid sick leave and expanded FMLA leave under FFCRA will apply. To view the full updated list of FAQ click here. 

FFCRA Poster & Update

- Posted at 8:00 AM Tagged: , , , , , , , , , ,
Two items to bring to your attention today:

1. Latest COVID-19 relief bill was passed by Senate last  night. This bill was passed to help funnel funds into the US economy to assist workers and businesses survive the pandemic. The bill has not yet passed the House or been signed by the President. We are working on a summary of key points and will get those out once it’s though the house.

2. FFCRA Poster- The DOL published a Families First    Coronavirus Response Act notice you are required to post. You can download the poster here. 
 
When sharing electronically with staff, you may wish to remind them that it does not currently appear that county-required “stay at home” requirements qualify as a “quarantine or isolation order”. 
 
 Below we condensed and included some of the questions & answers the DOL provided regarding the posting.  Call us with any questions. 
 
Q. Where do I post this notice? If most of my workforce is teleworking, do I electronically “post” this notice?
 
Each covered employer must post a notice of the Families First Coronavirus Response Act (FFCRA) requirements in a conspicuous place on its premises. An employer may satisfy this requirement by emailing or direct mailing this notice to employees, or posting this notice on an employee information internal or external website.
 
Q. Do I have to post this notice in other languages that my employees speak? Where can I get the notice in other languages?
 
You are not required to post this notice in multiple languages, but the Department of Labor (Department) is working to translate it into other languages.
 
Q. Do I have to share this notice with recently laid-off individuals or new applicants?
 
No, the FFCRA requirements explained on this notice apply only to current employees, including new hires.
 
Q. I am a small business owner. Do I have to post this notice?
 
Yes. All employers covered by the paid sick leave and expanded family and medical leave provisions of the FFCRA (i.e., certain public sector employers and private sector employers with fewer than 500 employees) are required to post this notice.
 
Q. Our employees must report to our main office headquarters each morning and then go off to work at our different worksite locations.  Do we have to post this notice at all of our different worksite locations?
 
The notice needs to be displayed in a conspicuous place where employees can see it. If they are able to see it at the main office, it is not necessary to display the notice at your different worksite locations.

Q. Our company has many buildings. Our employees report directly to the building where they work, and there is no requirement that they first report to our main office prior to commencing work. Do I have to post this notice in each of our buildings?

Yes. Where an employer has employees reporting directly to work in several different buildings, the employer must post all required federal notices in each building, even if the buildings are located in the same general vicinity (e.g., in an industrial park or on a campus).

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. 

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. 

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.

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