Employers and public agencies utilize contracts in many ways with a variety of parties. In addition to employment contracts and collective bargaining agreements, many employers also enter into contracts with third-party vendors to provide specialized services. Unfortunately, many existing contracts failed to contemplate pandemic events such as COVID-19, which has left many employers with uncertainty regarding payment and performance obligations during state-wide closures. The present situation provides an opportunity to review contracts and to consider incorporating certain protections into future agreements.

The most commonly discussed contract clause during the COVID-19 pandemic has been the force majeure clause. Typically, this clause relieves parties from their contractual obligations if an unforeseeable and uncontrollable event occurs. These events are sometimes referred to as “acts of God.” However, simply inserting a general force majeure clause into a contract will not be enough to protect an employer against a pandemic such as COVID-19. Rather, New York courts have held that a force majeure clause must include the specific event that is claimed to have prevented performance [Phibro Energy, Inc. v. Empresa de Polimeros de Sines Sarl, 720 F. Supp. 312, 318 (S.D.N.Y. 1989)]. In addition, New York courts have limited catchall provisions in force majeure clauses. In a decades-old decision, the Appellate Division, First Department applied the principle of ejusdem generis to catchall language in a force majeure clause, stating that “where certain things are enumerated, and such enumeration is followed or coupled with a general description, such general description is commonly understood to cover only things [of the same kind or nature] with the particular things mentioned” [Krulewitch v. National Importing & Trading Co., 195 A.D. 544, 546 (1st Dep’t 1921)]. Thus, a force majeure clause in New York must specifically list events such as epidemics, pandemics, serious diseases, and quarantines to adequately protect against a situation like COVID-19.

A well-drafted force majeure clause should have language to account for acts of government or measures of governmental authority. This will be particularly relevant where a pandemic event results in a shutdown At the state or local level, or the Governor or a Mayor issues an Executive Order that affects the terms of an agreement.

There are other useful unforeseen events that employers should consider incorporating into a force majeure clause. If an employer has concerns about a potential lack of communication, a force majeure clause can be written to require affected parties to provide notice to one another. Alternatively, an employer may wish to insert language requiring a party to mitigate the effect of a force majeure event to the greatest extent practicable, to limit the potential hardship of a future catastrophe. Employers should be aware that the mere existence of a qualifying event in a force majeure clause will not be enough to relieve the parties of their obligations. The United States Supreme Court has held that the event must not only be specifically listed, but must also be unforeseeable [United States v. Brooks-Callaway Co., 318 U.S. 120, 122-123 (1943)]. In other words, if an event is foreseeable and the parties can adequately prepare themselves in advance, a force majeure clause will not be triggered.

While force majeure clauses are one of the most important protective measures for employers to implement, other protections should also be considered. One of the lessons that COVID-19 has taught us is that there may be unanticipated costs related to the response effort of a pandemic. Additionally, governmental action and Executive Orders may contain language which would require employers to violate the terms of existing agreements. There are creative measures which employers can take to address these issues in future agreements. For instance, compliance clauses may provide that the terms of an agreement will be superseded by conflicting laws, including Executive Orders. Furthermore, contracts may include language that places the burden of paying for any necessary unanticipated equipment (i.e., protective masks or gloves) on the other party.

COVID-19 has been an unprecedented situation to navigate, but by anticipating potential issues and revising agreements accordingly, employers can rest assured they will be better prepared if another pandemic ever arises.

On April 22, 2020, during the first-ever remote hearing of the New York City Council (Council), several bills were introduced relating to employment matters and the COVID-19 pandemic. These bills, which have been referred to as the “Essential Workers Bill of Rights,” were sent to committees for further hearings. It is expected that the Council will vote on them in the coming weeks.

This post contains summarizes the pending legislation in its current form.

Job Protection for Essential Workers

Int. 1923-2020 would prohibit employers from terminating, suspending or reducing the hours of essential employees without just cause.

If passed, the law will be enforced through administrative proceedings before the Office of Labor Standards (OLS) or private lawsuits or arbitrations brought by employees. In all cases, the employer bears the burden of proving “just cause” by a preponderance of the evidence. The employer must show that there was “sufficient cause for discharging an essential employee, such as the employee’s failure to satisfactorily perform job duties or employee misconduct that is demonstrably and materially harmful to the essential employer’s business interests.” In determining whether this standard is met, the fact finder must consider the following, in addition to “any other relevant factors”:

  1. Whether the essential employee knew or should have known of the essential employer’s policy, rule or practice;
  2. Whether the essential employer provided relevant and adequate training to the essential employee;
  3. Whether the essential employer’s policy, rule or practice was reasonable and applied consistently; and
  4. Whether the essential employer undertook a fair and objective investigation.

The bill states that there cannot be just cause for termination unless the employer first resorted to progressive discipline. However, confusingly, the bill’s definition of progressive discipline states that “[n]othing herein shall preclude an essential employer from terminating an essential employee immediately for a failure or misconduct constituting just cause.” We expect that this apparent contradiction will be addressed during the upcoming committee hearings.

Within one week of terminating an essential employee, the employer shall provide him or her with a written explanation of the precise reasons for the termination “including non-hearsay evidence.” According to the bill, the ultimate fact finder may not consider reasons for termination except those stated in the employer’s writing.

If enacted, an employer who violates the law will be liable for the employee’s attorneys’ fees and costs in addition to compensatory damages. The bill also provides for the imposition of civil penalties and an order directing an employer to comply with the law.

Hazard Pay for Essential Workers

Int. 1918-2020 would obligate large employers to pay premiums to certain essential workers that are paid hourly. Specifically, the bill requires essential businesses with 100 or more workers to pay essential workers a premium of $30 for any shift of less than four hours, $60 for any shift of between four and eight hours, inclusive, and $75 for any shift of greater than eight hours.

Businesses covered by this bill include those deemed essential by Governor Cuomo’s Executive Order 202.6, except those that are assigned a NAICS code beginning with 531.

In determining whether a business is large enough to be obligated to pay the required premium, it generally must count all persons performing work for compensation on a full-time, part-time or temporary basis in a given week. Where the number of persons who work for the business fluctuates regularly, the business’ size for 2020 will be equal to the average number of persons who worked per week during 2019.

The bill specifically addresses how a “chain business” must count employees. A chain business is one that is part of a group of establishments that share a common owner or principal who owns at least 30 percent of each establishment where those establishments (i) engage in the same business or (ii) operate pursuant to franchise agreements with the same franchisor as defined in General Business Law § 681. Such a business must count the total number of employees in its group of establishments to determine whether the law applies.

The bill would prohibit anyone from retaliating against an essential employee for exercising his or her right to be paid a premium. It also requires any covered employer, within five days of the law’s enactment, to conspicuously post a notice at any place where essential employees work describing their rights under the law. The notice must be in English and any language spoken as a primary language by at least five percent of the employees at that location.

The bill would also require employers to keep records of their compliance with its provisions for three years.

Expansion of Workers Eligible for Sick and Safe Time

Int. 1926-2020 proposes to amend the New York City Earned Safe and Sick Time Act to extend paid leave to workers that are currently considered ineligible. The bill creates a presumption that a worker is an employee that is entitled to paid leave if he or she provides labor or services within New York City for more than 80 hours in a calendar year, unless the hiring entity can prove that all of these conditions are met:

  1. The person is free from the control and direction of the hiring entity in connection with the performance of labor or services, both under his or her contract and in practice;
  2. The person performs labor or services that are outside the usual course of the hiring entity’s business; and
  3. The person is customarily engaged in an independently established trade or business of the same type as the labor or services that he or she is performing for the hiring entity.

The bill also states that it will not apply to:

  1. A person who performs work as part of a work experience program pursuant to Social Services Law § 336-c.
  2. A person who is employed by (i) the United States government; (ii) the state of New York, including any office, department, independent agency, authority, institution, association, society or other body of the state including the legislature and the judiciary; or (iii) the city of New York or any local government, municipality or county or any entity governed by General Municipal Law § 92 or County Law § 207.
  3. A person engaged in a work study program under 42 U.S.C. § 2753.
  4. A person compensated by or through a qualified scholarship as defined in 26 U.S.C. § 117.
  5. An independent contractor who does not qualify as an employee under the test described above.
  6. An hourly professional employee.

The bill would require employers to provide employees with a notice of their rights under the updated law within 60 days of its enactment.

Resolution Urging State Action Regarding Independent Contractor Classifications

In addition to considering the bills discussed above during its virtual hearing, the Council passed Resolution 1285-2020, which calls upon the New York Legislature to enact a law addressing the misclassification of workers as independent contractors. This Resolution notes that workers classified as independent contractors often lack access to health insurance, paid leave, overtime and other benefits, and that studies indicate that approximately 850,000 low-paid workers are improperly classified.

To address this issue as it relates to employees in the construction and commercial trucking industries, New York previously enacted the Construction Industry Fair Play Act (Labor Law Article 25-B), and the Commercial Goods Transportation Industry Fair Play Act (Labor Law Article 25-C). These laws create a presumption of employment that places the burden of proof on employers to classify workers as independent contractors. The Resolution urges the New York Legislature to require that the same standards be applied to all workers in this state.

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Employers only recently digested their obligations under newly enacted emergency paid leave at the state and federal levels. If the Essential Workers Bill of Rights is passed, employers in New York City will have even more studying to do. We will continue to provide real-time updates on the status of this pending legislation.

In a recent blog post, we provided an overview of New York State laws providing employees with leave under certain circumstances. In addition to these state laws, New York City and Westchester County have adopted their own leave laws. The following is a brief summary of these local laws; readers are advised to refer to the full text of the laws for a complete description of their terms. This post does not address the applicability of these laws to governmental entities or to domestic workers and their employers.

New York City Earned Safe and Sick Time Act

All employers located in New York City must provide paid safe/sick time if they employ five or more employees. Employers with fewer than five employees are not required to compensate employees for safe or sick leave but must otherwise comply with the Act by giving unpaid leave. Employees are eligible for paid safe or sick leave if they are employed within New York City for more than 80 hours in a calendar year and begin accruing safe/sick time on their first day of employment, but may not use accrued paid safe/sick time until 120 days after their employment commences.

Employers may require employees to submit “reasonable notice” of the need to use paid safe/sick leave. Reasonable notice means informing the employer up to seven days before the date the employee takes leave in cases where the need for leave is foreseeable, and as soon as is practicable where the need was not foreseeable. If an employee is absent for more than three consecutive days, the employer may require reasonable documentation that the time was used for an authorized purpose.

Employers must provide employees with written notice of their right to paid safe/sick leave when employment begins. The notice must in English and the primary language spoken by the employee, and inform the employee of the right to paid safe/sick leave free from retaliation. Employers are encouraged but not required to post workplace notices about the Act.

Safe leave is leave granted to an employee to seek assistance or take other safety measures if the employee or a family member (a broadly defined term)  is the victim of any act or threat of domestic violence or unwanted sexual contact, stalking, or human trafficking. Safe leave may be taken for any of the following reasons:

  • Obtaining services from a domestic violence shelter, rape crisis center, or other shelter or services program for relief from a family offense matter, sexual offense, stalking, or human trafficking.
  • Participating in safety planning, temporarily or permanently relocating, or taking other actions to increase the safety of the employee or employee’s family members from future family offense matters, sexual offenses, stalking, or human trafficking.
  • Meeting with a civil attorney or other social service provider to obtain information and advice on, and prepare for or participate in any criminal or civil proceeding, including but not limited to, matters related to a family offense matter, sexual offense, stalking, human trafficking, custody, visitation, matrimonial issues, orders of protection, immigration, housing, discrimination in employment, housing, or consumer credit.
  • Filing a complaint or domestic incident report with law enforcement.
  • Meeting with a district attorney’s office.
  • Enrolling children in a new school.
  • Taking other actions necessary to maintain, improve, or restore the physical, psychological, or economic health or safety of the employee or the employee’s family member or to protect those who associate or work with the employee.

Employees may use paid sick leave for caring for their own mental or physical illnesses, injuries, or health conditions, or for seeking medical diagnosis, treatment, or preventative medical care; for caring for a family member who needs medical diagnosis, treatment, or preventative medical care; or for caring for a child whose school or childcare provider is ordered closed because of a public health emergency. Employees may also use paid sick leave if their employer’s place of business is closed due to a public health emergency.

Employees accrue one hour of paid safe/sick time for every 30 hours of work, with a cap for usage and accrual of 40 hours per year. Employees may carry over up to 40 hours of unused paid or unpaid safe/sick leave into the next calendar year, but employers may cap the total number of hours used for paid leave at 40 hours per year. However, an employer is not required to allow for carryover of unused paid leave hours if the employer both compensates employees for any unused paid leave at the end of the year and provides employees with paid safe/sick leave on the first day of the next calendar year that either meets or exceeds the law’s requirements.

Employers generally must retain records documenting their compliance with the Act for at least three years. In addition, employers are required to keep confidential any health information about employees or their family members, as well as any information concerning an employee’s or an employee’s family member’s status or perceived status as a victim of family offenses, sexual offenses, stalking, or human trafficking, obtained under the Act unless disclosure is either permitted by the applicable employee or required by law.

For additional information, see the New York City Department of Consumer Affairs website.

New York City Temporary Changes to Work Schedules Law

All New York City employers must provide employees with up to two temporary schedule changes during a calendar year to accommodate personal events. A temporary schedule change means a limited alteration in work hours, times or locations, such as using paid time off, working remotely, swapping or shifting work hours, or using short-term unpaid leave. Employees are eligible for schedule changes if they are employed within New York City for more than 80 hours in a calendar year, and are not required to be provide a schedule change until 120 days after their employment commences.

Personal events covered by the law include the need for a caregiver to provide care to a minor child or care recipient, an employee’s need to attend a legal proceeding or hearing for subsistence benefits to which the employee, a family member, or the employee’s care recipient is a party, and any circumstance that would constitute a basis for permissible use of safe time or sick time under New York City’s Earned Safe and Sick Time Act (see above).

This law does not apply to employees who are covered by a valid collective bargaining agreement if that agreement waives the provisions of the law and addresses temporary changes to work schedules and employees who are employed by any employer whose primary business is the development, creation, or distribution of movies or television programs (with certain exceptions).

New York City Human Rights Law

Lactation/ Breast-feeding

Employers covered by the New York City Human Rights Law (NYCHRL) are required are required to develop and implement a written policy regarding the provision of a lactation room, to be distributed to all employees upon hiring. The policy must include a statement that employees have a right to request a lactation room, and identify a process by which employees may request a lactation room. The process must, among other things, state that the employer will provide reasonable break time for an employee to express breast milk pursuant to Section 206-c of the New York Labor Law. Employers are required to provide written notice of the right to be free from discrimination in relation to pregnancy, childbirth, and related medical conditions to new employees at the commencement of employment. Such notice may also be conspicuously posted at an employer’s place of business in an area accessible to employees. Model notices and policies, and resources with respect to this requirement of the NYCHRL, are available at the New York City Commission of Human Rights web site.

For the purposes of this provision of the NYCHRL, the term “employer” does not include any employer that has fewer than four persons in the employ of such employer at all times during the period beginning 12 months before the start of an unlawful discriminatory practice and continuing through the end of such unlawful discriminatory practice. For purposes of this definition, (i) natural persons working as independent contractors in furtherance of an employer’s business enterprise are counted as persons in the employ of such employer, and (ii) the employer’s parent, spouse, domestic partner or child if employed by the employer are included as in the employ of such employer.

Reasonable Accommodations

Under the NYCHRL, employers in New York City may have to allow employees with a disability to take leave as an accommodation under certain circumstances. As this can be a complicated issue in light of Federal and State laws on reasonable accommodations, please contact us if you have any questions regarding this aspect of the NYCHRL.

Westchester County Living Wage Incentive

Under the Westchester County Living Wage Incentive, a “covered employer” is any person that (1) is a party to a service contract; or (2) provides building services in connection with a County lease or County assistance, provided that the covered employer employs at least 15 full-time equivalent employees regardless of whether those employees are covered employees or not. A “service contract” is a contract between the County and a person or his or her subcontractor whereby the County is committed to expend funds for covered services which are provided to or on behalf of the County, and which involves an expenditure of $50,000.00 or more in any 12-month period. “Covered services” are custodial, janitorial or security guard services and personal care services provided by the Westchester County Department of Social Services under the county’s Medicaid Personal Care/Home Attendant programs.

Covered employers are required to provide at least 12 compensated days leave per year to covered employees working full-time for sick leave, vacation, or personal necessity at the covered employee’s request. Paid holidays, consistent with established employer policy, may be counted toward the required 12 compensated days off. Part-time covered employees are entitled to a pro-rata equivalent of the compensated days provided to covered employees working full-time. Covered employees are eligible to use accrued days off after the first six months of employment with the covered employer as a covered employee or in accordance with the policies of the covered employer, whichever occurs first. Covered employees accrue one day of compensated leave per month of fulltime equivalent employment.

“Covered employees” are employees who perform home care or building services in connection with a service contract, county assistance, or a county lease. Employees are not considered covered employees if they are either (1) under age 18 years; (2) work in a government sponsored training program; (3) are volunteers; and/or (4) are employed as part of a County or private youth employment program.

Covered employers are required to conspicuously post on their premises, in an area where notices to employees and applications for employment are regularly posted or in an area that is accessible to all covered employees on a daily basis, two copies of this law informing employees of their rights under this law. Covered employers are also required to provide to each covered employee, in person or by mail, a copy of a written notice informing the covered employees of their rights under this law.

Westchester County Earned Sick Leave Law

The Westchester County Earned Sick Leave Law, applicable to all Westchester County employers, requires employers to provide eligible employees with at least one hour of sick leave for every 30 hours worked. An eligible employee is any person that works at least 80 hours in a calendar year within Westchester County, except for those working pursuant to a work-study program or in a work experience program established by a social services district and those compensated by a qualified scholarship.

Employers with five or more employees in Westchester County must provide their employees with up to 40 hours of paid sick leave in a year (either a calendar year or otherwise as determined by the employer, such as a year commencing on the anniversary of hiring). Paid sick time must be the same hourly rate the employee normally earns, provided that it is no less than the applicable current hourly wage, which at the time of this publication is $12.00 in Westchester County. Employers with four or fewer employees in Westchester County must provide up to 40 hours of unpaid sick leave in a year. These are minimum requirements and an employer may offer additional sick leave to its employees. Additionally, employers may require new employees wait 90 days prior to using their accrued sick time.

Employers are not required to pay employees for their earned but unused paid sick leave upon termination of employment. Additionally, while an employee may roll over his or her unused sick leave to the subsequent year, the Law does not require that employers provide more than 40 hours in a year.

Upon hiring, every employer must provide its Westchester County employees a copy of the Law and written notice of how the Law applies to that employee. Additionally, every employer must display a copy of the Law and poster in a conspicuous location (e.g., employee break room or kitchen area) in English, Spanish, and any other language deemed appropriate by Westchester County.

For more information on the Law, please see our prior article and the Westchester County Human Rights Commission web site.

Westchester County Safe Time Leave

Under the Westchester County Safe Time Leave Law, which applies to all employers in Westchester County, any person employed for hire by an employer in any employment within the County for more than 90 days in a calendar year who performs work on a full-time or part-time basis may take up to 40 hours paid leave in a calendar year in order to attend or testify at civil or criminal proceedings for domestic violence or human trafficking, and to relocate to a safe location. The Law excludes work performed as a participant in a work experience program established by a social services district, pursuant to specified work study programs, or by employees compensated by or through specified scholarships.

Employees are eligible to take paid leave for the purposes of the Law once they have worked for the employer for 90 days. Employers in Westchester County must provide written notice and a copy of the Law to each employee and post signs in English and Spanish in a location easily accessible by employees. In addition, for new hires, all covered employers must provide a copy of the Law and written notice of how the Law applies to each employee at the commencement of employment.

Employers may not deny or restrain a covered employee’s valid request for safe time leave, but may request proof that the safe time leave is being used for the intended purposes of the Law. In addition, employers can neither require the employee find coverage for their position during their safe time leave absence, nor retaliate against them for exercising their rights under the Law, filing a complaint for an alleged violation of the Law, or informing other employees of such rights.

For more information on the Law, please see our prior article and the Westchester County Human Rights Commission web site.

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For further information or guidance on revising your policies and procedures in accordance with the above leave laws, please contact David Paseltiner at (516) 393-8223 or dpaseltiner@jaspanllp.com.

There are many laws on the federal, state and local levels that govern whether employers must provide time off, paid or unpaid, to employees for various types of leave. Most employers and employees are familiar with the federal Family and Medical Leave Act of 1993 (FMLA), as well as the New York Paid Family Leave Benefits Law (PFLBL). The recent COVID-19 pandemic has also resulted in the federal government and many states, including New York, adopting leave laws particular to this event (see our recent article on this topic). While these new laws have garnered significant attention, less attention has been paid to the fact that, just last week, New York enacted a mandatory sick leave law.

The following is a brief summary of this new law, as well as other lesser-known New York State employee leave laws. Unless otherwise noted below, these laws apply to all private employers operating in New York State, regardless of the number of employees. Readers are advised to refer to the full text of the laws for a complete description of their terms.

Sick Leave

On April 3, 2020, Governor Andrew Cuomo signed New York Labor Law §196-b (NY Sick Leave Law). It mandates that employers provide paid or unpaid sick leave to employees depending on the employer’s size and the previous tax year’s net income. Specifically, beginning on January 1, 2021:

  • Employers with four or fewer employees must provide at least 40 hours of sick leave that is: (i) unpaid, if the employer’s net income is less than $1 million, or (ii) paid at the employee’s regular rate, if the employer’s net income is greater than $1 million.
  • Employers with five to 99 employees in a calendar year must provide at least 40 hours of paid sick leave each calendar year.
  • Employers with 100 or more employees must provide at least 56 hours of paid sick leave each year.

Employees will begin accruing sick leave at the commencement of their employment or on September 30, 2020, whichever is later. Leave will accrue at the rate of one hour for every 30 hours worked. However, employers are free to provide employees with the maximum allotment of paid leave at the beginning of the calendar year.

Employers must track earned sick leave and unused sick leave can be carried over to the next calendar year. However, an employer does not have to pay out the earned sick leave when employment ends.

Sick leave may be used for the following reasons:

  • A mental or physical illness, injury, or health condition of an employee or employee’s family member, regardless of whether such illness, injury, or health condition has been diagnosed or requires medical care;
  • The diagnosis, care, or treatment of a mental or physical illness, injury or health condition of, or need for medical diagnosis of, or preventive care for, an employee or an employee’s family member;
  • An absence from work when the employee or employee’s family member has been the victim of domestic violence, a family offense, sexual offense, stalking, or human trafficking, in order to attend to various types of matters which are discussed in more detail below in relation to leave for victims of domestic violence.

The NY Sick Leave Law does not interfere with existing municipal sick leave laws (such as in New York City and Westchester County) and allows for cities to enact local laws or ordinances that conform to or exceed the state sick leave law, if the city has a population of one million or more.

Because employers must begin tracking earned sick leave on September 30, 2020, it is important that they begin preparing to do so now. This means updating existing sick leave policies and training human resources professionals about their obligations.

Jury Duty Leave

Section 519 of the New York Judiciary Law provides that employers may not discharge or penalize any employee for their absence for jury service, when the employee notifies his or her employer before jury service begins. However, employers may withhold wages from an employee during his or her period of jury service, except that employers with more than 10 employees must compensate employees serving as jurors the first $40 of daily wages for the initial three days of jury service. A violation of this law constitutes criminal contempt of court.

Voting Leave

There have been changes to New York’s voting leave laws in the last several years. Just last week, New York passed a budget bill which restored an older version of the voting leave law. Under section 3-110 of the New York State Election Law, an employer must post a notice regarding employee rights for time off to vote in a location where employees can see the notice as they come and go. The notice must be posted at least ten working days prior to each election day until the polls close. An employer must provide up to two hours of paid time off to any employee who (i) is a registered voter, (ii) does not have at least four consecutive hours before or after work while the polls are open, and (iii) notifies the employer two to ten working days prior to the election that they will need time off to vote. The employer may designate the requested time off at either the beginning or end of an employee’s work shift on election day.

Crime Victims/Witness Leave

New York State Penal Law section 215.14 criminalizes an employer’s penalizing or discharging an employee who is the victim of an offense upon which an accusatory instrument is based, who is subpoenaed to attend a criminal proceeding as a witness or who desires to exercise his rights to make a statement as a crime victim with regard to a sentencing, pre-sentencing or parole hearing, provided the employee gives prior notice to his employer of his intent to appear as a witness, to consult with the district attorney, or to attend such hearing. An employer may withhold wages from any employee during the period of absence from work and may request the employee provide verification of such appearance, consultation or attendance. Employers who violate this law may be charged with a class B misdemeanor.

Victims of Domestic Violence

Under Section 22(c) of Article 15 of the New York State Executive Law, an employer is required to provide a reasonable accommodation to an employee who is a victim of domestic violence who must be absent from work for a reasonable time to (i) seek medical attention or psychological counseling for themselves or a child, (ii) obtain services from domestic violence organizations, (iii) participate in safety planning including temporarily or permanently relocating, or (iv) obtain legal services, assist in the prosecution of the offense or appear in court in relation to the domestic violence incident. An employer is required to provide a reasonable accommodation for an employee’s absence in accordance with this law unless the employer can demonstrate that the employee’s absence would constitute an undue hardship to the employer. An employee must provide either advanced notice of his or her absence to the extent it is feasible, or documentation verifying the purpose of the leave.

Medical Donations

The PFLBL provides paid family leave to employees who need to care for a close family member with a serious health condition. A 2018 Amendment to PFLBL, known as the Living Donor Protection Act, expands the definition of “serious health condition” to include organ and tissue donation, and requires that employers allow employees to take leave to care for a family member who is involved in such a donation, including transplantation preparation and recovery from related surgery.

Section 202-A of the Labor Law states that an employer with 20 or more employees must provide a leave of absence for up to 24 working hours to an employee seeking to donate bone marrow.

Section 202-J of the Labor Law provides that an employer with 20 or more employees must either, at its option: (i) grant three hours of leave of absence in any 12 month period to an employee who seeks to donate blood, provided that the leave of absence may not exceed three hours unless otherwise agreed to by the employer and must comply with the requirements established by the labor commissioner; or (ii) allow its employees without use of accumulated leave time to donate blood during work hours at least twice a year at a convenient time and place set by the employer, including allowing an employee to participate in a blood drive at the employee’s place of employment. Employers are prohibited from retaliating against an employee who requests or obtains a leave of absence pursuant to these laws.

Lactation/ Breast-feeding

Under New York Labor Law section 206-c, employers are required (i) to provide reasonable unpaid break time or permit an employee to use paid break time each day to express breast milk for her nursing child for up to three years following child birth, (ii) make reasonable efforts to provide a location, in close proximity to the work area, where an employee can express milk in privacy, and (iii) not to discriminate against an employee who chooses to express breast milk in the work place. Guidelines issued by the New York State Department of Labor also provide that an employer must provide written notification of the rights provided pursuant to this law to any employees returning to work following the birth of a child.

Religious Observance

Under Section 296 of Article 15 of the New York State Executive Law, except where it would cause an employer to incur an undue hardship, no employee may be required to remain at the employee’s place of employment during any day or days or portion thereof that, as a requirement of such employee’s religion, the employee observes as his or her sabbath or other holy day, including a reasonable time before and after such observance for travel between the work site and his or her home. However, any such absence from work must, wherever practicable in the employer’s reasonable judgment, be made up by an equivalent amount of time and work at some other mutually convenient time or be charged against any leave with pay ordinarily granted, other than sick leave. Any such absence not so made up or charged may be treated by the employer as leave taken without pay. Refusing to permit an employee to utilize such leave, solely because the leave will be used for absence from work to accommodate the employee’s sincerely held religious observance or practice, is an unlawful discriminatory practice.

Military Service and Military Spouse Leave

Section 317 of the New York Military Law provides that in the case of any non-temporary employee who, in order to perform military service, leaves his or her position with an employer, and who  thereafter (a) receives a certificate of completion of military service;  (b) is still qualified to perform the duties of such position; and  (c) makes application for reemployment within 90 days after he or she is relieved from such service, must be restored to such person to such position, or to a position of like seniority, status and pay, unless the employer’s circumstances have so changed as to make it impossible or unreasonable to do so.

In addition, New York Labor Law section 202-I requires employers with 20 or more employees working in at least one site to give the spouse of a member of the armed forces of the United States, national guard or reserves who has been deployed during a period of military conflict, to a combat theater or combat zone of operations up to ten days unpaid leave, provided such leave shall only be used when the spouse is on leave from the armed forces of the United States, national guard or reserves while deployed during a period of military conflict to a combat theater or combat zone of operations. Employers may not retaliate against an employee for requesting or obtaining such leave.

Adoption

While not itself requiring leave for adoption, New York Labor Law 201-c does require employers to give employees who adopt a child the same leave benefits given to employees for the birth of the child if the adopted child is either (a) younger than school age (currently, five years old), or (b) hard-to-place or handicapped and under 18 years old. Employers cannot retaliate against an employee for exercising rights under this law.

Funeral and Bereavement Leave

While not itself requiring leave for bereavement, New York Civil Rights Law 79-n does require employers that allow employees to take funeral or bereavement leave for the death of the employee’s spouse or the child, parent, or other relative of the spouse to provide the same leave to an employee for the death of the employee’s same-sex committed partner or the child, parent, or other relative of that partner.

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For further information or guidance on revising your policies and procedures in accordance with the above leave laws, please contact David Paseltiner at (516) 393-8223 or dpaseltiner@jaspanllp.com

Unemployment benefits in New York are generally available to those who meet state law eligibility requirements. The newly enacted Coronavirus Aid, Relief and Economic Security (CARES) Act also expands state unemployment insurance programs to provide benefits for individuals who might otherwise not qualify, and to increase the amount and duration of available benefits.

Eligibility Under New York Law

In order to receive unemployment insurance benefits in New York, the following requirements must be met:

  1. Employment was terminated or employee’s hours were significantly reduced through no fault of the employee;
  2. Employee can prove sufficient prior earnings to establish a claim;
  3. Employee is ready, willing, able to work;
  4. Employee is actively seeking employment and provides documented proof of such attempts (unless waived by New York State Department Of Labor); and
  5. Employee worked in New York within the last eighteen (18) months.

Generally, an employee is considered to have been terminated through no fault of his or her own if the termination was the result of a lack of work, seasonal employment, corporate restructuring, or any other reason that is out of control of the employee.

Limitations on Benefits

The amount an employee is eligible to collect under New York’s unemployment insurance program depends on his or her recent earnings history. At a maximum, an employee may collect $504 per week for 26 weeks under New York’s program. If a person is still unemployed after 26 weeks, he or she may be eligible for continued emergency unemployment compensation.

If a person’s hours are reduced, or they are able to find part-time work after termination, he or she may be eligible for partial unemployment benefits. Partial unemployment is only available to employees working three days per week or less. For each full or partial day of work, the employee’s weekly benefit amount will be reduced by 25%.

Enhanced Unemployment Insurance Benefits Under the CARES Act

The CARES Act provides for expanded unemployment insurance benefits to provide direct relief to those affected by the COVID-19 pandemic.

There is normally a seven (7) day waiting period before an employee can apply for unemployment benefits. The CARES Act eliminates all such eligibility waiting periods if an employee is terminated for a COVID-19 related reason, and provides funding to states to cover the cost of unemployment benefits during that week.

The Pandemic Emergency Unemployment Compensation (PEUC) provision of the CARES Act extends the period for receiving unemployment benefits (26 weeks, in the case of New York) by 13 weeks for individuals who have exhausted their benefits but are able, available, and actively seeking work. The federal government will reimburse states for 13 weeks of PEUC. However, states are required to be flexible in determining whether a person is able to work or is looking for work because they are sick, quarantined or subject to stay-at-home orders.

The CARES Act also creates the Pandemic Unemployment Assistance Program (PUA), which provides unemployment insurance benefits to persons who: (1) would not otherwise qualify for state law unemployment and PEUC benefits; (2) have exhausted their right to state law or PEUC benefits; (3) are self-employed; (4) are seeking part-time employment; or (5) do not have sufficient work history. An individual who meets these criterion is eligible for PUA benefits for up to thirty-nine weeks if he or she is unable to telework, is not receiving other paid leave benefits and:

  1. He/she has, or has symptoms of, COVID-19;
  2. A member of his/her household has COVID-19;
  3. He/she is caring for a family or household member who has COVID-19;
  4. He/she is a primary caregiver for a child or other household member whose school or facility has closed as a result of COVID-19;
  5. He/she cannot go to work because of a COVID-19 related quarantine;
  6. He/she cannot go to work because his/her healthcare provider recommends self-quarantining;
  7. He/she was supposed to start a new job, but has lost that job or cannot go to work as a result of COVID-19;
  8. He/she has become the primary wage earner for a household because the former head of the household died of COVID-19;
  9. He/she had to quit his/her job because of COVID-19; or
  10. His/her workplace closed because of COVID-19.

PUA applies retroactively to January 27, 2020 and extends through December 31, 2020.

The CARES Act also creates Federal Pandemic Unemployment Compensation (PUC), which provides for an additional $600 per week on top of an individual’s state unemployment insurance benefit, PUA benefit or PEUC benefit. This additional benefit begins on April 5, 2020, and sunsets on July 31, 2020. According to NYSDOL’s website, individuals do not need to do anything to claim the PUC benefit; it will automatically be added to benefit payments made after April 5, 2020.

Conclusion

Unemployment insurance benefits that are ordinarily available to New Yorkers will substantially increase in amount and duration as a result of the CARES Act. In some instances, low wage earners may even be eligible to make more through expanded unemployment until July 31, 2020, than the would have if they continued working as a resulted of the additional $600 PUC benefit. Employers and employees will need to factor this into decisions they make in pursuing other forms of government assistance, including forgivable Paycheck Protection Program loans.

The Wage and Hour Division of the United States Department of Labor (USDOL) has enacted a temporary rule (“Rule”) regarding the implementation of the Families First Coronavirus Response Act (FFCRA). The Rule clarifies the Emergency Paid Sick Leave Act (EPSLA) and Emergency Family and Medical Leave Expansion Act (EFMLEA) portions of the FFCRA.

By way of background, EPSLA entitles employees who cannot work or telework to paid emergency sick leave if they meet one of six qualifying conditions, which generally involve the employee: (1) suffering from or needing to quarantine because of COVID-19; (2) needing to care for another person who is suffering from or needs to quarantine because of COVID-19; or (3) needing to care for a child because of school closures or the unavailability of child care relating to COVID-19. The precise amount of pay to be provided depends on the reason for leave.

EFMLEA entitles employees who have been on an employer’s payroll for at least thirty days, and who cannot work or telework because of the need to care for a child because of school closures or the unavailability of child care relating to COVID-19, to up to twelve weeks of emergency family leave. The first ten days of such leave are unpaid (unless an employee utilizes paid leave under EPSLA or accrued paid time off during this time), and the remainder of leave is paid at 2/3 of the employee’s regular rate of pay, capped at $200 per day.

The Rule and its accompanying commentary are 124-pages long and there is a lot to unpack. We will cover some of the highlights here.

Definitions

Most of the definitions applicable to EFMLEA and EPSLA are borrowed from the Family Medical Leave Act of 1993 (FMLA) or the Fair Labor Standards Act (FLSA), and do not require explanation. A few definitions, however, are notable.

Where leave is sought under EFMLEA because of an employee’s need to care for a child due to the unavailability of a childcare provider, the text of EFMLEA states that a “childcare provider” means a provider who is ordinarily compensated by the employee. However, Section 826.10 of the Rule makes clear that “the eligible child care provider need not be compensated or licensed if he or she is a family member or friend, such as a neighbor, who regularly cares for the Employee’s child.”

Additionally, Section 826.10 of the Rule states that the term “son or daughter” as used in both EPSLA and EFMLEA includes: “a biological, adopted, or foster child, a stepchild, a legal ward, or a child of a person standing in loco parentis, who is under 18 years of age; or 18 years of age or older who is incapable of self-care because of a mental or physical disability.” The definition is significant to the extent it makes clear that paid leave is available to care for children over age 18 in limited circumstances.

The Rule also more clearly defines “telework,” which is important because employees who are capable of “teleworking” are not eligible for paid leave under either EPSLA or EFMLEA. According to the commentary to the Rule, telework is “no less work than if it were performed at the employer’s worksite” even though it is done from an employee’s home or another offsite location, during ordinary work hours or at other agreed upon times.

Reasons for Leave Under EFMLEA and EPSLA

EPSLA provides for paid emergency sick leave in six independent situations. First, paid sick leave is available if employees are unable to work or telework because they are subject to a federal, state, or local COVID-19 quarantine or isolation order. The Rule somewhat surprisingly indicates that it covers shelter-in-place and stay-at-home orders in certain situations. This is in contrast to the New York Quarantine Law, under which temporary business closures and social distancing measures do not qualify as quarantine or isolation orders according to New York State’s frequently asked questions website.

The Rule does place certain qualifications on the use of sick leave where the employee is subject to a stay-at-home order. In this situation, paid sick leave is only available if the employer has work for the employee, but that work cannot be completed because of the stay-at-home order. If the employer does not have work available, the employee may not utilize paid sick leave.

What does this mean? The Rule provides the following example: if a coffee shop closes temporarily or indefinitely due to a downturn in business related to COVID-19, a cashier of the business who is subject to a stay-at-home order may not take paid sick leave. That is because the lack of work is due to the downturn in business, not the cashier’s inability to leave home.

Similarly, the commentary to the Rule explains that paid sick leave is not ordinarily available if the employee can telework despite the stay-at-home order. There is one exception: if the employee’s ability to telework is disrupted by external circumstances, he or she may qualify for paid emergency sick leave.

The commentary gives the following example. If a lawyer is subject to a shelter-in-place order but can telework, he or she may not take paid sick leave. However, if a power outage or other like circumstance occurs that prevents the attorney from teleworking for a period of time, he or she may be eligible for paid sick leave.

The second reason for paid sick leave under EPSLA is an employee’s inability to work or telework because he or she has been advised by a health care provider to quarantine for a reason related to COVID-19. The Rule clarifies that the health care provider’s advice must be based on a belief that the employee has COVID-19, may have COVID-19 or is particularly vulnerable to COVID-19. The latter category is the most surprising clarification to this portion of EPSLA, as existing FMLA guidance provides that the desire to avoid exposure to “pandemic influenza” is generally insufficient to justify an employee taking medical leave.

The third reason for paid sick leave under EPSLA is an employee’s seeking of a medical diagnosis because he or she is experiencing symptoms of COVID-19. Section 826.20(a)(4) of the Rule clarifies that “symptoms” in this context means symptoms of COVID-19 as defined by the Centers for Disease Control (CDC), presently including, but not limited to, shortness of breath, dry cough, and fever.

The Rule also clarifies that this type of leave is available for time spent by the employee to make, wait for or attend an appointment for a COVID-19 test. The commentary explains that this provision also covers employees who seek a test, are told that they do not meet the criteria for testing, but are advised to self-quarantine, if that prevents the employee from working. On the other hand, leave is generally not available to employees who are self-quarantining without seeking a medical diagnosis, or to employees who are waiting for test results but are able and allowed to telework.

The fourth reason for paid sick leave under EPSLA is an employee’s inability to work because he or she needs to care for someone who is: (I) subject to a Federal, State, or local quarantine or isolation order; or (ii) has been advised by a health care provider to self-quarantine due to concerns related to COVID-19. Section 820.26(a)(5) of the Rule explains that this leave is not available when the employee has no personal relationship to the person being cared for—rather, the person being cared for must be an immediate family member, roommate, or a similar relationship that would create an expectation that the employee would provide care. And, the employee’s responsibility to provide care only entitles him or her to leave if it renders the employee unable to work.

The fifth reason for paid sick leave under EPSLA is an employee’s inability to work because he or she needs to care for a son or daughter if, for COVID-19 related reasons: (i) the child’s school or place of care has closed; or (ii) the child care provider is unavailable. An employee may only use this type of leave if someone else, such as a co-parent, guardian or child care provider, is unavailable to provide childcare. The same rules apply when an employee takes paid emergency family leave under EFMLEA.

The sixth reason for paid sick leave under EPSLA is an employee’s inability to work because he or she is experiencing any other substantially similar condition specified by the Secretary of Health and Human Services (HHS Secretary) in consultation with the Secretary of the Treasury and the Secretary of Labor. The Rule does not identify any such conditions and, as of now, the HHS Secretary has not released any other guidance.

Calculating Paid Sick Leave Under EPSLA

Under EPSLA, full-time and part-time employees are entitled to different amounts of leave. However, the statute does not define “full-time” and “part-time.” Section 826.21 of the Rule explains that a full-time employee is one who is normally scheduled to work at least 40 hours per workweek. Those who ordinarily work less than 40 hours per workweek are part-time employees.

Full-time employees are entitled to 80 hours of paid leave. Calculating leave is more difficult in the case of part-time employees, who are entitled to paid leave for the “number of hours that such employee works, on average, over a 2-week period.” In the case of a part-time employee whose schedule varies from week to week, EPSLA provides that an employer must first calculate the average number of hours the employee was scheduled per day over the six months before the date the employee begins taking paid sick leave. Once the employer calculates the daily average, it must multiply that number by 14 to determine the two-week average.

The amount of pay an employee may receive during leave under EPSLA depends on the reason for leave. For reasons one through three (described above), an employee is entitled to be paid at his or her regular rate of pay, capped at $511 per day and $5,110 for the entire period of leave. For reasons four through six (described above), an employee is entitled to be paid at 2/3 of his or her regular rate of pay, capped at $200 per day and $2,000 for the entire period of leave. The employer may not require an employee to use other accrued paid time off (PTO) currently with paid emergency sick leave, although an employee is free to do so if his ordinary rate of pay exceeds the applicable monetary caps on EPSLA paid leave.

Calculating Paid Family Leave Under EMFLEA

Under EFMLEA, employees are entitled to up to twelve weeks of leave. The first ten days are unpaid, unless an employee opts to use accrued PTO or paid sick leave under EPSLA. The remainder of leave is paid at 2/3 of the employee’s regular rate of pay, capped at $200 per day and $10,000 for the entirety of leave.

The Rule contains an interesting wrinkle about the concurrent use of PTO while taking leave under EFMLEA. Under an earlier iteration of FFCRA, the EFMLEA provided that an employee could choose to use accrued PTO concurrently with EFMLEA (in order to receive full pay), but that an employer could not require the employee to do so. In the version of the FFCRA that was enacted, the EFMLEA is silent on whether an employer can require an employee to use accrued PTO concurrently with paid emergency family leave. Section 826.24(d) of the Rule explains that an employer can require an employee to utilize PTO concurrently with EFMLEA leave in the same manner that an employer can require an employee to use accrued PTO concurrently with FMLA leave.

The Rule also clarifies that, because EFMLEA is technically an expansion of the leave available under FMLA, any leave taken pursuant to EFMLEA counts against the 12 workweeks of FMLA leave to which employees are otherwise entitled.

Exclusion of Healthcare Workers

EFMLEA and EPSLA allow employers to decline to provide paid leave to employees who are health care providers or emergency responders. The Rule provides extensive definitions as to who is considered a “health care provider” or “emergency responder” for these purposes.

Exemption of Small Businesses 

EPSLA and EFMLEA both provide the Secretary of Labor with authority to exempt employers with fewer than 50 employees from providing paid leave where an employee needs to care for a child due to a school closure or unavailability of a child care provider, if doing so would jeopardize the viability of the business as a going concern. The Rule explains that this exception applies when an authorizer officer of the business determines that:

  • The leave requested would result in the small business’s expenses and financial obligations exceeding available business revenues and cause the small business to cease operating at a minimal capacity; or
  • The absence of the employee requesting leave would entail a substantial risk to the financial health or operational capabilities of the 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 requesting leave, and such labor or services are needed for the small business to operate at a minimal capacity

Employers using this exemption do not need to submit an application to DOL. They should simply document their entitlement to the exemption and, pursuant to the Rule’s record keeping provisions (discussed below), maintain that documentation for four years.

Intermittent Leave

The Rule explains that leave under EPSLA and EFMLEA may be taken on an intermittent basis if certain conditions are met. Leave can only be taken intermittently if both employer and employee agree to the arrangement, and to the increments of intermittent leave that will be used.

At bottom, the Rule recognizes that the FFCRA’s goal is to provide as much flexibility as is necessary to contain the spread of COVID-19. For that reason, where an employee is teleworking, employer and employee can agree to the use of paid leave in any increment. Where an employee reports to the worksite, however, the risk of transmitting COVID-19 is elevated. Therefore, intermittent use of paid sick leave under EPSLA by a person who reports to work in person is only allowed where the employee is utilizing leave to care for a child because school is closed or a childcare provider is unavailable. In the case of all other EPSLA qualifying reasons, the employee is at too great a risk of spreading COVID-19 to be permitted to return to work intermittently.

Where leave is taken intermittently, only the actual amount of leave used may be charged to an employee’s paid leave allowance.

Providing Notice and Supporting Documentation

We have received many inquiries from employers as to what type of documentation employees must submit in order to establish an entitlement to leave.

The Rule explains that an employer can require an employee to follow reasonable notice procedures after the first day for which an employee takes leave, other than in cases where leave required to care for a child due to a school closure or a childcare provider’s unavailability. Where leave is needed to care for a child in such circumstances, the employee must give as much notice as is practicable. Notice may be provided by the employee’s “spokesperson,” i.e., a spouse, other adult family member or a responsible party, if the employee cannot provide it directly.

According to section 826.90 of the Rule, oral notice is generally sufficient if enough information is provided to determine whether the reason for leave is qualifying under EPSLA or EFMLEA. In no event may the employer require the notice to consist of more than the supporting documentation required by section 826.100.

Section 826.100 describes the type of documentation that an employer may require in considering a request for leave. In general, the information provided should include the employee’s name, the dates for which leave is requested, an oral or written statement of the qualifying reason for the leave and a statement that the employee is unable to work or telework because of that reason. In addition:

  • Where leave is required due to a government order of quarantine or isolation, the employee must provide the name of the government entity that issued the quarantine or isolation order to which the employee is subject.
  • Where leave is required due to a physician’s recommendation of self-quarantine or isolation, the employee must provide the name of the health care provider who advised him or her to self-quarantine for COVID-19 related reasons.
  • Where leave is taken to care for another person under a government order or physician’s recommendation of quarantine or isolation, the employee must provide, depending on the nature of the request, the government entity that issued the quarantine or isolation order to which the individual is subject or the name of the health care provider who advised the individual to self-quarantine.
  • Where leave is taken to care for a child because of a school closure or the unavailability of a child care provider, the employee must provide: (i) the name of the child being care for; (ii) the name of the school, place of care, or child care provider that closed or became unavailable due to COVID-19 reasons; and (iii) a statement representing that no other suitable person is available to care for the child during the period of requested leave.

The employer may also require an employee to provide such additional material as is needed for the employer to substantiate its entitlement to tax credits pursuant to the FFCRA. An employer is not obligated to provide leave in the absence of such materials. A frequently asked questions section on the IRS’ website currently indicates that employers should also keep:

  1. Documentation to show how the employer determined the amount of qualified sick and family leave wages paid to employees that are eligible for the credit, including records of work, telework and qualified sick leave and qualified family leave.
  2. Documentation to show how the employer determined the amount of qualified health plan expenses that the employer allocated to wages.
  3. Copies of any completed Forms 7200, Advance of Employer Credits Due To COVID-19, that the employer submitted to the IRS.
  4. Copies of the completed Forms 941, Employer’s Quarterly Federal Tax Return, that the employer submitted to the IRS (or, for employers that use third party payers to meet their employment tax obligations, records of information provided to the third party payer regarding the employer’s entitlement to the credit claimed on Form 941).

The employer may not require any further information and, if the employee initially provides insufficient information, the employer should give the employee an opportunity to correct any deficiencies before denying leave.

Health Insurance

Employees who take leave under EPSLA or EFMLEA are entitled to continue their coverage under the employer’s health insurance on the same conditions as if they had not taken the leave (i.e., if an employee was previously required to contribute to the cost of such coverage, he or she must continue to do so).

Return to Work

In most instances, an employee is entitled to be restored to the same or an equivalent position upon return from EFMLEA or EPSLA leave. However, just as in the case of FMLA leave, an employee is not immune from employment actions that would have occurred regardless of whether the leave was taken. The employer must be able to demonstrate that the employee would have been laid off or furloughed, as the case may be, even if he or she had not taken leave. In the case of the EFMLEA, job restoration may be denied to key employees if “such denial is necessary to prevent substantial and grievous economic injury to the operations of the employer.”

Additionally, an employer who has fewer than twenty-five employees may deny job restoration to an employee if all four of the following conditions are met:

  1. The employee took leave to care for his or her son or daughter whose school or place of care was closed or whose child care provider was unavailable;
  2. The employee’s position no longer exists due to economic or operating conditions that (i) affect employment and (ii) are caused by a public health emergency (i.e., due to COVID-19 related reasons) during the period of the employee’s leave;
  3. The employer made reasonable efforts to restore the employee to the same or an equivalent position; and
  4. If the employer’s reasonable efforts to restore the employee fail, the employer makes reasonable efforts for a period of time to contact the employee if an equivalent position becomes available.

Recordkeeping

Section 826.140 of the Rule explains that an employer is required to retain the following documents for four years:

  • All documentation provided pursuant to § 826.100 in order to substantiate a request for leave, regardless of whether leave was granted or denied.
  • If an Employee provided oral statements to support his or her request for paid sick leave or expanded family and medical leave, the employer is required to document and retain such information.
  • If an employer denies an employee’s request for leave pursuant to the small business exemption under § 826.40(b), the employer must document its authorized officer’s determination that the prerequisite criteria for that exemption are satisfied and retain such documentation.
  • Documents to support an employer’s claim for tax credits from the Internal Revenue Service (IRS).

Conclusion 

When it comes to FFCRA, a vast amount of information has been released by the government in a short amount of time. We should all hope the need to provide such leave is short-lived and that the sunset of this crisis is on the horizon. If you have any questions, please contact me at (516) 393-8292 or jbaquet@jaspanllp.com.

As the COVID-19 pandemic continues to affect the nation, many employers have been forced to adjust their regular workplace policies to address public health concerns. While most employers have shifted to working remotely, some essential employers remain open for business. Given the contagiousness of COVID-19, a single cough is enough to concern nearby individuals. Yet, existing discrimination laws have raised questions about the extent that managers can make inquiries of symptomatic employees. Recently, the United States Equal Employment Opportunity Commission (EEOC) updated its guidance on the Americans with Disabilities Act (ADA), specifically addressing COVID-19. The EEOC initially issued this guidance in 2009 to help employers navigate the ADA during the H1N1 Influenza outbreak. Now, the guidance contains updated sections with specific examples related to COVID-19 symptoms and concerns.

The ADA generally prohibits employers from making disability-related inquiries and requiring employees to undergo medical examinations unless they are job-related and consistent with business necessity. One way to illustrate business necessity is if an employee’s condition poses a direct threat to the workplace. A direct threat is defined as a significant risk of substantial harm to the health or safety of the individual or others that cannot be eliminated or reduced by reasonable accommodation. In its updated guidance, the EEOC states that the COVID-19 pandemic currently meets the direct threat standard, which means that employers are permitted to make COVID-19 related inquiries or require employees to undergo COVID-19 testing. However, the EEOC notes that this assessment may change as the spread and severity of COVID-19 changes, meaning that the direct threat exception may not be applicable in the future.

The EEOC has also published a COVID-19 Q&A which overlaps with its updated guidance, which provides valuable information for employers. Specifically, it states that employers may ask employees who call in sick about COVID-19 symptoms, such as fever, chills, cough, shortness of breath, or sore throat. Under the ADA, any information received must be kept confidential in the employee’s medical record. Notably, employers may also require symptomatic employees to stay home.

Employers are also allowed to take the body temperature of employees during the COVID-19 outbreak, even though this would typically be considered a medical examination, as a result of the direct threat exception. Employers may also take the body temperature of individuals who have received a conditional offer of employment, as part of a post-offer, pre-employment medical exam. If such individuals show COVID-19 symptoms, the employer would be allowed to delay the start date of employment, or withdraw the job offer altogether.

Where an employee has been out of work or working from home because he or she has COVID-19 symptoms, the employer may require a doctor’s note to certify that the employee is fit for duty, before allowing the employee to return to the workplace. However, the EEOC notes that, as a practical matter, health care professionals may be too busy to provide such documentation. Thus, employers may want to consider alternate methods, such as relying on a local clinic, or accepting such information via email.

We will continue to post updates about the rapidly changing employment law landscape during the COVID-19 pandemic.

We previously blogged about the new paid emergency sick leave and family leave programs under the Families First Coronavirus Response Act (FFCRA). Both programs require employers to provide paid leave to employees under certain circumstances relating to the COVID-19 pandemic. However, employers are entitled to recoup all qualifying paid leave expenses from the U.S. Department of the Treasury through refundable payroll tax credits. Practically speaking, many employers are wondering what that means.

Ordinarily, employers are required to deposit with the IRS all federal income taxes withheld from employees’ pay, as well as both the employer and employee contributions to social security and medicare, on a monthly or semi-weekly basis. Employers also file quarterly payroll tax returns.

The FFCRA allows employers who pay for an employee’s emergency sick or family leave between April 1, 2020 and December 31, 2020 to keep, rather than deposit, a portion of the payroll taxes due for all of its employees that is equal to the allowable cost of that leave. If the total amount of payroll taxes due for all of an employer’s employees is less than the allowable cost of leave, the employer may immediately file an accelerated request for payment of the deficiency with the IRS. In a press release, the IRS has indicated that it will soon issue forms on which such a request can be made.

The IRS’ website provides the following example to explain how these refundable tax credits will work:

“If an eligible employer paid $5,000 in sick leave and is otherwise required to deposit $8,000 in payroll taxes, including taxes withheld from all its employees, the employer could use up to $5,000 of the $8,000 of taxes it was going to deposit for making qualified leave payments. The employer would only be required under the law to deposit the remaining $3,000 on its next regular deposit date. If an eligible employer paid $10,000 in sick leave and was required to deposit $8,000 in taxes, the employer could use the entire $8,000 of taxes in order to make qualified leave payments and file a request for an accelerated credit for the remaining $2,000.”

Although employers are entitled to reimbursement for the costs of maintaining an employee’s health insurance during the period of emergency sick or family leave, it is unclear whether the employer may be reimbursed for those costs in the same manner described above.

Self-employed individuals are also entitled to be reimbursed for qualified emergency family or sick leave payments. These individuals may reduce their estimated tax payments to recoup qualified leave payments, and report the payments on their tax returns.

What kind of paperwork will need to be provided to substantiate an employer’s payment of qualified leave expenses? According to the U.S. Department of Labor’s (USDOL) website, the IRS will soon issue guidance on this point, but employers should assume that they will need sufficient documentation to substantiate the employee’s entitlement to leave. As it relates to paid emergency family leave, USDOL states that “you may also require your employee to provide you with any additional documentation in support of such leave, to the extent permitted under the certification rules for conventional [Family and Medical Leave Act of 1993] leave requests. For example, this could include a notice that has been posted on a government, school, or day care website, or published in a newspaper, or an email from an employee or official of the school, place of care, or child care provider.”

We will continue to provide updates as they become available.

With Governor Cuomo having forced the closure of “non-essential” businesses to combat the spread of COVID-19, many New York business owners are now presented with the difficult task of determining whether, when or how to reduce their workforces. New York’s WARN Act is designed to protect workers and their families, and requires employers to give ninety days’ advance notice of closures, mass layoffs and furloughs. The law is modeled after the federal WARN Act, but is stricter.

Before acting, employers must consider whether the WARN Act applies to them and whether any applicable exceptions are satisfied. The failure to comply with the law carries with it exposure to significant liability and civil penalties.

Scope of the Law

New York’s WARN Act applies to any private business that employs, within New York state, 50 or more full-time employees or “50 or more employees that work in the aggregate at least two thousand hours per week.”

Covered employers must provide 90 days’ notice to affected employees in the event of:

  1. A “mass layoff,” i.e., an employment loss at a single site of employment during any 30-day period which affects (a) 250 employees or (b) twenty-five employees constituting at least 33% of employees at the site.
  2. A “plant closing” or the “permanent or temporary shutdown of a single site of employment, or one or more facilities or operating units within a single site of employment, that results in an employment loss for 25 or more employees during any 30-day period.”
  3. A relocation of the employer’s operations to a different location at least 50 miles away from the original worksite, causing 25 or more employees to suffer employment loss.
  4. A reduction in work hours by 50% or more for a period of six months or more, if that reduction affects: (a) 250 or more employees; or (b) 25 or more employees constituting at least 33% of the employees at the site.

Some employers incorrectly think they can avoid the WARN Act by implementing “rolling” layoffs, which are separated by a few weeks time and each involve a number of employees below the WARN Act thresholds. The “aggregation rule” prohibits this. It provides that, in determining whether the WARN Act is triggered, an employer must look back 90 days and forward 90 days and assess whether any employment actions taken or planned will, in the aggregate, reach the WARN Act thresholds.

Notice Requirements

If the WARN Act applies, the next step is to ensure that a proper notice, containing all statutorily required information, is provided to all employees who will experience employment loss at least 90 days before the loss will occur. The employer must also notify the employees’ representatives, if any, the Commissioner of Labor, and the Local Workforce Investment Board.

When writing the notice, the employer must be specific and use language the employees can understand. It must contain, among other things, the following information:

  1. The expected date of the first separation of employees and the date when the individual employee will be separated;
  2. A statement as to whether the planned action is expected to be permanent or temporary, and whether the entire plant is to be closed. If the planned action is expected to affect identifiable units of employees differently, the notice must reflect that;
  3. A statement as to whether bumping rights exist (for those who do not know, bumping rights determine if and when a senior employee displaces another employee during a layoff or other employment loss, and is defined in an employer policy or other agreement);
  4. The name and telephone number of an employer representative to contact for further information; and
  5. Information concerning unemployment insurance, job training, and re-employment services, including the following language:

“You are also hereby notified that, as a result of your employment loss, you may be eligible to receive job retraining, re-employment services, or other assistance with obtaining new employment from the New York State Department of Labor or its workforce partners upon your termination. You may also be eligible for unemployment insurance benefits after your last day of employment. Whenever possible, the New York State Department of Labor will contact your employer to arrange to provide additional information regarding these benefits and services to you through workshops, interviews, and other activities that will be scheduled prior to the time your employment ends. If your job has already ended, you can also access reemployment information and apply for unemployment insurance benefits on the Department’s website or you may use the contact information provided on the website or visit one of the Department’s local offices for further information and assistance.”

Section 921-2.3 of the Act contains more information as to the content that must be included in notices sent to employees, the Commission of Labor, the local workforce investment board and the employees’ representatives.

Importantly, the above notice requirements apply even where the employer chooses to pay its employees to stay home.

Exceptions to Warn Act Notice Requirements

While there are several possible exceptions to the application of the WARN Act, there are two of particular relevance to the COVID-19 pandemic: (1) natural disaster; and (2) unforeseeable business circumstances.

The statute does not define the term “natural disaster.” However, the federal version of the WARN Act lists a few examples including a flood, earthquake or drought. If the closing or layoff is a direct result of such a natural disaster, this exception may apply. However, where the closing or layoff is an indirect result of some such event, the exception for unforeseeable business circumstances is more appropriate. The Act specifies that such exception applies when “the need for notice was not reasonably foreseeable at the time the notice would have been required.”

While there is no case law addressing whether a virus or pandemic constitutes either an unforeseeable circumstance or natural disaster, the New York State Department of Labor’s website suggests that the current situation fits within the “unforeseeable business circumstances” exception. It states:

The WARN Act requirement to provide 90 days’ advanced notice has not been suspended because the WARN Act already recognizes that businesses cannot predict sudden and unexpected circumstances beyond an employer’s control, such as government-mandated closures, the loss of your workforce due to school closings, or other specific circumstances due to the coronavirus pandemic.

It is important to note that, even if this exception applies, employers must still provide employees (and the other parties entitled to receive notice) with as much notice as is practicable, as well as an explanation was to why the notice period was shortened. Moreover, if the event requiring notice is a closure, the Department of Labor requests that the employer include in the notice as much information as possible to the Commissioner about the circumstances of closure, so the DOL can determine whether any exceptions apply.

Takeaway

While the WARN Act does not apply to every business or every loss of employment, strict notice requirements must be met when the law is applicable. Employers who do not comply may be subject to significant damages equaling up to sixty days’ back pay and benefits, in addition to attorneys’ fees and civil penalties.

Businesses are continuing to grapple with the myriad challenges brought on by the novel coronavirus pandemic. Workforce reductions are an unfortunate but inevitable byproduct of this national crisis. Employers across the country are considering layoffs (ranging from marginal to mass), furloughs and reductions in employees’ hours and wages. However, employers must not make such decisions based strictly on finances, as there are significant legal pitfalls for those who act in haste. Additionally, employers should consider the impact that these decisions may have on employer-sponsored benefit plans.

Layoffs and Furloughs

The terms “layoff” and “furlough” are sometimes used interchangeably, but they are distinct concepts. A furlough is considered a mandatory, temporary and unpaid leave.  A layoff is a permanent separation of the employee from the business for a reason unrelated to the employee’s performance. The primary distinction is that, in the case of a furlough, the employer intends to retain the employee and the employee intends to return to work after a certain amount of time passes, whereas a layoff contemplates a complete termination of the employer-employee relationship.

There are significant legal differences between layoffs and furloughs. If an employer lays off a large enough segment of its workforce, it may be obligated to provide advance notice to employees and the Department of Labor under the federal WARN Act and/or the “mini-WARN” acts of some states, including New York. The failure to give the appropriate notice exposes employers to significant monetary damages and potential civil penalties.

While furloughs might also trigger employer obligations under the WARN Act and/or mini-WARN laws, this is not necessarily the case. Even when a large segment of the employer’s workforce is furloughed, advance notice may not be required if the furlough is short term, i.e., less than six months in the case of New York’s mini-WARN law.

One important thing to remember is that compliance with WARN and mini-WARN obligations may not be necessary when sudden and unexpected circumstances cause large-scale workforce reductions. Whether layoffs and furloughs resulting from the COVID-19 pandemic meet that criterion remains to be seen, although the New York State Department of Labor’s website suggests that will be the case.

Reductions in Hours and Compensation

Rather than implementing layoffs or furloughs, some employers are considering reducing the hours and/or compensation of their employees. This strategy also has serious legal implications if not handled correctly. For example, in some cases, the WARN Act and mini-WARN laws may apply if a reduction in hours lasts long enough and/or affects a large enough proportion of an employer’s workforce.

Assuming the WARN Act and/or mini-WARN laws do not apply, employers can ordinarily cancel shifts or reduce hours of non-exempt employees (i.e., those who are entitled to overtime) without notice. Those employees must still continue to be paid at least the minimum wage for all hours actually worked (plus overtime, where applicable). If, however, an employee reports to work and is then sent home, an employer in New York may be responsible to provide “call-in pay” (i.e., pay for four hours at minimum wage or pay for the actual duration of the shift, whichever is less).

Things become more complicated when dealing with exempt employees. Employees who are properly classified as exempt are not compensated based upon hours worked. Rather, they are paid a pre-determined amount on a weekly (or less frequent) basis, which cannot be reduced for variations in the quality or quantity of work performed. An exempt employee who performs any work that is more than de minimus in a given week is entitled to their ordinary weekly compensation. This means that, even if an employee is simply returning calls or sending and receiving e-mails, they are typically entitled to a full week’s pay.

Although there are certain exceptions to these rules, they are fact-specific and must be applied with precision to avoid violating the law. For example, an exempt employee does not need to be compensated for any week in which he or she does not perform any work. Thus, if an employer furloughs an exempt employee for an entire week, rather than reducing hours worked in a given week, it may be able to cut payroll costs safely. The problem is in ensuring that exempt employees perform no work whatsoever during this time. It is recommended that employers disable employees’ phones and e-mail access to ensure that no work is performed, in addition to instructing employees in writing that they must not perform any work during the relevant period.

Reductions in the salary of an exempt employee also pose concerns. Employers are not permitted to reduce the salaries of exempt employees based on day-to-day or week-to-week variations in business operations. An employer can make prospective salary reductions based on legitimate long-term business needs, but must ensure that it does not reduce salaries to the extent that exempt status is lost.

In New York, for example, an employee is usually only properly classified as exempt if he or she makes more than a certain amount (i.e., for the year 2020, $925 per week or more in Nassau, Suffolk and Westchester counties). If an exempt employee’s salary is reduced below that threshold, the employee becomes non-exempt, must be paid hourly and is entitled to overtime. There are some exceptions. Physicians, lawyers, outside salespersons or teachers in bona fide educational institutions are not subject to any salary requirements, and their pay can be reduced (if all other legal requirements are met) below the ordinary thresholds without any resulting loss in exempt status.

Health Insurance Coverage

Employers also need to ensure that they take appropriate action with respect to employer-sponsored health plans in the event of a layoff, furlough or reduction in hours. In these circumstances, plan language and terminology is key.  For example, distinctions are usually drawn for benefits available to employees who are laid off versus those who are furloughed.

In some instances, when an employee is furloughed, they remain eligible for employer-sponsored health benefits.  However, depending on the terms of the employer’s plan and its employee eligibility requirements, there are instances where a furlough can trigger a loss in an employee’s health care coverage. If that is what the employer’s plan requires, a furlough may be a COBRA-qualifying event. For example, in a health plan that only provides coverage to regular, active employees who work 30 or more hours per week, a furlough would result in the termination of coverage and the employer would need to give notice as required by COBRA.

Employers may opt to continue coverage for furloughed employees if they would otherwise lose coverage. They may do this by either: (1) amending their plan to extend active employee coverage to a laid-off, furloughed or part-time employee for a pre-determined period of time; or (2) subsidizing employee COBRA premiums, which will generally not treated as taxable wages (unless the subsidy favors highly compensated employees and is the plan is self-funded and not fully insured).

Retirement Plans: Withdrawals and Loans

In the current climate, it should be expected that participants in employer-sponsored 401(k) and 403(b) plans may seek to make withdrawals from and/or borrow from their accounts.

The IRS permits “hardship withdrawals” related to FEMA-declared disasters. However, FEMA has yet to declare the novel coronavirus pandemic as a federal disaster; it has only declared the pandemic as a “national emergency,” which is not grounds for a hardship withdrawal.

At this moment, the Coronavirus Aid, Relief and Security Act (CARES Act) has passed the Senate and is being considered by the House of Representatives. If enacted, the CARES Act would allow employees to make an emergency withdrawal (i.e., a “hardship withdrawal” related to a FEMA-declared disaster) of up to $100,000 from their 401(k) and/or 403(b) account during the COVID-19 pandemic.  Under this construct, employees under age 59 1/2 could withdraw funds while avoiding the 10% early withdrawal penalty that would otherwise be assessed.  The distributions would still be taxable, however.

Additionally, employer-sponsored retirement plans may entitle participants to take loans, but eligibility may depend on employment status. Therefore, depending on the terms of the relevant plan, a furloughed or laid-off employee may or may not be able to borrow from his or her account.

For employees who have already taken out a loan against their retirement plans, the terms of the plan will determine whether the employees may suspend loan payments during a period of an unpaid leave of absence or furlough. All borrowers (whether furloughed or laid off) should also be aware that, barring a change in the law, any loan default will be reported to the IRS on Form 1099-R and will be treated as a taxable distribution.

Conclusion

Clearly, there are many moving parts involved in any workforce reduction. Consultation with competent counsel can prevent costly, and sometimes devastating, errors.