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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.

Vector of Coronavirus 2019-nCoV and Virus background with disease cells. COVID-19 Corona virus outbreaking and Pandemic medical health risk concept. Vector illustration eps 10

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.

Sick Leave

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

 

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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.

New corona virus, novel Coronavirus 2019 disease, COVID-19, nCoV. It SARS like symptom as respiratory syndrome, viral pneumonia. COVID concept

Tonight, Governor Cuomo announced that a deal has been reached to provide all employees with job-protected leave in the event they are subject to a mandatory or precautionary order of isolation or quarantine, subject to certain exceptions. The terms of the deal are set out in a legislative program bill, and some of the most critical provisions are summarized below.

The type of leave employees are entitled to depends in part on the size of the employer. An employer’s size is determined by the number of people in its employ as of January 1, 2020.

In the case of employers with ten or fewer employees and net income of $1 million or less as reported on the previous year’s tax return, employees are entitled to unpaid job-protected leave for the duration of any mandatory or precautionary quarantine or isolation related to COVID-19 that is ordered by the State of New York, the Department of Health, a local board of health or any government agency authorized to issue such an order (the “Agencies”). Employees are entitled to collect disability and paid family leave during this time.

In the case of employers with ten or fewer employees and net income greater than $1 million as reported on the previous year’s tax return, and employers with between and eleven and ninety-nine employees, employees are entitled to five paid sick days and unpaid job-protected leave thereafter for the duration of any period of mandatory or precautionary quarantine or isolation related to COVID-19 that is ordered by one of the Agencies. Employees are entitled to collect disability and paid family leave during the unpaid portion of the job-protected leave.

In the case of employers with 100 or more employees, employers must provide fourteen calendar days of paid sick leave to each employee for the duration of any period of mandatory or precautionary quarantine or isolation related to COVID-19 that is ordered by one of the Agencies.

To the extent employers are required to provide paid sick leave, such leave is in addition to and may not be deducted from an employee’s existing accrued paid time off.

No paid leave will be provided to any employee who becomes quarantined or isolated as a result of having traveled to a country for which the Centers for Disease Control and Prevention (“CDC”) has issued a level 2 or level 3 health notice, so long as such travel was not required by the employer and the employee had notice of the CDC health notice. In these circumstances, an employee may use accrued sick time or, if such time has been exhausted, take unpaid leave.

Paid leave also need not be provided to employees who are asymptomatic or have not yet been diagnosed with a medical condition and are physically able to work while quarantined or in isolation, whether through remote access or otherwise.

Additionally, paid leave is not required where an employer closes due to a reason related to COVID-19 or because of a mandatory order of closure by an authorized government agency. In such situations, employees may be entitled to unemployment benefits without being subject to a waiting period.

This is a developing situation, and we will provide updates in the near future and when the bill is signed into law.

 

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Employers have a duty to provide employees with a workplace that is free from recognized hazards that are likely to cause death or serious physical harm. Given the rapid spread of the novel coronavirus (COVID-19), what should New York employers do to fulfill this duty while balancing legitimate business needs? And, what legal pitfalls must New York employers be aware of in responding to this pandemic? Read on for answers to these urgent questions.

Preventative Measures

Every employer should begin by tasking a qualified individual to stay abreast of COVID-19 guidelines and recommendations issued by the Center for Disease Control and Prevention (CDC) and state or local departments of health, as well as applicable laws and regulations. All employees should be notified of who the designated individual is, and it should be made clear that any questions can be directed to that person.

At present, the CDC’s most prominent message is: “the best way to prevent illness is to avoid being exposed to this virus.” Employers can take a number of steps to ensure that their employees do just that.

First, employers should educate employees. Providing staff with detailed information (preferably in writing) about the signs and symptoms of COVID-19, and the manner in which the virus is transmitted, will enable employees to make informed decisions about their daily activities. This information is readily available on the websites of CDC and the World Health Organization.

Employers should also remind employees of the importance of good hygiene. This includes frequent hand washing using soap and warm water for at least twenty seconds, and covering one’s mouth and nose (preferably with the crook of an elbow) when coughing or sneezing. Employers should make hand sanitizer that contains at least sixty percent alcohol available in common areas, but should emphasize that hand washing is a far superior method of eliminating germs. It is also important to ensure that frequently touched surfaces are cleaned and disinfected at least daily, and more frequently when practicable.

Second, employers should clearly define what is expected of employees who are ill. The CDC recommends that employees with symptoms of respiratory illness and a fever greater than 100.4 Fahrenheit stay home. Employers may require employees with these symptoms to refrain from coming into the workplace, and may send home employees who report to work while exhibiting such symptoms. The CDC recommends that such individuals stay home until they have been free of fever and other symptoms for a minimum of twenty-four hours without the use of fever-reducing medications such as ibuprofen or acetaminophen.

Employers should also prohibit employees who have tested positive for COVID-19 from entering the workplace, and should immediately contact the department of health to ascertain what type of containment and/or sterilization measures should be followed. Employers must also inform other employees that they may have been exposed to COVID-19 through contact with an infected employee, but should keep the infected employee’s identity confidential.

The CDC recommends against requiring employees to provide a physician’s certification of fitness for duty before allowing them to return to work, because physicians will likely become overwhelmed during this time and unable to promptly provide such documentation. Instead, the CDC recommends that employees be permitted to return after at least twenty-four hours free of fever and symptoms without the use of fever-reducing medications. However, in circumstances in which the Americans with Disabilities Act or the Family Medical Leave Act are applicable, an employer may require an infected employee to provide a physician’s note before returning to work.

Third, employees may be excluded from the workplace if, despite being asymptomatic, they have had close contact with another person who is symptomatic and has had a positive laboratory test for COVID-19. Employers may also exclude from the workplace, for a period of fourteen days, employees who have recently returned from locations designated by the CDC as subject to widespread, ongoing transmission of the virus. At present, China, Iran, Italy and Japan have been given this classification by the CDC.

Fourth, employers should consider whether non-essential work travel and large events or gatherings (both inside and outside of the workplace) can reasonably be cancelled or postponed.

Legal Considerations

In formulating and implementing protocol addressing the spread of COVID-19, employee safety is not the only concern. Employers must be sure to comply with existing federal, state and local labor and employment laws.

One of the simplest ways of doing so is to ensure that policies are applied consistently, in a neutral manner and based strictly on safety considerations. For example, an employer must not restrict employees from the workplace simply because they are of Italian or Chinese descent (or are perceived to be even if that perception is incorrect). Similarly, employers should not make exceptions for employees returning from one high-risk country but not for employees returning from a different country of equal risk.

Employers must also be mindful of wage and hour laws. For example, employers must consider whether they are obligated to pay employees who are unable to report to the workplace due to the implementation of COVID-19 response protocol.

Employers may generally direct non-exempt employees not to report to work without any obligation to pay wages. In New York, however, employers must be mindful of “call-in pay” obligations. For most employers, if an employee reports to work on a given day and is later sent home before the end of a shift, the employee must be paid at least the minimum wage for four hours or the duration of the scheduled shift, whichever is shorter.

Employers are generally obligated to pay exempt employees for the entire week if they perform any work in that work week, subject to certain exceptions. For example, the pay of an exempt employee may be docked for any full (not partial) day on which the employee fails to perform any work, if he or she has no available paid time off pursuant to company policy. Because the circumstances in which the pay of exempt employees may be docked are limited and fact specific, it is recommended that employers handle these situations with caution.

What if employees do have accrued paid time off? Generally, New York employers can require employees to use paid time off during a period of illness or quarantine so long as doing so is consistent with the employer’s policies. If an employee lacks accrued paid time off, employers must still consider whether, depending on the circumstances, an employee is entitled to unpaid job-protected leave under the Family Medical Leave Act or the Americans with Disabilities Act. And, where an employee requires leave to care for a family member afflicted with COVID-19, the New York Paid Family Leave Benefit Law might apply.

The CDC and state and local authorities are urging employers to be flexible in providing paid leave to employees who are ill or have potentially been exposed to COVID-19. There are significant practical benefits in heeding this advice. Employees are more likely to comply with a direction to stay home when sick if paid leave is available. This furthers the goal of slowing transmission of COVID-19, and has the potential to encourage employee loyalty and decrease rates of attrition. Ultimately, whether an employer should afford extra paid time off to employees is a business decision as to whether the cost of doing so is outweighed by the benefits of further limiting COVID-19 risk.

The law allows employers to deviate from its usual policies and to provide additional paid leave to employees, so long as such leave is provided in a neutral and non-discriminatory manner. In fact, it has been reported that Governor Cuomo is in the process of proposing legislation requiring paid leave for employees affected by COVID-19.

Employers may also encourage or require employees to telecommute when possible while the COVID-19 pandemic continues, but should be sure to consider wage and hour issues associated with this practice. In the case of non-exempt employees, it is of critical importance that hours are accurately tracked so that all time worked is compensated and overtime is paid when required. Employers should make use of timekeeping apps or software, and should have written policies which make it clear that non-exempt employees must accurately keep track of their time. In the case of exempt employees, while tracking time is potentially less critical from a wage and hour perspective, it remains important from a business perspective to ensure that employees are actually working and doing so productively.

In the end, this rapidly evolving situation presents unique challenges for New York employers of all sizes. A qualified professional can assist in developing comprehensive protocol and addressing personnel issues as they arise.

**This information is current as of March 10, 2020 and is subject to change.**

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Over the past several years, Governor Cuomo has imposed additional requirements on employers in his annual budgets. These changes often catch some employers by surprise upon the adoption of the final budget. As the State nears approval of the budget for the 2021 fiscal year, it would be prudent for employers to remain apprised of potential changes that may affect their organizations.

One potential change included in Governor Cuomo’s proposed 2021 budget involves the disclosure of an organization’s sexual harassment data when submitting a competitive bid.  This change would further amend State Finance Law § 139-l, which was originally enacted as part of the State budget for the 2019 fiscal year. State Finance Law § 139-l currently requires every bid for a contract with the “State or any public department or agency thereof” to include a certification that the employer has complied with the annual sexual harassment training requirements.  The 2021 proposed budget doubles down on the information that must be included in such bids, adding the following to the list of required disclosures:

  • The name of the bidder and the total number of its employees;
  • The total number of adverse judgments or administrative rulings related to allegations of sexual harassment during the prior year;
  • Whether equitable relief was awarded against the employer in any adverse judgment or administrative rulings;
  • The total number of settlements entered into in the prior year where the employer compensated an employee or nonemployee (or provided some other form of consideration) based on an allegation that the individual was the victim of sexual harassment in the workplace; and
  • The total number of settlements entered into in the prior year that related to allegations of sexual harassment committed by a corporate executive (irrespective of whether such conduct occurred in the workplace).

In addition to these requirements, the State, public department or agency thereof, must submit copies of every bidder’s sexual harassment report to the State Division of Human Rights and the Office of the State Comptroller.  The Comptroller would then be responsible for preparing an annual report to be submitted to various governmental officials which summarizes the sexual harassment data.

If this legislation is approved, it may impact how organizations handle sexual harassment disputes going forward. For instance, organizations that derive a majority of their business from public contracts may have more of an incentive to fully litigate sexual harassment claims that they deem meritless.  Specifically, an organization may wish to limit the number of settlement agreements disclosed as part of the bid so that it does not become a public record.

Fully litigating sexual harassment claims may also improve the organization’s chances to secure the contract, as public agencies may wish to disqualify bidders who report an abundance of adverse rulings and/or settlement agreements. However, it is important to note that the legislation is silent regarding whether sexual harassment data may be considered in awarding the contract to the “lowest responsible bidder.”  Thus, if the legislation is adopted, there would be an open question as to whether sexual harassment data may be taken into account when determining whether the low bidder is in fact a “responsible bidder.”

Other potential bidders may be completely discouraged from submitting a bid out of fear that their sexual harassment data will become public.  Thus, public agencies may see limited competition in procuring products and/or services as a result of this legislation. Public contractors and public agencies should certainly monitor this legislation closely and prepare for its potential adoption.  If approved, this amendment to State Finance Law § 139-l would take effect on July 1, 2020.

The businessman chooses GIG ECONOMY button on the touch screen with a futuristic background .The concept GIG ECONOMY .
The businessman chooses GIG ECONOMY button on the touch screen with a futuristic background .The concept GIG ECONOMY .

Most employers recognize that there are situations in which they might be liable to their employees. For example, employees may bring claims against an employer for wrongful termination. If an employee is injured on the job, he or she may have a claim arising from such injuries. Employers often have a blind spot, however, when it comes to leased or temporary workers.

Employers commonly fail to recognize that they may be liable to leased or temporary workers in certain situations. Employers may also be unaware that their insurance policies might specifically exclude such workers from the scope of coverage. As a result, employers sometimes find themselves with no choice but to come out of pocket to resolve claims brought by leased or temporary workers.

There are specific steps an employer can take to protect itself from liability to leased or temporary workers. First, an employer should make sure that its written agreement with the leasing or staffing agency that is providing the leased or temporary workers includes an indemnification provision. Such a provision requires the leasing or staffing agency to indemnify the employer and hold it harmless for any claims brought by a leased or temporary worker.

Employers must also address the issue of insurance. Most commercial general liability (“CGL”) insurance policies contain an exclusion for bodily injuries to an employee of the insured company arising out of and in the course of employment. The term “employee” as used in the exclusion in the CGL policy typically includes leased or temporary workers. That means that your CGL insurance policy would not provide liability insurance coverage if your company is sued by a leased or temporary worker who was injured on the job.

To avoid this situation, an employer can request that the leasing or staffing agency include an Alternate Employer Endorsement on a Workers’ Compensation and Employer’s Liability Policy where your company is specifically scheduled as an alternate employer that is covered by the policy. An employer can also contact its own insurance broker about purchasing certain endorsements that can extend coverage for leased or temporary workers. One option is adding an endorsement to your company’s CGL policy which is typically known as Coverage for Injury to Leased Workers, which means that for purposes of the CGL policy, the term “employee” does include a leased or temporary worker and the exclusion would not apply to bar liability coverage.

The same precautions should be taken with respect to employment practices liability insurance (“EPLI”). EPLI typically provides coverage for claims asserted against an employer by an employee for, among other things, wrongful termination, discrimination, harassment and wage and hour violations. As in the case of CGL, employers may request to be named an additional insured on the EPLI policy of the leasing or staffing agency from which they hire leased or temporary employees. An employer can also speak to its own insurance broker about whether its EPLI policy covers leased or temporary workers, or if such coverage can be added through the purchase of a rider.

What happens if a temporary or leased employee sues an employer but none of the recommended precautions have been taken? There are still defenses the employer may assert in a lawsuit.

In New York, workers’ compensation benefits are the exclusive remedy for an injured employee. This means that, if an employee injured in the course of employment receives workers’ compensation benefits, the injured employee cannot sue his or her employer for damages. Under the New York Workers’ Compensation Law, a person may be deemed to have more than one employer — a general employer and a special employer. A “special employee” is a person who is transferred for a limited time to the service of another. Principal factors for determining a special employment status include who has the right to control the employee’s work, who is responsible for the payment of wages and the furnishing of equipment, who has the right to discharge the employee and whether the work being performed is in furtherance of the special employer’s or the general employer’s business. The most significant factor is who controls and directs the manner, details, and ultimate result of the employee’s work. Therefore, the receipt of workers’ compensation benefits from a general employer (e.g., a leasing or staffing company) precludes an employee from commencing a negligence action against a company who qualifies as a special employer of that injured leased or temporary worker.

With regard to claims of wrongful termination, discrimination and harassment, the law recognizes the “joint employer” doctrine, pursuant to which it is possible that a staffing or leasing agency and the company using the agency’s services might both be considered employers of the leased or temporary worker. The United States Department of Labor recently enacted regulations governing the determination of who qualifies as a joint employer, which will be the subject of a separate blog post in the near future.

In sum, it is important for employers to anticipate their potential exposure to liability when utilizing leased or temporary workers. By taking the time to consult attorneys and insurance professionals, an employer can greatly reduce that exposure.

Voting Booths

With primary elections in New York just two months away, employers must familiarize themselves with last year’s significant changes to the New York State Election Law.

Previously, employees were entitled to take up to two hours of paid leave to vote in any primary or general elections at the federal, state, county, city, town, or village level, as well as any special elections called by the Governor. However, employees were only entitled to such leave if they did not have four consecutive hours to vote before or after a working shift. This is no longer the case.

All employees are now entitled to take up to three hours of paid time off to vote in these types of elections (but not school district, library district, fire district, or special town elections), as long as they notify the employer at least two business days before the election. Although three hours is the maximum amount of paid leave an employee is entitled to, the law only permits employees to take off the actual amount of time needed to vote in an election.

According to guidance from the Board of Elections, employers are not in the best position to determine how much time an employee actually needs to vote, especially since waiting times and traffic conditions are unpredictable. Employers may want to engage in an interactive process with employees to estimate how much time they need to vote, but should be careful not to restrict employees’ ability to take the full three hours at the risk of violating the statute.

Employers should also be cautious in deciding whether to require employees to provide proof that they voted during their paid voting leave. Although the law is silent on this, the Department of Civil Service has taken the position that requiring proof of voter registration or voting would violate the statute.

These changes to the Election Law may result in employers facing last-minute scrambles to maintain their flow of business or needing to hire temporary replacements to cover shifts. And, given the varying dates of local elections, employers may not always be able to predict when employees will request paid voting leave. Employers are, however, permitted to designate whether employees may take leave at the beginning or end of their working shifts. This affords some scheduling flexibility and allows the employer to control when certain employees will be at work.

Some employers may find themselves particularly burdened by the recent amendments to the Election Law. For example, school districts may struggle to find coverage for employees taking voting leave given the current shortage of substitute teachers and per diem employees. Although the Elections Committee of the New York State Senate is considering proposed legislation that would restore the original four hour limitation for school district employees, it remains to be seen whether the law will change once again.

Close Up Of Blindfolded Lady Of Justice

Wage and hour lawsuits (e.g., those involving an employee’s claim that he or she was deprived of overtime pay) under the Fair Labor Standards Act (“FLSA”) pose unique challenges for employers. This is due in part to the fact that the FLSA entitles a prevailing plaintiff to the payment of his or her attorneys’ fees by the employer and, in some cases, an award of double damages.

Additionally, unlike most other types of labor and employment cases, actions involving the FLSA cannot be settled without the approval of a court or the supervision of the U.S. Department of Labor. In deciding whether to approve such a settlement, courts consider whether the terms of the parties’ agreement are the product of a “reasonable compromise” rather than “overreaching” by the employer.

One component of the “reasonable compromise” analysis has historically been whether the plaintiff’s attorneys’ fees were proportional to the amount of plaintiff’s recovery. Federal courts in the Second Circuit (including those in New York) usually capped the amount of plaintiff’s attorneys’ fees at one-third of plaintiff’s recovery. The practical effect of this was that, if plaintiff’s attorney spent significant time to recover a relatively small amount of damages, the amount of fees recoverable by plaintiff’s counsel would not fairly compensate the attorney for the work performed. This deterred plaintiffs’ attorneys from taking smaller cases, and left employers with less incentive to settle early.

On February 4, 2020, the U.S. Court of Appeals for the Second Circuit overruled the so-called “proportionality rule”. In Fisher v. SD Protection, Inc., ___ F.3d ___ (2d Cir. 2020), the District Court rejected a FLSA settlement which provided that the plaintiff was to receive $2,000 and his counsel was to receive $23,000. The District Court effectively rewrote the settlement so that plaintiff would receive $15,000 and his attorneys would receive the balance.

The Second Circuit reversed, finding that the proportionality rule impeded the FLSA’s purpose of “ensur[ing] a fair day’s pay for a fair day’s work”, and had to be eliminated in order to “encourage members of the bar to provide legal services to those whose wage claims might otherwise be too small to justify the retention of able, legal counsel.”

The Second Circuit also held that District Courts are not at liberty to rewrite parties’ settlement agreements. If the Court finds the terms of a settlement unreasonable, it must reject the agreement and send it back to the parties for renegotiation or with a direction to proceed with the litigation. The Court may, however, make suggestions about what it would consider a reasonable amount of attorneys’ fees for plaintiff’s counsel.

The Second Circuit’s determination in Fisher fortifies the protections available to employees under the FLSA. However, employers must take heed of this increased exposure to liability, and consider whether an early settlement (at a stage when plaintiff’s attorneys have not spent significant time on the matter) would be more advantageous in the long-run as a matter of dollars and cents.