Tag Archives: Coronavirus

Tracy Emmerich | April 2, 2020

 

Information and Resources to Empower Employers

During the COVID-19 Pandemic

During the current coronavirus pandemic, every day brings new data, concerns, and challenges regarding the spread of the virus, government messaging and directives, and economic and social impacts. Throughout, Leap Solutions remains dedicated to keeping our clients informed and empowered by delivering relevant, up-to-the-minute information and resources calmly, quickly and responsibly.

Our HR specialists are here to help you get a handle on the complexities of ever-changing guidelines, programs and legislation that may directly impact you and your employees as well as work with you to come up with practical solutions and smart planning decisions for your organization’s immediate, near and long-term needs.

 

Furloughs, Layoffs, Terminations

Decisions for Business Owners during the Coronavirus

There are many ways for a relationship between an employer and an employee to end. Layoff, Furlough, Reduction in Force or Discharged?  What do they all mean?

A lay-off is due to conditions that are out of the employee’s control, such as a lack of work or the company’s financial situation. Sometimes, being laid off means that you still have a chance to be employed again if conditions improve. A layoff is a separation from payroll and employees are typically able to collect unemployment benefits while on an unpaid layoff.  The employee should receive their final paycheck, including all accrued vacation/paid time off (PTO), on the date the employee is laid off.

A furlough (temporary layoff) is considered to be an alternative to layoff. When an employer furloughs its employees, it requires them to work fewer hours or to take a certain amount of unpaid time off, but the individual remains an employee. Any wages owed are paid on the regular pay dates.  A furloughed employee may apply for unemployment for missed work hours. A furloughed employee will not be eligible for the expanded FMLA paid leave and paid sick leave when Families First goes into effect on April 1, 2020, until work becomes available.

A reduction in force (RIF) occurs when a position is eliminated without the intention of replacing it and involves a permanent cut in headcount.  A layoff may turn into a RIF or the employer may choose to immediately reduce their workforce.  The employee should receive their final paycheck, including all accrued vacation/ PTO, on the date of termination.

A discharge happens regardless of the financial situation of a company. Depending on the reason for the discharge, it can be permanent. A discharge can be done by an employer or employee depending on its type.  Final pay, including vacation/PTO, is required on the employee’s last day of work.

  • Voluntary discharge: Voluntary discharge means the employee resigns from a job. Life events that can lead to voluntary discharge include retirement, education, starting a new job, relocation or a medical condition. Employers should request a resignation letter from the employee.
  • Involuntary discharge: Involuntary discharge means that an employer dismisses an employee from the company. Usually, the employee will receive a termination letter. An employer may choose to release an employee for reasons such as misconduct or unsatisfactory completion of job responsibilities.
  • Mutual agreement: A mutual agreement is shared between an employer and an employee. In this case, the employee agrees to exercise the at-will clause in their employment agreement.

 

 California WARN Act

The California Worker Adjustment and Retraining Notification (WARN) Act requires most employers with 75 or more employees to provide 60 calendar-day advance notification of plant closings and mass layoffs.  A mass layoff is defined under the California WARN Act as

  • The elimination of fifty (50) or more jobs during any thirty (30)-day period, due to lack of work or lack of funds.
  • A relocation means moving all or substantially all of the commercial or industrial operations at a given location to a new location at least one hundred (100) miles away.
  • A termination (plant closure) means the cessation or substantial cessation of industrial or commercial operations.

On March 17, 2020, Governor Gavin Newsom issued Executive Order N-31-20 which only suspends the California WARN Act’s 60-day notice requirement for those employers that satisfy the Order’s specific conditions.  An employer seeking to rely on the Executive Order’s suspension of the California WARN Act’s 60-day advance notice requirement must satisfy the following three conditions:

  1. The employer’s mass layoff, relocation or termination must be caused by COVID-19-related “business circumstances that were not reasonably foreseeable at the time that notice would have been required.”
  2. The employer must provide written notices to:
      • Employees affected by the mass layoff, relocation or termination;
      • The EDD; the Local Workforce Development Board; and the chief elected official of each city and county government within which the termination, relocation, or mass layoff occurs.
  3. The employer must provide written notice that satisfies the following requirements:
    • Give as much notice as is practicable (e., reasonably possible) at the time notice is given.
    • Provide a brief statement as to why the 60-day notification period could not be met. Include the following information in the notice to each affected employee:
      • A statement as to whether the planned action is expected to be permanent or temporary and, if the entire location is to be closed, a statement to that effect
      • The expected date when the plant closing or mass layoff will commence and the expected date when the individual employee will be separated
  • An indication whether or not bumping rights exist
  1. The name and telephone number of a company official to contact for further information
  2. The following statement: “If you have lost your job or been laid off temporarily, you may be eligible for Unemployment Insurance (UI). More information on UI and other resources available for workers is available at labor.ca.gov/coronavirus2019.”
  3. The notice may include additional information useful to the employees such as, if the planned action is expected to be temporary, the estimated duration, if known.
  1. Include the following information in the notices separately provided to the EDD, the Local Workforce Development Board, and the chief elected official of each city and county government within which the termination, relocation, or mass layoff occurs:
    1. Name and address of the employment site where the closing or mass layoff will occur.
    2. Name and phone number of a company official to contact for further information.
    3. A statement as to whether the planned action is expected to be permanent or temporary and, if the entire location is to be closed, a statement to that effect.
    4. Expected date of the first separation, and the anticipated schedule for subsequent separations.
    5. Job titles of positions to be affected, and the number of employees to be laid off in each job classification.
    6. In the case of layoffs occurring at multiple locations, a breakdown of the number and job titles of affected employees at each location.
    7. An indication as to whether or not bumping rights exist.
    8. Name of each union representing affected employees, if any.
    9. Name and address of the chief elected officer of each union, if applicable.
    10. The notice may include additional information useful to the employees such as, if the planned action is expected to be temporary, the estimated duration, if known.

Additional information and other resources are available at Labor & Workforce Development Agency – Coronavirus 2019 (COVID-19) Resources for Employers and Workers.

What are the implications for employers regarding the Families First Coronavirus Response Act as it relates to furloughs, layoffs, reduction in force, or discharge?

Prior to April 1, 2020

Employers who were forced to close their business made a decision to set their employees up to work from home or if that was not an option they sent their employees home to shelter in place.  Employers who could not provide teleworking should have provided their employees with a letter or  Change in Reporting Relationship letting them know which employment action (see above) was taken.  Employers should also check in with their broker/insurance company to see how benefits can be handled during the shelter in place if employees are not able to work the required number of hours to maintain benefits. Employees who were laid off or furloughed with no hours are not eligible for the new paid sick leave or the Expanded Family and Medical Leave as this does not go into effect until April 1, 2020.

Employees should apply for unemployment benefits as soon as the employee was sent home as the one week waiting period has been waived.  For faster and more convenient access to those services, employees are encouraged to use the online options. For more information please read How to Set Up a UI Online Account (DE 2338H) (PDF) to help you apply for benefits. 

 

After April 1, 2020

After April 1, 2020, any employee still working, even if working reduced hours will be eligible for the new paid sick leave under the Emergency Paid Sick Leave Act and the Expanded Family and Medical Leave under the Emergency Family and Medical Leave Expansion Act.  An employee laid off or furloughed with no scheduled hours would no longer be eligible for the paid sick leave or the expanded family and medical leave until working hours become available.

 

Unemployment Benefits 

Unemployment Insurance is a joint state-federal program that provides cash benefits to eligible workers who are unemployed through no fault of their own. In general, benefits are based on a percentage of the employee’s earnings over a recent 52-week period.  Typically, there is a one-week waiting period for individuals obtaining unemployment insurance; however, the Governor’s Emergency Proclamations waives the non-payable one-week waiting period to eligible individuals affected by the current COVID-19 disaster. Also, The Coronavirus Aid, Relief, and Economic Security (CARES) Act includes a significant expansion of unemployment benefits that would extend jobless insurance payments by 13 weeks. CA weekly UI benefit amount can range from $40 to $450 per week.  CARES also includes a temporary four-month enhancement of benefits (ends July 31, 2020), called Federal Pandemic Unemployment Compensation (FPUC), which would boost the maximum unemployment benefit by $600 per week in addition to, and in the same timeframe as, regular state or federal unemployment benefits.

The CARES Act also extends unemployment insurance to workers who usually aren’t eligible for such benefits at the state level—so long as their unemployment is connected to the coronavirus outbreak. Those who will now be eligible include part-time employees, freelancers, independent contractors, gig workers, and the self-employed.

In addition to full unemployment benefits, employers may also be eligible for other state programs:

Partial claims

Partial claims are for employees whose employers want to keep them when there is a lack of work. A partial Unemployment Insurance claim can be used for any claimant who works less than their normal full-time hours, and whose employers want to keep them.  Employers should download Notice of Reduced Earnings (DE 2063) (PDF), complete the top section.  These forms need to be done on a weekly bases, Sunday – Saturday regardless of your payroll schedule.  Once completed, the employer should forward the form to their employees to complete the claim and submit it to EDD.  For more information, visit Partial Claims.

Work Sharing Program

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.  To participate, employers must meet all of the following requirements:

  • Be a legally registered business in California.
  • Have an active California State Employer Account Number.
  • At least 10 percent 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.
  • Retirement benefits must meet the same terms and conditions as before, or they must meet the same as other employees 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.
  • 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.

Restrictions

  • Leased, intermittent, seasonal, or temporary service employees cannot participate in the Work Sharing Program.
  • Corporate officers or major stockholders with investment in the company cannot participate in the Work Sharing Program.
  • The Work Sharing Program cannot be used as a transition to a layoff.

For more information, visit Work Sharing.

If your business is directly affected by COVID-19, you can request up to a 60-day extension to file your state payroll reports and deposit state payroll taxes without penalty or interest. Include the impact of COVID-19 in your written request for the extension. Your request must be received within 60 days from the original past-due date of the payment or return.

Healthcare Coverage during the Coronavirus

Employers may be looking to reduce employee hours or mandate time off for (i.e. furlough) a part of their workforce due to the economic impact of the coronavirus (also known as COVID-19).

Employers may want to continue providing benefits for these employees; however, the issue an employer may face is that their benefit plan documents usually require employees to be “actively at work” and working full-time hours (e.g. 30) to be covered by the benefit plans. This means that employees who have their hours reduced or who are furloughed (even temporarily) will not be active full-time and will often have their benefits terminated after a period of time.

Employers should take the following steps to ensure compliance with their health and welfare benefit plans when providing benefits continuation:

  • Review plan documents to determine requirements regarding employee eligibility and benefits continuation during unpaid/unprotected leaves of absence;
  • Consider the need to amend any plan documents to accommodate new eligibility requirements (including any furlough benefits continuation policy) upon approval from all relevant carriers;
  • Communicate any new requirements to employees via either a summary of the plan modification or by updating the eligibility rules in your wrap summary plan description (if approved by all relevant carriers); and
  • Provide COBRA continuation coverage to employees who lose coverage due to a COBRA qualifying event.

For instance, your insurance plan may have a 30-day grace period when someone is not working full-time or a shift in their work status. What options are available after April 30, 2020? This is a key question to ask your insurance provider to ensure your employees either have coverage or can be provided COBRA continuation, which applies for employers with 20 or more employees. If less than 20 employees, Covered California may be the best option.

Regarding employer payment of health care insurance premiums, as of March 18, 2020, the State of California has requested that all insurance companies provide their insureds with at least a 60-day grace period to pay insurance premiums, so insurance policies are not canceled for nonpayment of premium.

  • Applies to all admitted and non-admitted insurance companies that provide any insurance coverage in California.
  • Requests that all insurance agents, brokers, and other licensees take steps to ensure customers can make prompt insurance payments.

 

Covered California

In the great news category for individuals finding themselves without medical coverage during the coronavirus, the State of California has reopened enrollment for Covered CA through June 30, 2020. Go to https://www.coveredca.com/individuals-and-families/getting-covered/special-enrollment/ for important information on what is available to Californians.

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Leap Solutions is always here and ready to support you as you support your employees during these unprecedented times. Together, we can confidently address the issues and concerns at top of mind and respond to this continually evolving situation from a place of assuredness and strength.

 

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Scott Ormerod | March 20, 2020

On March 18, 2020, President Trump signed legislation extending paid sick leave and paid family leave benefits to millions of Americans to slow the spread of the COVID-19 pandemic.  This legislation contains the Emergency Paid Sick Leave Act and the Emergency Family and Medical Leave Expansion Act, both of which become effective on April 2, 2020. The Act applies to employers with 1 to 499 employees. Employers with 500 or more employees do not have to comply with this law. The Act expires on December 31, 2020.

The Act covers numerous activities including free testing for the virus, unemployment aid, nutritional programs, paid sick leave, and changes to FMLA. We will cover in detail the leave sections of the Act.

 

Emergency Paid Sick Leave Act

The Emergency Paid Sick Leave Act mandates that covered employers nationwide provide two weeks of paid sick leave to employees.

 

Coverage

Employers with fewer than 500 employees are required to provide paid sick leave in accordance with the new law.  Small businesses with fewer than 50 employees are exempt, however, if providing sick leave would “jeopardize the viability of the business.”  The Secretary of Labor has been tasked with issuing regulations explaining how and under what circumstances that standard is met, although guidance on the subject has not yet been offered.

 

Eligibility and Permissible Uses

Employees are entitled to use paid sick leave under the following circumstances, regardless of how long they have been employed:

  1. The employee is subject to a Federal, State, or local quarantine or isolation order related to COVID-19.
  2. The employee has been advised by a health care provider to self-quarantine due to concerns related to COVID-19.
  3. The employee is experiencing symptoms of COVID-19 and is seeking a medical diagnosis.
  4. The employee is caring for an individual who is subject to an order as described in subparagraph (1) or has been advised as described in paragraph (2), above.
  5. The employee is caring for a son or daughter whose school or place of care has been closed, or whose child care provider is unavailable, due to COVID-19 precautions.
  6. The employee is experiencing any 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.

 

Notably, if an employee is a healthcare provider or first responder, the employer may elect to exclude the employee from these sick leave benefits.

An employee may not be required to use other forms of paid time off before using paid sick leave under the Emergency Paid Sick Leave Act, nor may an employer require that an employee find coverage as a condition of providing sick leave.

 

Amount of Leave

Full-time employees are entitled to 80 hours of paid sick leave.  Part-time employees are entitled to paid sick leave in an amount equal to the hours that particular employee works, on average, over a two-week period.

The benefit is available to any employee no matter how long they have been employed. Note that the calculations are based on an employee’s “regular rate” as defined by the FLSA, which may be greater than an employee’s base hourly rate if they also are paid certain types of additional compensation.

 

TABLE 1: Eligibility, Permissible Uses, and Compensation Owed

Covered Reason For Leave Rate of Pay Cap on Payments
(1) The employee is subject to a Federal, State, or local quarantine or isolation order related to COVID–19 The employee’s regular rate of pay (as determined under section 7(e) of the Fair Labor Standards Act of 1938 (29 U.S.C. 207(e)). $511 per day and $5,110 in the aggregate
(2) The employee has been advised by a health care provider to self-quarantine due to concerns related to COVID–19 The employee’s regular rate of pay (as determined under section 7(e) of the Fair Labor Standards Act of 1938 (29 U.S.C. 207(e)). $511 per day and $5,110 in the aggregate
(3) The employee is experiencing symptoms of COVID–19 and seeking a medical diagnosis. The employee’s regular rate of pay (as determined under section 7(e) of the Fair Labor Standards Act of 1938 (29 U.S.C. 207(e)). $511 per day and $5,110 in the aggregate
(4) The employee is caring for an individual who is subject to an order as described in subparagraph (1) or has been advised as described in paragraph (2). Two-thirds of the employee’s regular rate of pay. $200 per day and $2,000 in the aggregate
(5) The employee is caring for a son or daughter of such employee if the school or place of care of the son or daughter has been closed, or the child care provider of such son or daughter is unavailable, due to COVID–19 precautions. Two-thirds of the employee’s regular rate of pay. $200 per day and $2,000 in the aggregate
(6) The employee is experiencing any 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. Two-thirds of the employee’s regular rate of pay. $200 per day and $2,000 in the aggregate
  • Unused paid sick leave does not carry over from one year to the next.
  • Unused paid sick leave need not be paid out upon separation from employment.
  • The employer may not require the employee to search for or find a replacement in order to receive paid sick time under the Act.
  • Paid sick time is available for immediate use regardless of how long the employee has been employed.
  • The employee may use paid sick time under the Act before using any other accrued paid time off.
  • Emergency paid sick time is in addition to any paid time entitlement under the employer’s existing paid time off policy. The employer may not change its paid leave policies on or after the date of the Act’s enactment to avoid providing the additional two weeks of emergency paid sick time.
  • Employers who are voluntarily providing paid sick benefits related to COVID-19 public health emergency should contact employment counsel before changing any currently running policies.

 

Notice

Employers must post, in a conspicuous place a notice promulgated by the Secretary of Labor regarding the requirements of the Emergency Paid Sick Leave Act.  A model of such notice must be made available by the Secretary within 7 days of the enactment of the statute.  Employers are encouraged to check the U.S. Department of Labor website for a model posting once it becomes available.

 

Consequences for Violation of Sick Leave Rights

An employer may not discharge, discipline, or discriminate against an employee who takes leave under the Act, files a complaint or institutes any proceeding relating to this Act, or testifies (or is about to testify) in any such proceeding.

Violations of an employee’s right to sick leave under the Emergency Paid Sick Leave Act will be considered violations of the Fair Labor Standards Act’s minimum wage provisions.

 

Interaction with California State and Local Laws

The Emergency Paid Sick Leave Act specifies that it does not diminish the rights or benefits to which an employee is entitled under any other laws (whether Federal, State, or local), collective bargaining agreements (“CBAs”), or existing employer policies.  A critical ambiguity in the law as enacted is whether this provision means that benefits under the Emergency Paid Sick Leave Act run concurrently with existing laws, CBAs, and policies, or whether the new federal benefits are in addition to existing benefits.  That is, the statute does not clearly answer whether a full-time employee who is already entitled, for example, to 24 hours of paid sick leave under the California Healthy Workplaces, Healthy Families Act of 2014 is now entitled to a total of 104 hours of paid sick leave (24 hours under California law plus 80 hours under federal law), or only to a total of 80 hours per the federal statute.

Prior proposed versions of the bill specified that the federal benefits were in addition to any benefits already provided by employers (whether on a mandatory or voluntary basis), yet such language was stricken before the Senate’s approval of the final bill.  The removal suggests federal sick leave benefits are therefore intended to run concurrently with existing benefits, but employers will likely have to wait for supplemental legislation or regulatory guidance for clarification.

 

Tax Credits for Sick Leave Wages

Employers may obtain tax credits to ease the financial burden of providing sick leave under the Emergency Paid Sick Leave Act.  The tax credit is applied against the employer portion of Social Security taxes.  The credit is equal to 100% of the qualified sick leave wages.  Such wages are capped at $511 per day if the leave is for the employee’s own care, and at $200 per day if the leave is for caring for a family member, for up to 10 days per employee in each calendar quarter.

 

Emergency Family and Medical Leave Expansion Act

 

The Emergency Family and Medical Leave Expansion Act amends the Family and Medical Leave Act (“FMLA”) to add an additional basis for taking job-protected leave.  Generally, the FMLA permits eligible employees of covered employers to take unpaid leave because of the employee’s own serious health condition, the serious health condition of the employee’s parent, spouse, or child, to bond with a child newly joining the employee’s family, for qualifying military exigencies, or to care for family members injured in the course of military service.

 

Coverage and Eligibility

Employers with fewer than 500 employees are covered by the new law and must permit eligible employees to take public health emergency leave.  Like the Emergency Paid Sick Leave Act, businesses with fewer than 50 employees may obtain an exemption if providing leave would “jeopardize the viability of the business.”

Unlike the FMLA coverage requirements for other types of leave (employers with 50 or more employees within a 75-mile radius), ALL employers with fewer than 500 employees must grant public health emergency leave to anyone who has been employed for at least 30 calendar days. The usual FMLA requirements that an employee has been employed or at least 12 months and worked 1,250 hours do not apply to public health emergency leave.

The Act creates certain exemptions and exceptions for small employers that would normally be covered by the FMLA and allows health care providers and emergency responders to exclude those employees from leave under the Act.

The Act reserves the right of the Secretary of Labor to promulgate regulations excluding “certain health care providers and emergency responders” from the definition of “eligible employee.”

 

Duration of Leave and Permissible Use

Under the Emergency Family and Medical Leave Expansion Act, eligible employees can take up to 12 weeks of job-protected leave in a 12-month period if they are unable to work (or telework) due to a need to care for a child whose school or place of care has been closed, or whose child care provider is unavailable, due to the COVID-19 public health emergency.

As with other types of FMLA leave, the employee must provide notice of the need for leave as soon as is practicable.

 

Compensation Owed

The first 10 days of public health emergency leave may be unpaid.  However, an employee may choose to substitute any accrued vacation, personal leave, or medical or sick leave for such unpaid leave under the employer’s policy. The employer may not require the employee to use their paid leave. The remaining 10 weeks of leave must be paid at two-thirds of the employee’s regular rate of pay times the number of hours the employee would otherwise be normally scheduled to work. Qualified family leave wages are capped at $200 per day for each individual and up to $10,000 per calendar quarter. For perspective, the per-day cap would usually kick in for employees making more than $78,000 per year.

 

Restoration Rights

Unless the employer has fewer than 25 employees, an employee taking public health emergency leave must generally be restored to an equivalent position upon returning from leave. For employers with less than 25 employees, the employer must make reasonable efforts to provide the employee with a position or an equivalent position for 1 year after the “public health emergency” concludes or 12 weeks after commencement of the leave, whichever is earlier.

 

Sunset Provision

Because the Emergency Family and Medical Leave Expansion Act is intended to address the existing COVID-19 pandemic, eligible employees of covered employers may only take public health emergency leave until December 31, 2020.

 

Tax Credits for Public Health Emergency Leave

Employers are entitled to a tax credit equal to 100% of the qualified family leave wages under the Emergency Family and Medical Leave Expansion Act.

The Act is not retroactive, which means that any paid time currently being granted would not count toward either FMLA leave or toward the 80 hours of sick leave, nor be eligible for the tax credits.

We encourage you to continue proactively communicating with your employees to keep them abreast of any developments regarding company operations as well as any updates to government programs in support of them and their families. At a minimum, daily communication on emerging issues and developments with your employees will go a long way to provide care and attention to the workforce. This Act will be good news for all your employees, and we suggest you create a brief synopsis of the Act to share with them.

Finally, over the last number of days, we’ve had many questions from clients about some specific areas that are not yet clear based upon the rapid developments both nationally and state-wide. We will keep you informed with additional newsletter releases when the facts become clear. The bottom line, be fair, kind, and considerate of your employees. They are adapting to so much and as employers, your employees need your support.

 

In the meantime, be safe, take care of yourselves and your families, reach out to us with questions and concerns, and—most importantly—know that we at Leap Solutions Group are here to partner with you to face these unsettling times, work through them with flexibility and resilience, and come out the other side stronger than ever.

 

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