March 26, 2020
We are facing an ever-changing landscape with how COVID-19 is impacting our communities and businesses. This update will provide information on the following topics:
- The Families First Coronavirus Response Act (Paid Leave and E-FMLA)
- ADA Changes to allow for the taking of temperatures of employees
- Temporary modifications to the way I-9 documents are reviewed
- Benefit Considerations for leave, furloughs and layoffs
- Minnesota Shelter-in-Place Order
The Families First Coronavirus Response Act Paid Leave Provisions
The Families First Coronavirus Response Act (the “FFCRA”) was signed into law last week. The FFCRA provides additional benefits for employees impacted by the COVID-19 crisis including a limited period of paid sick leave and expansion of the Family and Medical Leave Act (“FMLA”) to provide an extended period of unpaid or partially paid leave for a public health emergency (‘E-FMLA’).
On March 24, 2020, the Department of Labor issued the first guidance for implementation of the FFCRA paid sick leave and FMLA expansion. We now have clarification on some items, but questions still remain. Additional guidance will be forthcoming.
Of importance, both of these provisions will go into effect on April 1, 2020 for leave taken April 1, 2020 through December 31, 2020 for qualifying reasons. There will not be a retroactive application of the leave provisions. Thus, any leave taken prior to April 1, 2020, will be treated under employer’s current policies and/or existing laws.
The summaries of the act provisions with current information is as follows:
The Emergency Paid Sick Leave Act
- Covered Employers: The Emergency Paid Sick Leave Act applies to private employers who employ fewer than 500 employees and government employers.
- Qualifying Reasons for leave: The Act provides paid sick leave to employees to the extent that the employee is unable to work (or telework) because:
- The employee is subject to a federal, state or local quarantine or isolation order related to COVID-19.
- The employee has been advised by a health care provider to self-quarantine due to concerns related to COVID-19.
- The employee is experiencing symptoms of COVID-19 and is seeking a medical diagnosis.
- The employee is caring for an individual who is subject to a quarantine or isolation order or has been advised by a health care provider to self-quarantine.
- The employee is caring for a son or daughter because the child’s school or place of care has been closed or the child’s childcare is unavailable due to COVID-19 precautions.
- The employee is experiencing any other substantially similar condition specified by the Secretary of the HHS in consultation with the Secretary of the Treasury and the Secretary of Labor.
- Exception:Employers of health care providers or emergency responders may elect not to provide this leave to those employees.
- Qualifying Employees: Paid sick time must be made available to all employees, no matter how long their tenure.
- Notice Procedures: Employers may require employees to follow reasonable notice procedures to continue to receive Paid Sick Leave after the first workday (or portion thereof) an employee receives paid sick time.
- How Much Leave Will Qualified Employees be Entitled To?
- Full-time employees are entitled to 80 hours of paid sick leave.
- Part-time employers are entitled to an amount of leave equal to the average number of hours the employee works over a two-week period.
- There is no carryover from year to year for this paid sick time, and once the employee returns to work the employer is not required to provide any further paid sick leave as required by the Act.
- Employers cannot require an employee to find a replacement before allowing the employee to take this paid sick time.
- Calculation of Pay
- If time off is taken for the employee’s own medical condition (Reasons 1, 2 or 3 above), employees must be compensated at the higher of
(1) the employee’s regular rate of pay,
(2) federal minimum wage, or
(3) the local minimum wage.
- If time off is taken to care for a sick family member or a child who is not in school (Reasons 4, 5 and 6), employees must be compensated at two-thirds of their regular rate of pay.
- There is a cap on the amount an employer is required to pay to employees receiving Paid Sick Leave. These caps differ depending on whether the employee is receiving full wages or two-thirds wages.
- Cap of $511 per day and an aggregate limit of $5,110 for those receiving full wages (Reasons 1, 2, and 3 above)
- Cap of $200 per day with $2,000 aggregate when leave is to care for another (Reasons 4, 5, and 6 where the employee would be paid at a two-thirds rate).
- The Regular Rate of Pay is calculated under the FLSA regulations which can be found here: https://www.dol.gov/agencies/whd/fact-sheets/56a-regular-rate
- Required Posting – Employers will be required to post an approved notice regarding the Act in a conspicuous place. The poster can be found via this link:
The FAQ regarding the posting requirements can be found here: https://www.dol.gov/agencies/whd/pandemic/ffcra-poster-questions
- Employee Protection – Employers cannot take any retaliatory action against an employee who takes leave under the Act.
- Compliance Penalties- Employers will be subject to FLSA penalties for failing to comply with the Act, but there is a 30-day penalty moratorium as long as the violation is not willful.
- Available Tax Credits.
- The Act provides for a limited refundable employment tax credit equal to the amount that an employer pays to an employee under the Act.
- Those amounts are increased by the amount of nontaxable health insurance premiums paid by the employer for employees who are out on paid leave under the Act increased by the amount of Medicare tax owed by the employer.
- Further details regarding the credits are forthcoming.
Emergency Family and Medical Leave Expansion Act (the “E-FMLA”).
In addition to the Emergency Paid Sick Time Act, the Families First Coronavirus Response Act also contains expanded leave under FMLA. The E-FMLA expands the protections of the Family and Medical Leave Act to add Public Health Emergency Leave.
- Covered Employers: All employers with fewer than 500 employees will be required to provide the COVID-19 related leave. Employers with over 500 employees still have the same obligations under the FMLA as before, but not to provide the expanded COVID-19-specific leave.
- Eligible Employees: An employee is eligible for E-FMLA if the employee seeking leave has been employed for at least 30 calendar days (before the first day of leave).
- Exempt Employers: Employers of health care provider or emergency responder employees may exempt those employees from coverage.
- Qualifying Reasons for Leave
Emergency FMLA leave is available under these amendments if a qualifying employee is unable to work (or telework) due to a need to care for a child under 18 years of age if:
- The child’s school or place of care has been closed, or
- Their child care provider is unavailable due to a public health emergency involving COVID-19 and declared by a federal, state or local authority
- Pay During Leave
- The first 10 days (two weeks) of E-FMLA are unpaid, but an employee may elect (and an employer may require an employee) to substitute any accrued vacation, personal leave, or medical or sick leave for unpaid leave.
- Emergency Paid Sick Time Act leave may also be used.
- After 10 days, employers shall provide partial paid leave at an amount that is not less than two-thirds of an employee’s regular rate of pay for the number of hours the employee would otherwise be scheduled to work.
- For employees who have weekly working hours that fluctuate, the employer is allowed to take an average over a six-month period.
- Not exceed $200 per day and $10,000 in the aggregate.
- Job Restoration
- FMLA’s standard job restoration requirements will apply to employers with 25 or more employees.
- For employers who employ fewer than 25 employees, job restoration is not required if all the following conditions are met:
- The employee takes E-FMLA
- The position held by the employee does not exist due to economic conditions or other changes in operating conditions.
- The employer makes reasonable efforts to restore the employee to an equivalent position
- If no equivalent positions are available at the time, the employer must attempt to contact the employee if an equivalent position becomes available in the next year.
- Exemptions and Special Treatment
- The Secretary of Labor has the authority to exempt certain employers, including health care providers, emergency responders, and businesses with under 50 employees.
- Exemptions will be granted only if the leave requirement would jeopardize the business as an ongoing concern. We are still awaiting the regulations on how that will be determined.
- Employers with fewer than 50 employees cannot be sued for violations of the E-FMLA provisions.
- Tax Credits
- As with the Emergency Paid Sick Time Act, employers may claim a limited refundable employment tax credit equal to payments made to employees for E-FMLA leave, subject to a maximum per employee of $200 for each day of qualifying leave up to $10,000 per employee for the year.
- Also like the credit for Emergency Paid Sick Time benefits, those amounts are increased by the amount of nontaxable health insurance premiums paid by the employer for employees who are out on E-FMLA Leave, for the days of leave, and further increased by the amount of Medicare tax owed by the employer with respect to the E-FMLA leave payments.
- The employer’s total available credit amount is also added to its income for the year.
- Unlike the credit for Paid Sick Time, however, there is already a general business credit available to certain employers who provide paid FMLA leave, and the new E-FMLA credit is not allowed with respect to any wages for which the general business credit is allowed (“double dipping” is not permitted).
The Wage and Hour Division will be taking comments through March 29, 2020 on both leave provisions on its website. You may participate in the comments via the following link: https://ffcra.ideascale.com
The State of South Dakota Department of Labor has also updated its COVID-19 resources. There are links to items related to Reemployment Assistance (formerly unemployment insurance), workers’ compensation and other matters. These may help you and your employees as we work through some of the state and local matters.
If employees are going to be placed on leave or FMLA leave do make sure that you have determined how benefits such as health insurance, voluntary insurance options, retirement contributions, etc. will be addressed. This is also the case if employees will be placed on furlough (temporary reduction of hours/schedule) or laid off. Most health plans are now issuing special guidance on how eligibility will be impacted by COVID-19 related items. Please make sure that you have looked at these issues before you make decisions on how to proceed.
The EEOC announced that it will view employers taking the temperature of employees as a permitted medical exam. Thus, if you wish to take the temperature of employees to ensure that they are not running a fever at the time they are at work it can be done. However, you must have the necessary equipment to do this including the PPE for the person taking the temperatures. Any employee who is running a fever or displaying other symptoms can be sent home pursuant to CDC guidelines.
I-9 Document Review
In light of social distancing precautions related to COVID-19, the requirement to review an employee’s I-9 documents in the employee’s presence have been relaxed. However, the documents must still be reviewed remotely (via video, fax or email).
Employers must insert “COVID-19” as the reason for the personal inspection delay. Once practicable employers must actually conduct the personal inspection and should add a notation on the I-9 “Personal inspection completed on ______(date)” in the Additional Information field.
All other requirements of the I-9 process remain in place, and these relaxed provisions are only in place for 60 days or three (3) days after the end of the National Emergency, whichever comes first.
Minnesota Shelter In Place
On March 25, 2020, Governor Walz issued an executive order requiring Minnesota residents to stay home except to perform any of the following activities, and while doing so, they should practice social distancing:
- Health and safety activities, such as obtaining emergency services or medical supplies
- Outdoor activities, such as walking, hiking, running, biking, hunting, or fishing
- Necessary Supplies and Services, such as getting groceries, gasoline, or carry-out
- Essential and interstate travel, such as returning to a home from outside this state
- Care of others, such as caring for a family member, friend, or pet in another household
- Displacement, such as moving between emergency shelters if you are without a home
- Relocation to ensure safety, such as relocating to a different location if your home has been unsafe due to domestic violence, sanitation, or essential operations reasons
- Tribal activities and lands, such as activities by members within the boundaries of their tribal reservation
Employees who are in an excepted business may also travel to and from work and daycare facilities as needed. The full of businesses that are deemed critical and exempted from the order can be found in the Executive Order.
The Order is to remain in place through at least April 10, 2020. If you have employees who work in Minnesota or who reside in Minnesota and work in another state, please look to see how this may impact their movements.