Unemployment benefits in New York are generally available to those who are 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.

On March 18, 2020, President Trump signed the Families First Coronavirus Response Act (FFCRA) which, as we discussed in an earlier blog post, provides for paid emergency sick leave and paid emergency family leave in certain circumstances. The portion of the FFCRA that provides for paid emergency family leave is referred to as the Emergency Family and Medical Leave Expansion Act (EFMLEA) and the portion that provides for paid emergency sick leave is referred to as the Emergency Paid Sick Leave Act (EPSLA).

In yet another blog post, we discussed the first guidance documents relating to EFMLEA and EPSLA that were issued by the United States Department of Labor (USDOL) on March 24, 2020.

On March 26, 2020, USDOL published additional guidance documents, which are summarized below.

Notice Requirements

The FFCRA requires covered employers to post a notice advising employees of their rights under EPSLA and EFMLEA. USDOL has now released two model documents that will satisfy the notice requirements: one for federal workers and one for all other employees.

USDOL also issued a questions and answers document relating to the notice requirements. That document sheds light on exactly how and when notice must be provided.

Each covered employer must post a FFRCA-compliant notice, even if it is located in a state that provides greater protections than those available under EFMLEA and EPSLA.

The notice must be posted in a “conspicuous place” where all employees can easily see it. When employees report to multiple different worksites, but are also required to first report to a common main office or headquarters location, the notice need only be posted in that common main office or headquarters location. If employees report to different worksites without also regularly reporting to a common location, the notice must be posted within each work location. Additionally, if there is not a common space within a single building where all employees are regularly present, the notice must be posted in as many places within a single building as are necessary to ensure that each employee can easily see it.

For employers whose employees are working remotely, the notice requirement can be satisfied by mailing or e-mailing the notice to all employees, or posting it on an internal or external website.

Employers need not provide a copy of the notice to recently terminated employees or job applicants, although notice must be given to new hires through one of the methods described above.

Employers are not required to post the notice in languages other than English.

Temporary Non-Enforcement Period

USDOL also issued a Field Assistance Bulletin to the employees of its Wage and Hour Division, which provides guidance about a temporary period of non-enforcement of FFCRA requirements.

The temporary period of non-enforcement is essentially a grace period that will continue until April 17, 2020. USDOL will not bring enforcement actions against employers who fail to comply with the FFCRA prior to that date, so long as they made reasonable, good faith efforts to come into compliance. An employer meets this standard if:

  1. It remedies any violations, including by making all affected employees whole as soon as practicable.
  2. Its violations of FFCRA were not “willful.” A violation is willful if the employer knew its conduct violated the law, or it showed reckless disregard for whether its conduct violated the law.
  3. It provides USDOL with a written commitment to comply with the FFCRA in the future.

If an employer fails to satisfy any one of these conditions, USDOL reserves the right to bring an enforcement action during the grace period.

We expect that regulations and additional guidance relating EFMLEA and EPSLA will be forthcoming shortly, and we will continue to provide real-time updates.

On March 18, 2020, President Trump signed the Families First Coronavirus Response Act (FFCRA) which, as we discussed in an earlier blog post, provides for paid emergency sick leave and paid emergency family leave in certain circumstances. The portion of the FFCRA that provides for paid emergency family leave is referred to as the Emergency Family and Medical Leave Expansion Act (EFMLEA) and the portion that provides for paid emergency sick leave is referred to as the Emergency Paid Sick Leave Act (EPSLA).

On March 24, 2020, the United States Department of Labor issued its first guidance documents regarding the implementation of EFMLEA and EPSLA. They consist of a Fact Sheet for Employees, a Fact Sheet for Employers, and a Questions and Answers document. In this post we will summarize some of the important takeaways from these guidance documents.

Effective Date

The EFMLEA and EPSLA were both set to take effect on April 2, 2020, unless the government specified otherwise. The guidance documents clarify that the laws will take effect on April 1, 2020, and will apply to leaves taken between that date and December 31, 2020.

The requirements of EFMLEA and EPSLA are not retroactive.

Tax Credits

Employers qualify for dollar-for-dollar reimbursement of of all qualifying wages paid under EMFLEA and EPSLA through refundable payroll tax credits. The guidance documents clarify that employers will also be entitled to reimbursement for costs paid or incurred to maintain employees’ health insurance coverage during the period of leave.

Qualifying Employers

EFMLEA and EPSLA apply to all private employers with less than 500 employees (and some government employers). The guidance documents clarify that, in determining whether the 500-employee threshold is met, an employer must consider the number of part-time and full-time employees it has within the United States or any of its territories on the date the employee takes leave. This includes: (1) employees on leave; (2) temporary employees even if jointly employed and maintained on another entity’s payroll; and (3) day laborers supplied by a staffing agency.

Joint and Separate Employers

The guidance documents shed light on the circumstances in which different entities will be considered joint employers for the purposes of determining whether the 500-employee threshold is met.

When one corporation has an ownership interest in another, the two entities are separate employers unless they are considered joint employers for purposes of the Fair Labor Standards Act (FLSA). If they are joint employers under those rules, then all of their common employees must be counted in determining coverage under EFMLEA and EPSLA.

Separately, two or more distinct corporate entities are generally regarded as separate employers unless they meet the integrated employer test under the Family and Medical Leave Act of 1993 (FMLA). If two or more entities do satisfy this test, then all of their employees must be counted in determining coverage under the EFMLEA.

Whether entities meet the joint employer criteria under FLSA and/or FMLA is an analysis that is best undertaken with the assistance of counsel.

Small Business Exemption

Employers with less than fifty employees may be exempt from providing paid child-care related leave under EPSLA and EFMLEA if compliance would jeopardize a business’ continuing viability. The guidance documents do not provide instructions on how a business can take advantage of this potential exemption. Rather, they state that businesses will need to document why they meet the relevant criteria, but that they should await the issuance of forthcoming regulations before sending anything to the Department of Labor.

Determining an Employee’s Regular Rate of Pay

EPSLA and EFMLEA both contemplate that an employee will be paid at his or her regular rate of pay (or the federal or applicable state minimum wage, if such wage is greater), subject to certain monetary caps. The guidance documents clarify that an employee’s regular rate of pay is the average of the employee’s regular rate over the six months preceding the date on which leave is taken. This includes commissions, tips and or piece rates as the case may be.

If an employee has been employed for less than six months prior to taking leave, the regular rate of pay is the average of the employee’s rate of pay for each week he or she has worked for the employer.

Alternatively, an employee’s regular rate can be determined by adding up all compensation that is part of the regular rate over the applicable time period, and dividing that sum by the hours actually worked during that time.

Where an Employee Has Multiple Qualifying Reasons for Sick Leave

The guidance documents clarify that employees are entitled to a maximum of eighty-hours of paid sick leave (for full-time employees) from April 1, 2020 through December 31, 2020. Therefore, by way of example, if an employee is subject to a government order of quarantine for two weeks and exhausts eighty hours of sick leave during this time, he or she cannot later take additional paid sick leave in order to care for a family member who becomes subject to a government order of quarantine.

On the other hand, if an employee only uses some of the paid leave to which he or she is entitled for one qualifying reason, he or she may take the remainder of the available paid leave later for a different qualifying reason. By way of example, if a full-time employee uses eight hours of paid sick leave to seek a diagnosis while experiencing symptoms of COVID-19, he or she can later use the remaining seventy-two hours of paid leave to care for a child whose school is closed due to the COVID-19 pandemic.

Effect of Previous Paid Leave

The guidance documents clarify what most lawyers knew already: if an employer voluntarily provided paid leave to an employee prior to April 1, 2020, that does not relieve the employer of the obligation to provide paid leave under EFMLEA or EPSLA after April 1, 2020.

Conclusion

The guidance documents provide important information that employers need to know to ensure compliance with EFMLEA and EPSLA. Some questions still abound, but hopefully they will be answered when formal regulations are issued in the days ahead.

We have been fielding calls every day from employers who are struggling to determine their obligations under New York’s new emergency paid sick leave law and the federal Families First Coronavirus Response Act (FFCRA). The aim of this post is to provide the simplest explanation of the circumstances in which these laws do and do not overlap.

Although the New York law and the FFCRA both provide for paid emergency sick leave, the New York law only provides for paid emergency sick leave in one limited situation. In contrast, the portion of the FFCRA known as the Emergency Paid Sick Leave Act (EPSLA) provides for paid emergency sick leave in six different situations.

If an employee requires paid emergency sick leave in one of the following five situations, New York employers with less than 500 employees need only comply with EPSLA. (Note, however, that in the case of number (3) below, an employee might be entitled to benefits under the New York Paid Family Leave Benefits Law, depending on the circumstances). Specifically, an employee, regardless of the duration of his or her employment, is entitled to paid emergency sick leave under EPSLA when he or she is unable to work (or work remotely) and:

  1. has been advised by a health care provider to self-quarantine due to concerns relating to COVID-19;
  2. has symptoms of COVID-19 and is seeking a diagnosis;
  3. is caring for a person who is subject to a federal, state or local quarantine or isolation order related to COVID-19, or has been advised by a health care provider to self-quarantine due to concerns relating to COVID-19;
  4. is caring for a son or daughter if the child’s school or place of care has been closed, or his or her child care provider is unavailable, due to COVID-19 precautions; or
  5. is experiencing any other substantially similar health condition as specified by the Secretary of Health and Human Services. This leave is available to all employees regardless of the duration of their employment.

The specific benefits that an employer must provide in these scenarios were the subject of one of my previous blog posts last week.

An employer’s obligations are more complicated in the one situation in which the New York paid emergency sick leave law and EPSLA overlap. Both laws provide for paid emergency sick leave where an employee is unable to work (or work remotely) and is subject to a government order of mandatory or precautionary quarantine or isolation related to COVID-19.

The New York law specifically addresses what would happen if a federal law was passed. It states that, in such an event, employees are not entitled to paid leave under New York law unless New York law provides employees with greater benefits than the federal law does. In that case, the employee must collect benefits under federal law, and can also collect the difference between the New York law benefit and the federal law benefit, either directly from the employer or through New York disability and paid family leave benefits, as the case may be.

What does that mean exactly? It depends on the size of the employer and, in some cases, the amount of net income the employer reported on the prior year’s tax return. Note that New York law imposes different requirements on employers depending on their number of employees as of January 1, 2020, while EPSLA requires all employers with less than five hundred employees on the date an employee takes leave to provide the same benefits.

For employers that had ten employees or less on January 1, 2020, and reported net income of less than $1 million on the prior year’s tax return:

  1. Under EPSLA, an employee is entitled to up to eighty hours of paid emergency sick leave (for full-time employees) at the employee’s regular rate of pay, capped at $511 per day and $5,110 for the entire period of leave.
  2. If the employee’s regular rate of pay is more than $511 per day, then the employee is also entitled to collect an amount that is equal to the difference between the maximum benefit available under federal law, and the maximum benefit available under New York law in combined New York disability and paid family leave benefits (the maximum combined amount of these New York benefits is $2,884.62 per week).
  3. After the exhaustion of benefits under EPSLA, the employee is entitled to collect combined New York disability and paid family leave benefits for the remainder of the duration of the government’s quarantine or isolation order, at the employee’s regular rate of pay, capped at the maximum combined benefit amount of $2,884.62 per week.

For employers that had ten employees or less on January 1, 2020 and reported net income of more than $1 million on the prior year’s tax return, and employers with 11-99 employees as of January 1, 2020 (regardless of the amount of the prior year’s net income):

  1. Under EPSLA, an employee is entitled to up to eighty hours (for full-time employees) of paid emergency sick leave at the employee’s regular rate of pay, capped at $511 per day and $5,110 for the entire period of leave. But, if the employee’s regular rate of pay is more than $511 per day:
    • For the first five days of leave, the employee is also entitled to collect from the employer an amount that is equal to the difference between the maximum benefit available under federal law, and the employee’s regular rate of pay (uncapped).
    • For the next five days of leave, the employee is also entitled to collect an amount that is equal to the difference between the maximum benefit available under federal law, and the maximum benefit available under New York law in combined New York disability and paid family leave benefits (the maximum combined amount of these New York benefits is $2,884.62 per week).
  2. After the exhaustion of benefits under EPSLA, the employee is entitled to collect combined New York disability and paid family leave benefits for the remainder of the duration of the government’s quarantine or isolation order, at the employee’s regular rate of pay, capped at the maximum combined benefit amount of $2,884.62 per week.

For employers that had one hundred employees or more on January 1, 2020 (regardless of the amount of the prior year’s net income):

  1. Under EPSLA (so long as the employer has less than 500 employees), an employee is entitled to up to eighty hours (for full-time employees) of paid emergency sick leave at the employee’s regular rate of pay, capped at $511 per day and $5,110 for the entire period of leave.
  2. If the employee’s regular rate of pay is more than $511 per day, then the employee is also entitled to collect from the employer an amount that is equal to the difference between the maximum benefit available under federal law, and the employee’s regular rate of pay (uncapped), for the entire period of EPSLA leave.
  3. If an employer has less than five hundred employees, EPSLA does not apply and the employer must simply provide fourteen calendar days of paid leave at the employee’s regular rate under New York law.
  4. Notably, the law is silent on the right of employees in this situation to collect any disability or paid family leave benefits at any point in time.

If this is not confusing enough, there are limited situations where, even though an employee cannot work remotely and is subject to a government order of quarantine or isolation, EPSLA might apply while New York law does not, or New York law might apply while EPSLA does not. Specifically, if an employer has more than 500 employees, EPSLA does not apply and the employer need only provide emergency paid leave under New York law. Or, if the employee is subject to a government order of quarantine or isolation because he or she has returned from travel to a country that is subject to a level 2 or level 3 health notice issued by the Centers of Disease Control and Prevention (subject to certain exceptions), paid emergency sick leave benefits are not available under New York law even though the employee is still entitled to EPSLA benefits.

Becoming fully familiar with employer obligations in this new and rapidly developing area of the law is no easy task. If you need assistance, contact me at jbaquet@jaspanllp.com

 

Tonight, President Trump signed into law the Families First Coronavirus Response Act (FFCRA). The passage of this law further complicates the web of paid leave laws that New York employers must navigate, given that, less than forty-eight hours ago, Governor Cuomo announced an agreement with legislators on a paid leave law at the state level.

Emergency Family and Medical Leave Expansion Act

Division C of the FFCRA is referred to as the Emergency Family and Medical Leave Expansion Act, and it amends the existing Family and Medical Leave Act of 1993 (commonly referred to as the FMLA).

The law now requires employers with less than 500 employees to provide twelve weeks of job-protected leave to any employee: (1) who has been on payroll for at least thirty calendar days; (2) is unable to work (or work remotely); (3) due to the need to care for a child under age 18 if school is closed or a childcare provider is unavailable; (4) as a result of an emergency declared by a federal, state or local government that is related to COVID-19.

The first ten days of leave are unpaid, although an employee may choose to use accrued paid time off during such time.

During the remaining period of leave, an employee must be paid two-thirds of his or her regular rate of pay for the number of hours the employee would usually be scheduled to work, up to $200 per day and $10,000 for the entire period of leave.

After the conclusion of emergency family leave, employers are generally obligated to restore an employee to his or her prior position or an equivalent position. However, employers with less than twenty-five employees are exempt from this requirement if: (1) the employee’s position is eliminated due to economic conditions or operational changes that affect employment and are caused by a public health emergency during the leave period; (2) the employer makes reasonable efforts to restore the employee to an equivalent position with equivalent pay and benefits; and (3) where those reasonable efforts fail, the employer makes additional reasonable efforts to contact the employee if an equivalent position becomes available at any time within one year of the conclusion of leave.

An employer may choose to exempt any employee who is a healthcare provider (i.e., a licensed doctor of medicine or osteopathy, or another person determined by the Secretary of Labor to be capable of providing health care services) or an emergency responder from the law’s protections.

In anticipation of the financial hardship facing some employers, the FFCRA permits the Secretary of Labor to enact regulations exempting businesses with fewer than 50 employees from compliance with these emergency family leave requirements if such compliance would jeopardize the business’ ability to continue operating.

These protections will expire on December 31, 2020 unless they are renewed.

Emergency Paid Sick Leave

Division E of the FFCRA is referred to as the Emergency Paid Sick Leave Act. It requires employers with less than 500 employees to provide paid sick leave to any employee who is unable to work (or work remotely) when the employee: (1) is subject to a federal, state or local quarantine or isolation order related to COVID-19; (2) has been advised by a health care provider to self-quarantine due to concerns relating to COVID-19; (3) has symptoms of COVID-19 and is seeking a diagnosis; (4) is caring for a person who is subject to a federal, state or local quarantine or isolation order related to COVID-19, or has been advised by a health care provider to self-quarantine due to concerns relating to COVID-19; (5) is caring for a son or daughter if the child’s school or place of care has been closed, or his or her child care provider is unavailable, due to COVID-19 precautions; or (6) is experiencing any other substantially similar health condition as specified by the Secretary of Health and Human Services. This leave is available to all employees regardless of the duration of their employment.

Full-time employees must be provided with 80 hours of paid sick leave. Part-time employees must be provided with an amount of paid sick leave that is equal to the average number of hours that the employee works in a two-week period.

The amount to be paid depends on the reason for the employee’s leave. In the case of reasons (1), (2) and (3) above, the employee is to be paid at the regular rate of pay, except that paid sick time may not exceed $511 per day, and $5,110 in total. In the case of reasons (4), (5) and (6) above, the employee is paid at two-thirds of the regular rate of pay, except that paid sick time may not exceed $200 per day, and $2,000 in total.

Employers may not require employees to search or arrange for another employee to cover a missed shift, and may not take adverse action against employees who request or use paid sick leave. They also may not require employees to use other accrued paid time off before using the paid sick leave required by the FFCRA.

As in the case of paid family leave, employers may choose to exclude healthcare workers and emergency responders from these paid sick leave protections.

These protections will expire on December 31, 2020 unless they are renewed.

Employer Tax Relief

Division G of the FFCRA provides tax credits to employers who provide paid sick leave and/or paid emergency family leave benefits pursuant to the law.