The Labor Commissioner, Paid Sick Leave and COVID-19

This is just a link to the DLSE’s FAQ’s about California’s Paid Sick Leave and the Labor Commissioner’s interpretation of its use for COVID-19 related events (sick employees, employees’ sick relatives, employees staying home to care for kids).

Who is “Essential”?

I opened my laptop this morning to draft an incredible, helpful blog post about what industries and workers are “essential” under the various government orders right now.  And Rob Nuddleman had already posted one! Rassafrassa!  Rather than blatantly plagiarize, please check it out.

Please let me know if you have questions, concerns, etc. about your employment law needs.

Please stay safe (and sane).

The New Federal Paid Leave and Paid Sick Leave Law

The Families First Coronavirus Response Act was signed into law last night and will take effect April 1, 2020 (fifteen days later). By that date, the U.S. Department of Labor is to issue guidelines to assist employers in calculating how much paid leave their employees should get. After that, employees should be able to notify their employer, take the leave, and get paid by their employer the amount specified in the law.

The law is a response to the impact of COVID-19 on employees with respect to the need to shelter in place, the closing of businesses, and the closing of schools.  The law also contains provisions about nutrition for families (WIC and SNAP, etc.), I’m not addressing those changes here.

The two new programs this post will focus on about the Families First Coronavirus Response Act (FFCRA)  are the two provisions providing paid leave to employees forced to miss work because of the COVID-19 outbreak: an emergency expansion of the Family Medical Leave Act (FMLA) and a new federal paid sick leave law. I also talk about how these programs will be paid for.

In general, the FFCRA gives qualified workers two weeks of paid sick leave if they are ill, quarantined or seeking diagnosis or preventive care for coronavirus, or if they are caring for sick family members. This is the Paid Sick Leave portion.

The law also gives 12 weeks of paid leave to people caring for children whose schools are closed or whose child care provider is unavailable because of coronavirus. This is the Emergency FMLA part.

As above, the law takes effect April 2, 2020 and is to end December 31, 2020. 

Emergency Family and Medical Leave Expansion

  • Expanded Coverage and Eligibility

FFCRA significantly amends and expands the FMLA on a temporary basis (through December 31, 2020).

Under existing law, the FMLA only applies to employers with 50 or more employees.  Under the FFCRA, employees who work at companies with fewer than 500 employees are eligible for the job-protections of the FMLA.

Another big change is that any employee who has worked for the employer for at least 30 days prior to the designated leave may be eligible to receive paid family and medical leave (“Emergency FMLA”). Employers must provide job-protected leave to employees for a COVID-19 coronavirus-designated reason.

Healthcare providers and emergency responders may be exempt.  Also, small businesses with fewer than 50 employees may be exempt if the required leave would jeopardize the viability of their business.

  • Reasons for Emergency FMLA

The reasons for leave that will trigger the Emergency FMLA paid time off are somewhat limited: Any individual employed by the employer for at least 30 days (before the first day of leave) may take up to 12 weeks of job-protected leave to allow an employee, who is unable to work or telework, to care for the employee’s child (under 18 years of age) if the child’s school or place of care is closed or the childcare provider is unavailable due to a public health emergency.

  • Paid Leave

The first 10 days of Emergency FMLA may be unpaid. During this 10-day period, an employee may elect to substitute any accrued paid leave (like vacation or sick leave) to cover some or all of the 10-day unpaid period. After the 10-day period, the employer generally must pay full-time employees at two-thirds the employee’s regular rate for the number of hours the employee would otherwise be normally scheduled up to a limit of $200 per day and $10,000 in the aggregate per employee.

  • Calculating Pay for Non-Full Time Employees

Employees who work a part-time or irregular schedule are entitled to be paid based on the average number of hours the employee worked for the six months prior to taking Emergency FMLA. Employees who have worked for less than six months prior to leave are entitled to the employee’s reasonable expectation at hiring of the average number of hours the employee would normally be scheduled to work.

  • Job Restoration

Employers with 25 or more employees will have the same obligation as under traditional FMLA to return any employee who has taken Emergency FMLA to the same or equivalent position upon the return to work. However, employers with fewer than 25 employees are generally excluded from this requirement if the employee’s position no longer exists following the Emergency FMLA leave due to an economic downtown or other circumstances caused by a public health emergency during the period of Emergency FMLA. This exclusion is subject to the employer making reasonable attempts to return the employee to an equivalent position and requires an employer to make efforts to return the employee to work for up to a year following the employee’s leave.

Emergency Paid Sick Leave

  • Reasons for Paid Sick Leave

The FFCRA allows an eligible employee to take paid sick leave because the employee is:

  1. Subject to a federal, state or local quarantine or isolation order related to COVID-19;
  2. Advised by a health care provider to self-quarantine due to COVID-19 concerns;
  3. Experiencing COVID-19 symptoms and seeking medical diagnosis;
  4. Caring for an individual subject to a federal, state or local quarantine or isolation order or advised by a health care provider to self-quarantine due to COVID-19 concerns;
  5. Caring for the employee’s child if the child’s school or place of care is closed or the child’s care provider is unavailable due to public health emergency; or
  6. Experiencing any other substantially similar condition specified by the Secretary of Health and Human Services in consultation with the Secretary of the Treasury and the Secretary of Labor.

Of note, caring for another who is subject to an isolation order or advised to self-quarantine as described above is not limited to just family members.

  • Eligibility

This provision requires employers with fewer than 500 employees to provide full-time employees (regardless of the employee’s duration of employment prior to leave) with 80 hours of paid sick leave at the employee’s regular rate (or two-thirds the employee’s regular rate to care for qualifying reasons 4, 5, or 6 listed above).

  • Cap on Paid Sick Leave Wages 

The FFCRA places limits on paid sick leave. Specifically, paid sick leave wages are limited to $511 per day up to $5,110 total per employee for their own use and to $200 per day up to $2,000 total to care for others and any other substantially similar condition.

  • Carryover and Interaction with Other Paid Leave

This paid sick leave will not carry over to the following year and may be in addition to any paid sick leave currently provided by employers.

  • Calculating Rate of Pay

Employees who work a part-time or irregular schedule are entitled to be paid based on the average number of hours the employee worked for the six months prior to taking paid sick leave. Employees who have worked for less than six months prior to leave are entitled to the average number of hours the employee would normally be scheduled to work over a two-week period. A business employing fewer than 500 employees is required, at the request of the employee, to pay a full-time employee for 80 hours of mandated emergency paid sick leave instead of the initial 10 days of unpaid leave permitted by the Emergency Family and Medical Leave Expansion Act (summarized above).

HOW DO EMPLOYERS PAY FOR THIS?

Employers will be reimbursed for the full amount of what they pay out under the FFCRA within three months, in the form of a payroll tax credit.  (If an employer can’t wait that long, the Trump Administration said it will advance the money – we await the mechanics of that).

The reimbursement will also cover the employer’s contribution to health insurance premiums during the leave.

The amount paid out by the employer is fully refundable – which means that if the amount an employer pays out to workers under the FFCRA is larger than what they owe in taxes, the employer will be paid by a check for the difference.

Specifically, the FFCRA creates provides a series of refundable tax credits for employers who are required to provide the Emergency Paid Sick Leave and Emergency Paid Family and Medical Leave. These tax credits are allowed against the employer portion of Social Security taxes.

Employers are entitled to a refundable tax credit equal to 100% of the qualified sick leave wages paid by employers for each calendar quarter in adherence with the Emergency Paid Sick Leave Act. The qualified sick leave wages are capped at $511 per day ($200 per day if the leave is for caring for a family member or child) for up to 10 days per employee in each calendar quarter.

Similarly, employers are entitled to a refundable tax credit equal to 100% of the qualified family leave wages paid by employers for each calendar quarter in accordance with the Emergency Family and Medical Leave Expansion Act. The qualified family leave wages are capped at $200 per day for each individual up to $10,000 total per calendar quarter. Only those employers who are required to offer Emergency FMLA and Emergency Paid Sick Leave may receive these credits.

Questions!

We have a few!  Like does an employer need to verify that an employee “has kids”?  What if your employee doesn’t actually have custody of the school-age children – do we have to track down the employee for “proof”?

What if an employee is already on protected FMLA and then this hit – do they get another 12 weeks of protected time off (with pay)? (I read the law as “yes” to that)

More to come?

We’ll keep you updated as we learn more about the response of local, state and the federal government to the COVID-19 situation.

 

California FTB Already extended the tax deadlines!!

Rob Nuddleman (www.nuddleman.com) pointed out that I didn’t mention that California’s FTB ALREADY extended the state tax deadlines!

On March 13, 2020, the Franchise Tax Board announced special tax relief for California taxpayers affected by the COVID-19 pandemic.
Affected business and individual taxpayers are granted an extension to file 2019 California tax returns, and make certain payments, until June 15, 2020. According to the Franchise Tax Board, a taxpayer does not have to be directly impacted to qualify for relief. Taxpayers who experience any difficulty in filing or paying, as a result of COVID-19, are included in this relief. 
Thanks Rob!

IRS Tax PAYMENT (not filing) deadline extended to July 15, 2020

The IRS announced that the April 15, 2020 tax payment deadline for individuals and businesses has been extended to July 15, 2020.  This does not extend the time to file a return, but if you act promptly, you can request a six month extension to file.

(This is not for state taxes!)

 

 

Relief regarding mass terminations from Governor Newsom

A new Executive Order signed by Gov. Newsom may be helpful for any mass-reduction/layoff caused by COVID-19 (but as usual, be mindful of any federal law that may still limit steps you can take).

 

Disability Laws and COVID-19

While California is much more protective of disabled (or perceived to be disabled) employees, the EEOC’s “What You Should Know about the ADA, the Rehabilitation Act, and COVID-19” can be helpful for general guidance about your employment practices. Meaning, if what you want to do runs afoul of the EEOC, it will likely run afoul of California’s rules. But  . . . beware that California may have even stricter rules – so even if you are safe under the EEOC’s rules, you may be violating California laws. Got it?

Next . . it looks like the Senate passed the second version of the House’s COVID 19 relief bill. We’re reviewing it now and hope to update the blog soon.