NYS and Federal COVID-19 Response — WHAT WE KNOW TODAY
Last Updated April 3, 2020 10:30 AM EST
The Families First Coronavirus Response Act (FFCRA) — What We Know as of Today, April 3, 2020
The U.S. Department of Labor has published FAQs that answer some of our outstanding questions about the FFCRA and has issued temporary regulations as well. The full text of the FAQs may be accessed here: https://www.dol.gov/agencies/whd/pandemic/ffcra-questions.
Here is a summary of what we know as of today, April 3, 2020:
- Furloughed employees are NOT entitled to EPSL (Emergency Paid Sick Leave) or FMLA+ (Expanded Family and Medical Leave), but may be entitled to the enhanced unemployment benefits now being offered.
- The FAQs explicitly state that “if your employer furloughs you because it does not have enough work or business for you, you are not entitled to then take paid sick leave or expanded family and medical leave.” Instead, the employee may be entitled to unemployment insurance benefits.
- This includes employees who are currently not working because their employer has temporarily closed its worksite(s) due to the COVID-19 crisis.
- Regardless of whether a worksite is closed before, on, or after April 1, 2020, the affected employees will not receive EPSL or FMLA+ and instead may be eligible for unemployment insurance benefits even where an employee requested EPSL or FMLA+ prior to the closure.
- This is true whether the employer closes its worksite(s) “for lack of business or because it is required to close pursuant to a Federal, State, or local directive.”
- In addition, if an employer closes its worksite(s) while an employee is receiving EPSL or FMLA+, the employer must pay the employee for any EPSL or FMLA+ used before the closure but, as of the date the worksite is closed, the employee is no longer entitled to the paid leave.
- Employers with less than 50 employees may be exempt from providing EPSL or FMLA+ for an employee’s absence to care for a child whose school or place of care has been closed due to COVID-19, if imposing the mandate would jeopardize the viability of the business as a going concern.
A small business can claim this exemption if “an authorized officer of the business” has determined that:
- the provision of EPSL or FMLA+ would result in the employer’s expenses and financial obligations exceeding available business revenues and cause the small business to cease operating at a minimal capacity;
- the absence of the employee or employees requesting EPSL or FMLA+ would entail a substantial risk to the financial health or operational capabilities of the small business because of their specialized skills, knowledge of the business, or responsibilities; or
- there are not sufficient workers who are able, willing, and qualified, and who will be available at the time and place needed, to perform the labor or services provided by the employee or employees requesting EPSL or FMLA+, and these labor or services are needed for the small business to operate at a minimal capacity.
It is important to note that employers who determine that they qualify for this exemption should document the basis for their determination but should not send any materials to the Department of Labor at this time.
- EPSL or FMLA+ may be taken intermittently for certain reasons, but only if the employer agrees to it.
- An employee can use EPSL or FMLA+ intermittently, if (a) the employer allows it (i.e., the employee and employer mutually agree) and (b) if the employee is unable to telework their normal schedule of hours due to one of the qualifying EPSL or FMLA+ reasons.
- However, employees who are working at their regular worksite (i.e., not teleworking) and request to use EPSL for a covered reason other than to care for their child whose school or place of care has closed due to COVID-19 concerns must take the EPSL in full-day increments, and must continue to take EPSL every day until they either (1) use the full amount of EPSL or (2) no longer have a qualifying reason for taking EPSL.
- FMLA+ Leave counts towards an employee’s regular 12-week FMLA entitlement.
- Likewise, if an employee works for an employer who was covered by the FMLA prior to April 1, 2020, and the employee has taken some or all of the 12 workweeks of standard leave under the FMLA during the current 12-month period, the employee’s entitlement to FMLA+ under the FFCRA would be reduced accordingly.
- Employers cannot require employees to use existing paid leave (e.g., vacation days or PTO) instead of or to supplement EPSL or FMLA+, but employees may choose to do so.
- It is important to note that an employer may not claim, and will not receive tax credit, for such supplemental amounts of paid leave provided to an employee in excess of what is permitted under the FFCRA.
- An employer may require an employee who takes EPSL or FMLA+ to care for his/her child whose school or place of care is closed, or childcare provider is unavailable, due to COVID-19, to provide documentation in support of such leave.
The DOL said that the employee must provide a signed statement containing:
- The employee’s name;
- the date(s) for which leave is requested;
- the coronavirus-qualifying reason for leave;
- a statement that the employee can’t work or telework because of this reason; and
- the name of the government entity that issued the quarantine or isolation order to which the employee or person that the employee is caring for is subject, if that is the reason for paid sick leave or, in the case of self-quarantine, the name of the health care provider who advised the individual to self-quarantine.
An individual requesting FMLA+ must provide:
- the name of the child being cared for;
- the name of the school, place of care or childcare provider that closed or became unavailable due to coronavirus reasons; and
- a statement representing that no other suitable person is available to care for the child during the period of requested leave.
- The DOL’s 30-day non-enforcement period of the FFCRA against employers who make a good faith effort to comply with the law will end on April 17, 2020.
New York State Paid Sick and Family Leave for COVID-19
The NYS law only provides paid sick and family leave to employees who are “subject to a mandatory or precautionary order of quarantine or isolation that is issued by the state of New York, the department of health, local board of health, or any governmental entity duly authorized to issue such order due to COVID-19.” It does not cover employees directed to quarantine by their doctor or those who choose to self-quarantine because of suspected exposure. Likewise, Governor Cuomo’s executive order directing the closure of all non-essential businesses is most likely considered to be a “preventative” order which would not be covered by the law.
Thus, the application of the NYS law is rather limited in its scope and, therefore, we believe it is more important to focus on what employers will be required to provide under the federal law, which takes effect on April 1st.
Families First Coronavirus Response Act (FFCRA)
At the outset, it is important to note that this federal law was hastily written and passed without the normal time for considering all of the potential nuances and, therefore, some of the language is vague and certain key details are not addressed. It is our hope that the U.S. Department of Labor (“DOL”) and other agencies tasked with issuing regulations interpreting the law will provide clarity when those regulations are issued within the next week.
In the meantime, this is what we know about the law’s requirements as of today, March 25, 2020. Please note that this is just a summary of the key points of the law for informational purposes, rather than a complete summary of all of its provisions.
The law, which covers all employers with less than 500 employees, has two parts: Emergency Paid Sick Leave (EPSL) and changes to the existing Family and Medical Leave Act, which we will refer to as FMLA+.
- Employer Reimbursement for Providing Paid Leave
- Employers will receive 100% reimbursement for paid leave provided pursuant to the FFCRA.
- Health insurance costs are also included in the credit.
- To take immediate advantage of the paid leave credits, businesses can retain and access funds that they would otherwise pay to the IRS in payroll taxes, including social security and Medicare taxes.
- If those amounts are insufficient to cover the cost of the paid leave provided, employers can seek an expedited monetary advance from the IRS by submitting a streamlined claim form that will be released next week. The IRS expects to process these requests in two weeks or less.
- Key points about EPSL:
- Covers first two weeks (10 days) of leave if the employee:
- is subject to a quarantine or isolation order related to COVID-19;
- has been advised by a health care provider to self-quarantine due to COVID-19;
- is experiencing symptoms of COVID-19 and seeking a medical diagnosis;
- is caring for an individual who is subject to a quarantine order or has been advised to self-quarantine;
- is caring for their child as a result of childcare or school closures or if the childcare provider is unavailable due to COVID-19 precautions; or
- is experiencing any other substantially similar condition specified by the Secretary of Health and Human Services.
- Provides full pay (up to a maximum of $511 per day and $5,110 total) or 2/3 pay (up to a maximum of $200 per day and $2,000 total), depending on reason for leave.
- Any employee is eligible for EPSL on day one of employment, including part-time, temporary and seasonal employees.
- Employee must be unable to work OR to telework because of one of the six listed reasons. It is unclear at this point who makes the determination about whether or not an employee is unable to telework.
- Covers first two weeks (10 days) of leave if the employee:
- Key points about FMLA+:
- All employees who have been on the payroll for 30 days are eligible for up to 12 weeks of leave.
- FMLA+ is only available to employees who are unable to work OR telework because they have to care for a minor child whose school is closed or for whom childcare is unavailable due to the crisis.
- Technically, the first two weeks of FMLA+ are unpaid and then the remaining 10 weeks are paid but, because an employee can take EPSL at 2/3 pay for two weeks due to a child unable to go to school or lack of childcare, and that leave will run concurrent with the first two weeks of FMLA+ leave, in reality the entire 12 weeks of FMLA+ is paid to some extent.
- It is not clear if employers can count other FMLA leave that employees have taken in the past 12 months will count against their FMLA+ entitlement, but it may be possible. Hopefully the regulations will clarify.
- It is also not clear whether FMLA+ can be taken intermittently but, based on the fact that prior drafts of the law required FMLA+ to be taken as one block and that there is no such requirement in the final bill, there is a good likelihood that intermittent FMLA+ will be allowed.
- Employers with fewer than 50 employees are eligible for an exemption from the requirements to provide leave to care for a child whose school is closed, or childcare is unavailable in cases where the viability of the business would be threatened by doing so. The DOL will provide emergency guidance and rule making to clearly articulate this standard.
- Employers with less than 25 employees do not have to reinstate an employee whose position is eliminated for business reasons related to the crisis but, if that or an equivalent position becomes available within one year of the employee’s leave, the employer must contact the employee to offer the employee the position.
- Effect of furloughs or layoffs on eligibility for these benefits:
- Not addressed by the law, but hopefully the regulations will address.
- Best guess – laid off employees will not be entitled to EPSL or FMLA+ leave, but furloughed employees will be.
- However, laying off employees just to avoid paying these benefits could result in retaliation claims and would violate the spirit of the law.
- Employers who are considering layoffs should be able to articulate and document legitimate reasons for the layoffs due to economic conditions affecting the business rather than just avoiding compliance with this law.
- Other general points:
- Each covered employer must post in a conspicuous place on its premises a notice of FFCRA requirements. According to the DOL, an employer may satisfy this requirement by emailing this notice to employees or posting this notice on an employee information internal or external website. Here is a link to the notice: https://www.dol.gov/sites/dolgov/files/WHD/posters/FFCRA_Poster_WH1422_Non-Federal.pdf
- The law’s requirements will be subject to a 30-day non-enforcement period for good faith compliance efforts by employers.
- It is important that employers keep detailed records of paid leave provided to employees pursuant to this law so that they can reconcile it with their tax credits.
- Healthcare workers can be excluded from the definition of “employee” under this law.
- The law does not provide any guidance on what types of documentation can be required by employers to support the need for leave. Hopefully that will be provided in the regulations, but employers should be lenient.
- The law says that employers must comply by April 2nd, which means some employers may choose to start granting EPSL or FMLA+ sooner, but employers who do so will probably not be eligible for the tax credit for that leave.
- Employees can choose to augment partial pay provided pursuant to FFCRA with available PTO, but employers cannot require employees to substitute PTO for the legally mandated paid leave.
- An employer’s current policies regarding leave and use of PTO can continue to apply until April 1st, when the FFCRA requirements will pre-empt those policies.
- It is important to note that an employee may also be eligible for “regular” FMLA leave due to the employee’s own serious health condition or to care for a family member with a serious health condition, which would include having COVID-19, in accordance with the existing FMLA regulations.
Federal Economic Stimulus Bill
Congress reached an agreement on a COVID-19 economic stimulus package early this morning. It is likely to be finalized and signed into law within the next few days. We know that the legislation will provide direct economic relief to individuals and families, as well as small businesses, but we are still waiting for all the details to be made available. What we do know from news reports is that:
- It will extend the length of eligibility for unemployment insurance benefits by 13 weeks and include a four-month enhancement of benefits that would allow employees to maintain their full salaries if forced out of work as a result of the pandemic.
- The law will establish lending programs for small businesses, but only for those who keep their payrolls steady through the crisis. Small businesses that pledge to retain their employees will also receive cash flow assistance structured as federally guaranteed loans. If the employer continues to pay its employees for the duration of the crisis, those loans will be forgiven.
We recognize that we have provided you with a lot of information. Please feel free to contact us if you have any questions about how this applies to your particular business. We will provide additional updates as more information about these laws becomes available.