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FAMILIES FIRST CORONAVIRUS RESPONSE ACT

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FAMILIES FIRST CORONAVIRUS RESPONSE ACT

In a continuing effort to provide updated information on the evolving laws that impact the workplace during the COVID-19 crisis, below is a brief summary of The Emergency Families First Coronavirus Response Act (the “Act”) which was signed by President Trump on March 18th. While the Act covers many different topics, the Act contains several significant provisions that directly impact employers by requiring expanded paid sick leave benefits and expanded Family Leave benefits.

These provisions go into effect April 2, 2020 and are in effect until December 31, 2020.

In light of the Executive Order signed by Governor Newson along with the various local Safer At Home and Shelter In Place orders, some of the provisions of the new Federal Act may not have as much impact on California employers and employees. The application of the Act to California employers will depend on whether the workforce remains “employed” as of the effective date of the Act.  As of the writing of this newsletter, we believe that if the employees are laid off or terminated  prior to the effective date of the federal Act, the workers are no longer “employees” and arguably no longer entitled to the Federal Paid Sick Leave or the expanded Family Leave Act benefits under the Act.

In brief, the Act requires employers with fewer than 500 employees to provide the following:

Paid Sick Leave: Covered employers must provide two weeks’ paid leave (paid by the employer) to employees who need to take time off because of (1) an actual or potential illness related to COVID-19, (2) to care for family members who are home ill or quarantined because of COVID-19 exposure or (3) to care for children who are home because of school or care provider closures.

Employees will continue to be able to utilize any available paid sick leave under California or local ordinance in conjunction or in addition to the Paid Sick Leave under the Act.

Paid Family Leave: Covered employers must provide employees up to 12 weeks’ leave, for employees who have to take time off to care for children who are home because of school or daycare closure. Of the 12 weeks, 10 weeks are paid leave (subject to certain limitations) (paid by the Employer).

Employees who are otherwise eligible for a leave of absence under the regular provisions of the Federal Family and Medical Care Leave Act or the California Family Rights Act remain entitled to these benefits.

Below is a summary of the relevant provisions of the Act:
PAID SICK LEAVE

The Act will require covered employers to provide all employees (regardless of how long they have been employed) with two weeks of paid sick leave due to Coronavirus-related absences. The Act requires full time employees be provided 80 hours; part time employees are to be provided the number of hours they work, on average during a two week period.

Any paid sick leave under the Act is in addition to any sick leave already offered by the employer such as Paid Sick Leave mandated by California or any local ordinance. 
Reasons to Take Paid Sick Leave: Paid sick time would be available to any employee absent for:
    • Self-isolation because they have the coronavirus disease;
    • Obtaining a diagnosis because they are exhibiting symptoms of COVID-19;
    • Complying with an order from a health-care provider requiring them to stay away from work;
    • Caring for a family member who is facing any of the above;
    • Caring for children if schools are closed or because a caregiver is unavailable because of the ongoing public health emergency; or
    • To address any other “substantially similar condition” identified by the Secretary of Health and Human Services in consultation with the Secretary of the Treasury and the Secretary of Labor.
Full Compensation Rate: The employee must be paid at the employee’s full regular rate, if the employee is unable to work (or telework) because 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 concerns related to COVID-19; and/or;
    • Is seeking a coronavirus diagnosis if such employee is experiencing symptoms of the coronavirus.

The total compensation for the above covered reasons is capped at $511 per day (or $5,110 total for the duration of the covered leave).

Two Thirds (2/3) Compensation Rate: Leave is paid at two-thirds the employee’s regular rate if the employee takes leave because:
    • The employee must care for an individual who is subject to a quarantine or isolation order related to COVID-19, or the individual has been advised by a health care provider to self-quarantine due to concerns related to COVID-19;
    • The employee must care for a son or daughter whose school or place of care has been closed, or the child care provider is unavailable, due to COVID-19; or
    • The employee is experiencing other substantially similar condition specified by the Secretary of Health and Human Services in consultation with the Secretary of the Treasury and the Secretary of Labor.

The total compensation for the above covered reasons is capped at $200 per day or $2,000 in the total leave.

Additional Provisions
    • Paid sick leave under the Emergency Paid Sick Leave will not carry over from one year to the next.
    • An employer is prohibited from requiring employees to look for or find replacement employees to cover the hours during which the employee is using paid sick leave.
    • Employers may not require employees to first exhaust other forms of paid leave (such as California or locally mandated paid sick leave or other paid time off) before providing the Act paid sick leave.
    • Termination of paid sick time: Paid sick time provided to an employee under this Act shall cease beginning with the employee’s next scheduled work shift immediately following the termination of the need for paid sick time.

The Secretary of Labor can exempt small businesses (fewer than 50 employees) from the requirement to offer leave for a child when a school is closed when the imposition of that paid sick time would jeopardize the viability of the business as an ongoing concern. When (and whether) the Secretary will issue that regulation is unknown.

Posting Requirements, Compliance, And Caps

Employers are required to post a notice in conspicuous places on the premises where notices to employees are customarily posted of the paid sick leave rights (either a notice or language for the notice will be provided by the Secretary of Labor within seven days). 

Failure to comply with the Act will result in the employer being subject to penalties similar to those issued for minimum wage violations. 
 
PAID FAMILY CARE LEAVE
The Act expands the Federal Family and Medical Leave Act to obligate most employers with 500 or fewer employees to provide employees with up to 12 weeks of leave (10 of which are paid family leave). 

The employee’s first 10 days of leave may be unpaid; however, the employee can choose to use any accrued and unused vacation or personal time or other paid sick leave benefits during this period. After the first 10 days of unpaid leave, employers must provide paid leave at a rate of no less than two-thirds of the employee’s regular rate of pay.

An employee seeking paid family leave must have been employed for at least 30 days at the time they begin the paid family leave (not the usual 12 months of employment required under the regular provisions of FMLA).  Once eligible, employees can take a paid family leave if they are unable to work (including telework) due to the need to care for children if schools are closed or daycare is unavailable because of a declaration of a public health emergency.

Employee Notice: An employee shall be required to provide the employer with such notice of leave as is practicable (although this is not further defined in the Act).

This paid leave is NOT available for an employee to recover from a COVID-19 diagnosis, or to self-quarantine.

Compensation:
    • For the first 10 days of Paid Family Leave, there is no compensation required under this portion of the law (though an employee can take other paid leaves, including paid sick time, to receive compensation).
    • After 10 days, the employee is compensated at two-thirds of their regular rate for the duration of the leave capped at a payment of $200 per day, or $10,000 in the aggregate.
EXEMPTIONS
Reinstatement Exemption: Employer with Fewer than 25 employees

An employer with fewer than 25 employees does not need restore an employee to their prior position if the position held by the employee when the leave commenced does not exist due to economic conditions or other changes in operating conditions of the employer that affect employment; and are caused by a public health emergency during the period of leave.

An employer should make reasonable efforts to restore the employee to a position equivalent to the position the employee held when the leave commenced, with equivalent employment benefits, pay, and other terms and conditions of employment if possible. If the reasonable efforts of the employer fail, the employer shall make a reasonable effort during the period of leave to contact the employee if an equivalent position becomes available.

No Civil Action Against Employer with Fewer than 50 Employers

In addition, employers with less than 50 employees would not be subject to a civil action from an employee for an alleged violation of this portion of the Act (although the Department of Labor still would be able to commence an enforcement action against an employer who had failed to comply).

TAX CREDITS

Paid Sick Leave Payments: Any employer providing paid sick leave wages to its employees due to the Coronavirus will receive payroll tax credits quarterly if they exceed the required Social Security taxes the employer ordinarily owes.

Paid Family Leave: Employers who must offer emergency Paid Family Leave wages would be entitled to tax credits against the employer’s Social Security tax obligation equal to 100% of the qualified paid family leave wages paid per calendar quarter. Such Emergency Paid Family Leave tax credits are capped at $200 per day for each individual up to $10,000 in the aggregate per calendar quarter.

LEGAL OBLIGATIONS WHEN THE WORK PLACE SHUTS DOWN?
Final Paycheck:

Continued Employment:  When an employer determines that they must close operations for a period of time in compliance with state, local or federal regulations, and if there is an anticipation or expectation of continued employment within a reasonable period of time (e.g. the end of the payroll period) the employee can be placed on “furlough” or “inactive” status and there would be no obligation to pay a “final paycheck”.  These employees can be paid on the next regular payday. Employees should be advised that their employment has not been terminated and their employment is expected to continue.  However, the longer the uncertainty, the more the “inactive” status should be transitioned into a layoff status.

Layoff & Terminations: If there is no expectation or anticipation of continued employment beyond a week or tow, the employees should be notified that they are being laid off (whether temporary or permanently and with or without recall rights) or terminated.   A layoff, for purposes of final wages, the same as a termination and the employees must be paid their final wages, including any earned and unused vacation or PTO benefits as of the effective date of the layoff or separation.  Employees would also need to be provided the standard separation forms and information pertaining to EDD benefits, COBRA, etc. 

Resignation: If an employee chooses to resign, the employer must provide the final paycheck within 72 hours of the employee’s notice of resignation.

Final paychecks must be made available within the time required by California law and can be provided either at the employee’s regular place of business or the employee can authorize payment by direct deposit or mail. If the employee authorizes delivery by mail, the employee should put this authorization in writing (email is fine) and the check should be sent via an overnight delivery service with tracking to ensure timely delivery.

Notice Obligations

Whenever there is a change in the employment status, an employer must provide the employee notice in writing. Employees must be advised that due to the current COVID-19 crisis, and for their own safety, or due to business necessity they are not to report to work and notify the employees if they are being laid off, put on “inactive status”, furlough or terminated.

If there is a mass layoff or plant closing, then the modified California WARN Act and the Federal WARN Act may apply. These issues were addressed in a previous newsletter which can be found here (click here for the Coronavirus in the Work Part-Two newsletter).
RETALIATION IS PROHIBITED

It is important to note that the Emergency Act includes anti-retaliation protections and, thus, it is unlawful for an employer to interfere with, restrain, or deny anyone from exercising or attempting to exercise their rights under the Emergency Act.

Click here or below for a full copy of the text of the Act:
https://www.congress.gov/bill/116th-congress/house-bill/6201/text 


This Newsletter is intended as a brief summary of employment law. While every effort has been made to ensure the accuracy of the information contained herein, it is not intended to serve as “legal advice,” or to establish an attorney-client relationship. If additional information is needed on any of the topics contained herein, please contact our office. All rights reserved. ©2020.