By David Briggs and Randall Sutton, Attorneys in the Employment Law & Litigation Practice Group
On March 18, 2020, President Trump signed into law the Families First Coronavirus Response Act.
The law met with large bipartisan support to combat the coronavirus. Of note for employers, are two new ways where employers may have to provide paid leave.
The new law, which goes into effect on April 2, applies to all private employers with 500 or fewer employees. So, the impact on small businesses may be significant.
The law enacted two kinds of paid leave:
12 Weeks Paid Emergency Family leave for School & Childcare Absences
- Which employers have to follow the new law? Private employers with fewer than 500 employees must comply with the law. However, employers with fewer than 50 employees may apply for a hardship exemption if the employer can prove to the DOL that compliance with the paid leave requirements would jeopardize the viability of the business. The procedure for claiming an exemption and the particular showing the DOL will require have not been disclosed at this stage.
- Who is eligible? Employees who have worked for employers for at least 30 days are eligible for paid emergency family and medical leave.
- What can employees take the leave for? Employees may use the leave if they are unable to work or telework because their minor child’s school or daycare is closed due to a public health emergency (as is the case in Oregon and Washington).
- How much leave do they receive? Employees receive up to 12 weeks of leave.
- How much do employees get paid? The first ten (10) days of emergency family and medical leave are unpaid. However, the employee can use Paid Emergency Sick Leave (see below). The remainder of the leave is paid at the rate of at least 2/3 of the employee’s regular pay during the leave, up to a maximum of $200/day and $10,000 total.
- Is there job protection? Employers with 25 or more employees are required to reinstate the employee to the same position or a similar position if the job has been eliminated. Employers with fewer than 25 employees are required to restore the employee at the end of the leave period unless the job no longer exists.
- How does my company pay for this? Employers are entitled to a tax credit in an amount equal to any emergency family and medical leave wages they are required to pay.
80 Hours of Emergency Paid Sick Leave for COVID-19 Reasons
- Which employers have to follow the new law? Private employers with fewer than 500 employees must comply with the law. However, employers with fewer than 50 employees may apply for a hardship exemption if the employer can prove to the DOL that compliance with the paid leave requirements would jeopardize the viability of the business. The procedure for claiming an exemption and the particular showing the DOL will require have not been disclosed at this stage.
- Who is eligible to receive emergency paid sick leave? All employees are eligible, regardless of tenure.
- What can employees take the leave for? If the employee is subject to any local, federal, or quarantine order;
- The employee has been advised by a medical provider to self-quarantine due to COVID-19 concerns;
- If the employee is experiencing symptoms of and are seeking medical care for symptoms of COVID-19;
- If the employee is caring for an individual for any of the reasons above;
- If the employee is caring for a child whose school has been closed, or whose childcare provider is unavailable, due to a public health emergency related to COVID-19 (as is currently the case in Oregon and Washington); or
- The employee is experiencing any other “substantially similar condition” specified by the Secretary of HHS in consultation of the Secretaries of the Treasury and DOL
- How much paid leave does the eligible employee receive? Full-time employees will be eligible for up to 80 hours of paid sick leave and part-time employees will be eligible for a prorated amount based on their average hours worked over a two-week period.
- How much do employers need to pay employees? Employees must be paid their regular rate, up to a maximum of $511 per day and $5,100 total for reasons 1-3 listed above (which are generally related to the employee’s own illness or quarantine). Employees must be paid 2/3 of their regular rate, up to a max of $200/day and $2,000 total for reasons 4-6 above (care for others or school closures).
- How does my company pay for this? Employers are entitled to a tax credit in an amount equal to any emergency family and medical leave wages they are required to pay.
The bill also includes a prohibition on retaliating against any employee who takes leave in accordance with the new law. Failure to pay required leave will be treated as a failure to pay minimum wages in violation of the Fair Labor Standards Act (which means penalties, interest, and attorney fees).
Is it Time for Layoffs?
Employers will need to decide whether layoffs are appropriate. If an employer decides to layoff all or a portion of its workforce, there are additional considerations. It is important to note unemployment insurance benefits will be temporarily changed under the law as well, allowing employees easier access to benefits for a short-term layoff due to the coronavirus.
Employers should take care not to conduct a layoff designed to circumvent the new law. Layoffs due to business closures or significant reduction in operations should not be a problem. However, selective furloughs of employees could pose legal risks.
As always, employers should be on guard with any termination, including layoffs, and properly document their decisions related to the layoff to protect against potential claims in the future.
Conclusion
The laws and analysis seem to change quickly, and more clarity will come as DOL issues rules on these new paid leaves. We strongly recommend obtaining legal advice as to your particular situation.
If you have questions on responding to the coronavirus in your workplace, contact David Briggs (dbriggs@sglaw.com) or Randall Sutton (rsutton@sglaw.com)
David Briggs and Randall Sutton are partners in the Employment Law & Litigation practice group. David is also a member of the Health, Dental and Agri-Business industry teams, and Randall is a member of the Wine & Vine and Health industry teams . The information in this article is not intended to provide legal advice. For professional consultation, please contact David at dbriggs@sglaw.com or Randy at rsutton@sglaw.com at Saalfeld Griggs PC. 503.399.1070. © 2020 Saalfeld Griggs PC
