Keeping the Doors Open During the COVID-19 Pandemic: What Essential Business Employers Need to Know

Howard K. KurmanPrincipal, Offit│Kurman

Now that Maryland has acted to close external operations of non-essential businesses, those essential businesses that will be able to maintain operations need to consider how they will operate in the current climate.  The COVID-19 pandemic is progressing at a staggering rate, and so are local and federal policies aimed at keeping people safe and the economy afloat. Over the last several days, many businesses have shifted their focus from how to handle sick or potentially sick employees at the office and keep their employees safe to implementing temporary layoffs now that they have been forced to shut their doors. As for essential businesses that will be able to keep their doors open in Maryland for the time being, they will continue to navigate the uncharted waters of emergency policies and procedures aimed at protecting workers amid a national crisis. What should these employers keep in mind as they settle in for the long haul?

Sick Leave and FMLA: Families First Coronavirus Response Act

Emergency Paid Sick Leave

Many employers already offer employees sick leave. However, with the passage of the Families First Coronavirus Response Act (FFCRA), employers with fewer than 500 employees must provide employees with two weeks (80 hours) of additional paid sick leave, paid at the employee’s “regular rate” and capped at $511 per day if they cannot work or telework for several COVID-19 related reasons including quarantine, illness, and suspected illness, and caring for school-aged children.

Employers must provide leave under the FFCRA first before requiring employees to dip into any current sick leave they have accrued under existing paid leave policies. Additionally, employers cannot make changes to their leave policies to circumvent this portion of the Act, i.e. if an employer already offers sick leave, they must continue to do so in addition to the leave provided for by the Act.

Temporary Expansion of Family and Medical Leave Act (FMLA) 

This portion of the Act expands FMLA to apply to private employers with fewer than 500 employees and government employers. Employees who have worked for the employer for at least 30 days will be entitled to take up to 12 weeks of job-protected leave if they cannot work or telework because of a need to care for a child under the age of 18 because the child’s school or place of care has been closed, or the childcare provider is unavailable, due to a public health emergency.

The first two weeks of FMLA leave is unpaid but can be covered by the sick leave provided for in the Act. After the two weeks of unpaid leave, employers must provide up to 10 weeks of paid FMLA leave at a rate of no less than two-thirds of the employee’s regular rate of pay.

Exceptions and Tax Credits for Employers

Given the need for healthcare workers and emergency personnel during this time of crisis, businesses that employ these types of workers do not need to provide them with leave under the Act. Also, the Act permits exceptions to FMLA for employers with fewer than 25 employees if the employee’s position will not exist after FMLA due to an economic downturn or other operating conditions that affect employment caused by the COVID-19 crisis.

To assist businesses in paying for these new paid leave benefits, all employers who provide leave under the Act will receive a refund through a tax credit that will reimburse them for the wages paid as leave. The credit amount for FMLA extended leave benefits is $2000 per day for an employee and $10,000 for all calendar quarters, and sick leave is capped at $511 per day. Credits will apply to the employer’s quarterly payroll tax obligations.

The Workplace: Americans with Disabilities Act (ADA) and Rehabilitation Act 

Employers who are remaining open must determine how to balance the rights of individual employees with creating a safe work environment for all workers. To help employers with this task, the Equal Employment Opportunity Commission (EEOC )has provided guidance on how to manage the impact of COVID-19 in the workplace: EEOC COVID-19 Guidance .

While the ADA and Rehabilitation Act remain in effect, they afford employers the ability to comply with the CDC and public health official directives. The EEOC guidance provides employers with answers regarding how to ensure that sick or potentially sick employees do not remain in the workplace, how to handle ensuring employees returning to work are fit to return, and how to address hiring and screening new employees to ensure they are not a risk to the general employee population.

When assessing how to handle personnel and exposure-related issues in the workplace in the coming weeks and maybe even months, employers should keep in mind that the advice from local public health officials and the CDC are likely to change as the COVID-19 pandemic develops. Also, in addition to the federal policies mentioned here, many states are updating their policies daily to help businesses and employees deal with the fallout from the pandemic.

Given the need for federal and state governments to swiftly implement strategies to cope with the COVID-19 pandemic, business owners must seek legal counsel on how best to implement changes to their businesses amid this national emergency as slight nuances can make all the difference.

For more legal information in regard to the COVID-19 outbreak, please check out our COVID-19 resource page here »