As the Coronavirus continues to spread California has provided additional guidance on which businesses are deemed “essential” and may be able to stay open and operating during these difficult times. In addition, the U.S. Department of Labor Wage & Hour Division published some additional guidance. Below is also a summary of the California EDD’s Work Sharing Program which may be an alternative to layoffs.
U.S. DEPARTMENT OF LABOR UPDATE ON THE FAMILIES FIRST CORONAVIRUS ACT
The U.S. Department of Labor Wage and Hour Division (WHD) announced its first round of published guidance to provide information to employees and employers about how each will be able to take advantage of the protections and relief offered by the Families First Coronavirus Response Act (FFCRA).
The guidance provided in a Fact Sheet for Employees, a Fact Sheet for Employers and a Questions and Answers document to address some of the critical question such as how an employer must count the number of their employees to determine coverage; how small businesses can obtain an exemption; how to count hours for part-time employees; and how to calculate the wages employees are entitled to under this law.
The most significant statement is that the Act is effective April 1, 2020 NOT April 2nd as previously reported.
WHD has also published the required poster “EMPLOYEE RIGHTS PAID SICK LEAVE AND EXPANDED FAMILY AND MEDICAL LEAVE UNDER THE FAMILIES FIRST CORONAVIRUS RESPONSE ACT” that must be displayed.
Click here for the poster: https://www.dol.gov/sites/dolgov/files/WHD/posters/FFCRA_Poster_WH1422_Non-Federal.pdf
The guidance is just the first round of information and compliance assistance to come from WHD. A workplace poster required for most employers will be published later this week, along with additional fact sheets and more Q&A.
Click here for the WHD guidance: https://www.dol.gov/agencies/whd/pandemic.
For more information about the laws enforced by the WHD, call 866-4US-WAGE, or visit https://www.dol.gov/agencies/whd.
CALIFORNIA STAY AT HOME ORDER UPDATE
Below is the updated information on the California Stay At Home Order.
On March 19, 2020 Governor Newsom signed Executive Order N-33-20, putting into place a “stay home” order in an attempt to reduce the spread of the Coronavirus (COVID-19). Click here for a copy of the Order: https://covid19.ca.gov/img/Executive-Order-N-33-20.pdf
The Executive Order specifically stated that certain businesses would remain open and were not subject to closure if they provide “essential services” such as gas stations, pharmacies, grocery stores, take out and delivery restaurants, banks, and laundromats / laundry services.
On March 21, 2020 the State Public Health Officer published additional guidance and designated a more specific and detailed list of “Essential Critical Infrastructure Workers.”
The businesses specifically identified as essential and the “Essential Workforce” include those in the following industries and are set forth in greater detail in the directive, which can be found here:
Click here for the details: http://covid19.ca.gov/img/EssentialCriticalInfrastructureWorkers.pdf
- Healthcare/Public Health
- Emergency Services Sector
- Food & Agriculture
- Energy which is further detailed as Electricity Industry, Petroleum workers and Natural and Propane Gas Workers
- Waste & Wastewater
- Transportation and Logistics
- Communications and Information Technology
- Other Community-Based Government Operations & Essential Functions (which covers a vast array of different occupations and businesses)
- Critical Manufacturing
- Hazardous Materials
- Financial Services
- Chemical
- Defense Industrial Base
A review of the directive should be undertaken to determine if your specific business operations is deemed to be an “essential service” which would exempt the operations from the Stay Home order and seemingly permit continued operations with essential employees. Of course, employers must continue to follow the CDC’s and OSHA’s recommended guidelines for ensuring a safe workplace for its employees.
A list of Frequently Asked Questions has also been published and can be found here: https://covid19.ca.gov/stay-home-except-for-essential-needs
In light of the confusion between the Los Angeles County (and other local Stay Home) regulations and the Governor’s Executive Order, the most commonly asked question is:
How does this order interact with local orders to shelter in place? Does it supersede them?
This is a statewide order. Depending on the conditions in their area, local officials may enforce stricter public health orders. But they may not loosen the state’s order.
BENEFIT PROGRAMS FOR EMPLOYEES AND LAY OFF ALTERNATIVES DURING THE PANDEMIC
Unemployment Insurance Benefits
Employees may apply for Unemployment Insurance with the California Employment Development Department if they have suffered a job loss or their hours have been reduced as a result of COVID-19. The EDD has waived the standard 7 day waiting period for claims. The amount of the benefits range depending on the employee’s income with a cap at $450.00 per week. Employees are not required to seek other employment during the period of time they are receiving UI benefits.
Short-Term Disability Insurance Benefits
If an employee becomes ill and is unable to work due to having or being exposed to COVID-19 the employee can file a claim for State Disability Insurance (SDI). The employee will need to submit medical certification of their status. SDI benefit amounts are approximately 60-70 percent of wages (depending on income) and range from $50-$1,300 a week. The one week waiting period has also been waived so employees should be able to begin receiving benefits when their claim is filed.
SDI is employee-funded, so employers are not charged for the benefits paid under the SDI, which in turn prevents their tax rate from increasing.
Paid Family Leave for Caregiving
If employees are unable to work because they are caring for ill or quarantined family members with COVID-19 they can file a Paid Family Leave (PFL) claim. The PFL benefit amounts are approximately 60-70 percent of wages (depending on income) and range from $50-$1,300 a week. The employee will also likely be required to submit medical documentation that they are required to provide care for an ill family member. As with SDI and EDD, the one week waiting period has been waived.
As with SDI, PFL is employee-funded, and so does not impact an employer’s tax rate.
Work Sharing Plan
If employees are unable to work due to business closures an option for the Company is to participate in a Work Sharing Plan through the EDD. The Work Sharing Plan allows employers to reduce employees’ wages or hours without implementing a layoff and also allows the employees to receive unemployment insurance (UI) benefits. The employee also will be able to their health and retirement benefits under the same terms and conditions as prior to the reduction in hours and wages or to the same extent as other employees not participating in the plan.
Employers can apply for the Unemployment Insurance (UI) Work Sharing Program if reduced production, services, or other conditions cause them to seek an alternative to layoffs.
The Work Sharing Program helps employees whose hours and wages have been reduced:
- Receive UI benefits.
- Keep their current job.
- Avoid financial hardships.
The Work Sharing Program helps employers:
- Minimize or eliminate the need for layoffs.
- Keep trained employees and quickly prepare when business conditions improve.
- Avoid the cost of recruiting, hiring, and training new employees.
To participate, an employer must take certain steps and meet all of the following requirements:
- Be a legally registered business in California.
- Have an active California State Employer Account Number with the California Employment Development Department (EDD).
- At least 10% of the employer’s regular workforce or a unit of the workforce, and a minimum of two employees, must be affected by a reduction in hours and wages.
- Hours and wages must be reduced by at least 10 percent and not exceed 60 percent.
- Health benefits must remain the same as before, or they must meet the same standards as other employees who are not participating in Work Sharing.
- The collective bargaining agent of employees in a bargaining unit must agree to voluntarily participate and sign the application for Work Sharing.
- Retirement benefits must meet the same terms and conditions as before, or they must meet the same as those benefits provided to other employees not participating in Work Sharing.
- Identify the affected work units to be covered by the Work Sharing plan and identify each participating employee by their full name and Social Security number.
- Notify employees in advance of the intent to participate in the Work Sharing program.
- Identify how many layoffs will be avoided by participating in the Work Sharing program.
- Provide the EDD with any necessary reports or documents relating to the Work Sharing plan.
- Not include any seasonal, leased, temporary employees, corporate officers or major shareholders.
To start a Workshare Plan, an employer files an application with the EDD on Form DE 8686, which becomes effective on the Sunday of the week before the application is filed. A Work Share Plan remains in place for one year but may be renewed.
In addition, the employee must have completed a normal work week (with no hour or wage reductions) prior to participating in Work Sharing.
Benefits to Work Sharing:
- Work Sharing is flexible in that employees can be rotated from week to week and the employer can determine which weeks will have hour and wage reductions;
- Benefits are available if the employee works some weeks and does not work other weeks. An employee can not work three weeks in a row and still be considered part of the Work Sharing;
- An employer can stop providing the employees the work sharing forms and bring the employees’ wages and hours worked back in line to the normal levels prior to the institution of the Work Sharing Plan prior to the expiration of the initial 12 month period. A request can also be submitted to the EDD prior to the expiration of this initial 12 month period to cancel the Work Sharing Plan;
- Employers are charged for Work Sharing Unemployment Insurance (UI) benefits the same way as regular UI benefits;
- Benefits are paid weekly proportionate to the percentage of reduction in hours and wages.
Per the EDD the following example is provided:
An employee normally works a five-day workweek and is paid $500. If this employee’s workweek is reduced to four days, the employee’s weekly wages would be $400. This is a 20 percent reduction in wages and hours. The Work Sharing benefits for this employee are 20 percent of the Unemployment Insurance benefits the employee would receive if the employee were totally unemployed. If the employee’s weekly Unemployment Insurance benefit amount is $300, the employee would qualify for $60 in Work Sharing benefits. This results in a reduction in gross wages of only $40 for that week ($400 + $60 = $460).
To learn more and apply for the Work Sharing Plan, click here:
https://www.edd.ca.gov/unemployment/Work_Sharing_Program.htm
The EDD provides the following resources
A Work Sharing Plan eliminates the requirement imposed on employees to seek other employment during the period they receive benefits. Another advantage of Work Sharing Plans is that they have the potential to result in more UI benefits than a straight UI benefit claim because Work Sharing is based on a reduction in hours while UI benefits are based on a reduction in hours and income.
Benefits can be available in nonconsecutive weeks. For example, an employee normally works 40 hours a week. While on the Work Sharing Plan, the employee might be scheduled to work for only 24 hours and obtains benefits. The next week the employee takes 40 hours of vacation and does not apply for benefits. In week three, the employee is again scheduled for 24 hours, and receives benefits again.
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.