McCarthy Lebit COVID-19 Plan

Robert T. GlickmanManaging Principal, McCarthy, Lebit, Crystal & Liffman Co., LPA

An advisory for clients and friends of McCarthy Lebit:

Re: Employer Coronavirus (COVID-19) issues

In these constantly changing times your counsel at McCarthy Lebit wanted to reach out and discuss several issues employers are facing due to the coronavirus and the changing laws that affect companies going forward.  Issues like when an employer can send an at-risk employee home, protective products in the workplace, and travel restrictions are important to all employers during this crisis.  Your employment, tax, business, and trial lawyers at McCarthy Lebit are available to help address these issues at your convenience.

All of our State and Federal Health Organizations are consistent in their belief that the spread of the coronavirus will get worse before it gets better.  The Federal government has changed various laws as of March 18, 2020 and all employers need to be aware of those changes in addressing concerns of their employees, customers, vendors and third parties moving forward.  We attempt to address several of the frequently asked questions as follows:

Can we ask an employee to stay home if the Company or employees believe that the employee may have been exposed to the virus?

First, employers should continue to do what they have already put in place.  Employees should be instructed that they cannot come to work if they or a family member is sick.  Further, they should not return to work until a health care provider indicates that it is safe to do so.

If an employee comes to work with obvious symptoms of a respiratory illness (e.g. fever, cough, shortness of breath, etc.) they should be instructed to consult with a health care provider and not return to work until the provider indicates that it is safe, but certainly not before the employee is fever free for no less than twenty four (24) consecutive hours.

If an employee has recently returned from a country with a known coronavirus outbreak (e.g. China, Italy, South Korea, Iran, or Japan), it is reasonable to impose an at-home quarantine of fourteen (14) days (the suspected incubation and transmission period of the virus) as recommended by the government health organizations.

The Federal First Coronavirus Response Act (“FFCRA” or the “Act”) has been enacted into law and takes effect April 2, 2020.  Generally, what will this mean for employers?

The FFCRA responds to the coronavirus by addressing the cost of testing and additional assistance to those in need.  For employers, it addresses paid sick leave, paid family medical leave, and unemployment compensation benefits.
 

Paid Sick Leave

The Act applies to employers with fewer than five hundred (500) employees as well as all public employers.  Said employers must provide employees with paid sick time for any reason that qualifies under the Act (e.g. contracting the coronavirus or being exposed to the coronavirus).  Larger employers are excluded from this aspect of the new law.

A “qualifying reason” under the Act where an employee must be provided with paid sick leave if they are unable to work include the following:

  • If an employee is subject to a federal, state, or local quarantine order or is caring for someone subject to such an order;
  • If the employee has been instructed by a medical provider to self-quarantine because of concerns of being exposed to the coronavirus or is caring for someone similarly situated;
  • If the employee is experiencing symptoms of the coronavirus and is seeking confirmation through a medical provider; and
  • If the employee is caring for a child whose school or day care has been closed and for whom care is unavailable due to the pandemic.

It must be noted that employers may not require an employee to use other paid leave prior to using the paid sick leave provided in the Act as long as the leave is taken for a qualifying reason.  Employers may mandate that the employee provide reasonable notice prior to using the paid sick leave.

Employers subject to the Act must provide eighty (80) hours of paid sick leave to full-time employees.  Part-time employees must receive paid sick leave in a number of hours equal to the average number of hours worked in a two-week period.  Paid sick leave does not carry over from one year to the next.  If a part-time employee has a variable schedule, employers may use the average number of hours scheduled per day over the preceding six months.

If an employer is subject to a collective bargaining agreement, the employer may elect to contribute directly into a multiemployer fund based on the hours its employees may be entitled to under the Act.  Employees must just be able to secure pay from the fund for qualifying uses under the Act.

Paid sick time must be paid at the employee’s highest regular rate, the applicable Federal or State/local minimum wage, but there is a maximum of $511.00 per day per employee.  If the employee is using paid sick leave to care for a family member or a child unable to attend school or daycare, the employee is to be paid 2/3 of their highest regular rate up to a maximum of $200.00 per day.

The United States Department of Labor (“DOL”) is mandated to issue guidelines for employers to use to calculate paid sick leave no later than April 2, 2020.

Of course, employers are prohibited from discriminating or retaliating against any employee who attempt to obtain paid sick leave under the Act.

There are several other requirements of the Act that affect employers including the following;

  • A notice of the employees’ rights must be posted by the employer in a form to be provided by the DOL that is to be available next week;
  • The Act does not take away any right the employee might have under existing law or any company policy;
  • The Secretary of Labor is empowered to exclude certain employees who work for health care providers or first responders as well as to exempt certain employees with fewer than fifty (50) employees; and
  • An employer who violates the Act is subject to the remedies provided in the Fair Labor Standards Act; and
  • These paid sick leave requirements expire on December 31, 2020.

Emergency FMLA Expansion

The Act provides for additional FMLA employer obligations including the following:

  • Twelve (12) weeks of job protected leave for employees who cannot work, including tele-working, because of a minor whose school or daycare has been closed, if the child’s daycare provider is unavailable due to the pandemic, or due to an emergency related to the coronavirus declared by a Federal, State or local authority (employees only need to be employed for thirty (30) days to access this leave with no minimum hours threshold);
  • Although the first ten days of the expanded leave may be unpaid (although the employee may use existing traditional leave over that time), the employer must provide paid leave after the tenth day.  Said leave must be paid at a rate of at least 2/3 of the employee’s regular pay rate according the number of hours is scheduled to work up to a maximum of $200.00 per day; and
  • When possible, employees must provide reasonable notice of the need to use the leave.

Tax Credits

In at least an attempt to lessen the burden on employers, the Act provides for a refundable payroll tax credit equal to 100% of the paid sick leave paid by an employer in each quarter.  This credit is allowed against the employer portion of Medicare and Social Security taxes.

Self-employed individuals’ area also entitled to a refundable income tax credit if the individual must comply with a quarantine recommendation related to the coronavirus.

Unemployment Compensation

The Act provides funding to aid State unemployment compensation programs as long as the State agrees to certain terms which include the following:

  • The State waives any waiting period;
  • The State waives the work search requirement, if any, for employees directly impacted by the coronavirus; and
  • The State does not charge employer accounts for the coronavirus related benefits.

The Act also requires the States to improve access to benefits in numerous ways.
Employers must also provide notice to employees upon separation of the availability of the unemployment compensation utilizing a model to be provided by the DOL.

These new laws, programs and amendments related to the coronavirus pandemic are going to continue to evolve in the coming weeks and months.  Your counsel at McCarthy Lebit remain available to answer questions, provide advice and help guide your through this troubling period.

Rob Glickman
Managing Principal