Martha Zackin

Massachusetts Enacts New COVID-19 Emergency Paid Sick Leave Law

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A new Massachusetts law providing for COVID-19-related emergency paid sick leave (“EPSL”) was signed into law on May 28.  Effective until the earlier of September 30, 2021 or the exhaustion of $75 M in program funds, as determined by the Commonwealth, employers must offer Massachusetts employees leave time for the reasons set forth below.  Full-time employees are entitled to 40 hours of EPSL; part-time employees receive a pro-rated amount.  This new EPSL allotment is over and above the 40 hours available under the earned sick leave law, and is payable at a maximum rate of $850 per week. Read more →

Martha Zackin

News from the Massachusetts Department of Family and Medical Leave

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By Alexandra D. Thaler

As we approach the new year, the Massachusetts Department of Family and Medical Leave (DFML) is gearing up to begin administering leave requests for time off starting January 1, 2021 by preparing its online benefits application system (which may be piloted in December), updating employers on its responses to frequently asked questions, and issuing an updated workplace poster.  Accordingly, now is a good time for employers to review their PFML compliance.

Employers that obtained a private plan exemption for 2020 should be looking out for information on renewal for 2021, and should note the FAQ below regarding retroactive payments that would become due if they choose not to renew.

Employers that paid into the public system for 2020 should consider whether obtaining a private plan exemption may be a better option for next year.  Many more products have recently become available, some of which may make financial and operational sense for businesses with Massachusetts employees.  Employers planning to implement a private plan for the first time should be aware that they must obtain an exemption from the state, which must be approved before the start of a quarter to be effective for that quarter.  Information on applying for an exemption is available here.

Employers subject to both the PFML and the federal Family and Medical Leave Act (FMLA) should also review how they calculate the 12 month benefit eligibility period under the FMLA.  While the FMLA allows employers to choose among four different methods for the calculation, the PFML requires employers to measure the leave entitlement period over 52 weeks starting from the Sunday immediately preceding the first day that job-protected leave commences.  Employers that use a different method allowed by the FMLA—such as the 12-month rolling period measured backwards from the start of leave, which is the only one that avoids the potential for leave stacking—should consider changing it to maximize the amount of FMLA leave that can run concurrently with PFML time off.  This can be done with 60 days’ advance notice to employees, so long as employees receive the benefit of the most generous calculation during the notice period.  This is also a good time to review other related policies, such as absence notification and attendance requirements.

All employers are advised to post the updated workplace poster (translated versions available here) wherever other workplace postings are displayed.  Employers without a physical space for such posters should distribute them electronically or on the appropriate portion of the company’s intranet, and even employers with a physical poster area should consider electronic distribution or posting while so many employees remain away from their usual work spaces due to ongoing pandemic mitigation efforts.

Finally, while the DFML does not currently have a page dedicated to FAQ’s, its recent newsletter identified a number of questions and answers that may be of particular interest to employers:

  • Contributions:
    • What are the retroactive contribution requirements for an employer that has terminated a private plan exemption? An employer that terminates a private plan will be responsible to remit retroactive contributions back to the effective date of the initial exemption approval if it fails to renew its plan for a second term.  After the filing and approval of the renewal, an employer may terminate its private plan at the end of the second term without owing retroactive contributions.  Employers with an exemption which was initially approved prior to January 1, 2021, will need to go through one (1) renewal cycle to not owe retroactive contributions.
    • What are the retroactive contribution requirements for an employer that failed to maintain a private plan or had its approval withdrawn by the Department? The Department may assess a penalty of up to an amount equal to the employer’s total annual payroll for employees and covered contract workers each year or fraction thereof that it failed to maintain said plan, multiplied by the then-current annual contribution rate required under M.G.L. c. 175M, § 6(a). This amount may be subject to penalties under M.G.L. c. 62C and interest from the due date of the PFML return to the date the PFML contributions are paid at a rate prescribed by M.G.L. c. 62C, § 32.  The employer or covered business entity may also be required to repay to the Trust Fund the total amount of benefits paid to covered individuals who received benefits from the Trust Fund during the period of time that the employer failed to maintain its plan.
  •  Employer Provided Benefits and PFML:
    • Do private disability policies that are purchased separately by the employee, including through voluntary worksite benefits, cause the employee to have a reduction in DFML benefits?
    • Can an employee “top-off” PFML benefits by using accrued paid time off from their employer?
    • Can an employer with a private plan exemption allow their employees to supplement their private plan exemption benefit amount with accrued paid leave?

Employers can stay up to date with the DFML by signing up for the Department’s newsletter email list here.  Of course, we remain available to advise on any questions that may arise about the PFML, FMLA and other leave issues.

Martha Zackin

COVID-19 Challenges: More Q&As for Employers – Department of Labor Regulations on Paid Leaves under the FFCRA

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By Bello Welsh LLP

The Families First Coronavirus Response Act (FFCRA) requires employers with fewer than 500 employees[1] to provide (1) up to 80 hours of paid sick leave to any employee who is unable to work for any of six enumerated reasons, and (2) up to twelve weeks of leave (of which ten weeks are paid) to any employee who has been employed for at least 30 days, in order for the employee to care for a child whose school or daycare has closed or whose childcare provider is unavailable.[2]  Our prior client alert provides a detailed overview of the fundamental requirements of the Emergency Paid Sick Leave Act (EPSLA) and expanded FMLA (E-FMLA) leave entitlements.  In recent days, the United States Department of Labor (DOL) has issued regulations and expanded its Q&A’s to provide additional clarification regarding several aspects of how the leaves are to be administered.  Following up on our prior set of Q&As, this document addresses some of the questions that employers may be facing as they create processes and policies to comply with the new laws.

Question 24:      Are there constraints on the qualifying reasons for leave pursuant to the Emergency Paid Sick Leave Act and Emergency Family and Medical Leave Expansion Act? 

Answer 24:         Yes.  The DOL regulations provide detailed descriptions of the circumstances under which leave may be taken, which are important for employers to understand when evaluating leave requests.  For example, the regulations provide that an employee may take leave only if the employer has work for the employee, and the employee would be able to perform work (either at the normal workplace or by telework) but for the reason for leave.  Additional clarifications include the following:

Emergency Paid Sick Leave Act (EPSLA):  Paid sick leave may be taken for one of six qualifying reasons.

  1. The employee is subject to a government-issued “quarantine or isolation order” related to COVID-19. This includes quarantine, isolation, containment, shelter in place, or stay at home orders issued by any government authority that causes the employee to be unable to work, as well as a government advisory that categories of citizens, such as those of certain age ranges or with certain medical conditions, should shelter in place, stay at home, isolate, or quarantine.
  2. The employee has been advised by a health care provider to self-quarantine due to concerns related to COVID-19. This encompasses a health care provider’s advising an employee to self-quarantine not only because the provider believes the employee has or may have COVID-19, but also where the provider believes the employee is “particularly vulnerable” to COVID-19.
  3. The employee is experiencing symptoms of COVID-19 and seeking medical diagnosis from a health care provider. The relevant symptoms include fever, dry cough, shortness of breath, or any other COVID-19 symptoms identified by the U.S. Centers for Disease Control and Prevention.
  • Importantly, leave taken for this reason is limited to time the employee is unable to work because the employee is taking “affirmative steps” to obtain a medical diagnosis, such as making, waiting for, or attending an appointment for a test for COVID-19.  Thus, while an employee may not take paid sick leave to self-quarantine without seeking a medical diagnosis, the employee need not actually have received a diagnosis to be eligible for time off for this reason if, for example, the time is needed to try to get tested, or if the employee is continuing to experience symptoms while awaiting results and is unable to telework while the employer has work for the employee.  (In addition, if the employee exhibits COVID-19 symptoms, and seeks medical advice, but is told they do not meet the criteria for testing and is instead advised to self-quarantine, the employee may be eligible for leave under the second reason for EPSLA leave, described above, provided the employee meets all the requirements spelled out above.)
  1. The employee is caring for an individual who is subject to a government quarantine or isolation order related to COVID-19, or an individual who has been advised by a health care provider to self-quarantine due to concerns related to COVID-19. While the use of the term “individual” in the statute could be interpreted as effectively limitless, the regulations clarify that the term refers to an immediate family member, a person who regularly resides in the employee’s home, or a similar person with whom the employee has a relationship that creates an expectation that the employee would care for the person if he or she were quarantined or self-quarantined. The leave also is not available if the individual in fact does not depend on the care.
  2. The employee is caring for his or her son or daughter[3] whose school or place of care has been closed for a period of time, or the child care provider is unavailable, for reasons related to COVID-19. An employee may take leave for this purpose only if no other suitable person (such as a co-parent, co-guardian, or the usual child care provider) is available to care for the son or daughter during the period of such leave.
  • The definitions here are intentionally broad. For example, “place of care” includes not only daycares, but also before and after school care programs, summer camps, and respite care programs, among others, while a “child care provider” includes any individuals who provide childcare on a regular basis, whether paid or unpaid, licensed or unlicensed, including babysitters, extended family and neighbors. In addition, a school or place of care is considered “closed” if the physical location is closed, even if the school or place of care has moved to online or similar instruction models.
  • The regulations do not specify how an employer would determine whether another suitable person is “available,” but presumably employers may inquire and accept the employee’s response.  In an apparent discrepancy, the regulations relating to required documentation require that in seeking such leave, the employee must represent that no other suitable person “will be caring” for the child.  Employers may wish to include both phrases in any documents used by employees to request leave.
  • As we discussed in our initial client alert regarding these regulations, employees must provide certain specific information regarding the child and the school or care provider at issue.  While, as noted above, an employee may qualify for leave only if another suitable individual is not “available,” the employer is required to obtain and maintain a record of the employee’s representation that no other suitable individual “will be caring” for the child.  In addition, the IRS guidance on documentation required for the associated tax credit provides that, as to children over the age of 14 where time off is sought during daylight hours, the employee must provide a statement that special circumstances exist requiring the employee to provide care. The regulations do not provide guidance on how employers are to determine whether someone else is “available” or “caring” or what “special circumstances” may be or to what extent they must be described or verified.  At a minimum, it is recommended that these items be included in any paid sick leave request form.
  1. The employee has a “substantially similar condition,” as specified by the Secretary of Health and Human Services (HHS). To date, HHS has not identified any “substantially similar condition” that would allow an employee to take leave for this purpose.

Emergency Family and Medical Leave Expansion Act (E-FMLA)

As discussed in our prior client alert, the E-FMLA provides that an employee may use E-FMLA leave if the employee is unable to work or telework due to a need to care for the employee’s son or daughter whose school or place of care is closed, or child care provider is unavailable, due to COVID-19 related reasons.  The requirements for taking leave for this purpose are the same as the requirements for taking such leave pursuant to the EPSLA.

Question 25:      Can a small business seek a hardship exemption from the EPSLA and E-FMLA, and if so, what is the process for doing so?

Answer 25:         Yes, but the exemption is limited, and available only to employers with fewer than 50 employees, if providing leave to employees to care for a son or daughter whose school or place of care is closed or unavailable would jeopardize the viability of the business as a going concern.  There is no such exemption from the need to provide EPSLA leave for reasons 1-4 or 6 (described above).  To be eligible for this exemption, an authorized officer of the small business must have determined that one of the following conditions exists (and must document that determination and retain the documentation):

  • the leave would result in the small business’s financial obligations exceeding available business revenues and cause the business to cease operating at a minimal capacity;
  • the absence of the employee(s) requesting such 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 work of the employee(s) requesting leave, and such work is needed for the small business to operate at a minimal capacity.

Employers should carefully consider whether a leave request would in fact result in one of these narrow circumstances occurring. For example, a request by a junior level employee for intermittent E-FMLA one day per week is unlikely to preclude the business from operating at minimal capacity or create a substantial risk to its finances or operations, even in a relatively small business.  (See also our Q&A for Employers #22, discussing intermittent leave.)

Question 26:      How does an employer determine if it has fewer than 500 employees, for purposes of coverage under the EPSLA and E-FMLA?

Answer 26:         Employers must count all full-time and part-time employees employed within the U.S. (including the District of Columbia and all U.S. territories and possessions), measured at the time the employee would take leave. This includes all current employees regardless of tenure, employees on leave of any kind, employees of temporary placement agencies who are jointly employed by the employer and another employer, and day laborers supplied by a temporary placement agency.

Of note, an employer that implements a “furlough” under the FFCRA may still be obligated to count those employees for purposes of determining employer coverage if the terms of the job action make it more akin an unpaid leave than a to a layoff.  However, such furloughed employees would not be entitled to take EPSLA or E-FMLA leave for any time when no work is available to them (e.g. during the furlough).

A corporation is typically considered a single employer, and all of its employees within the U.S. should be counted together regardless of their location. Two or more entities are generally separate employers, unless they meet the joint employer test under the FLSA or the integrated employer test under the FMLA, in which case, the employees of all entities making up the joint or integrated employer must be counted.

Question 27:      The EPSLA and E-FMLA provisions of the FFCRA apply to employers with fewer than 500 employees.  What date is used for purposes of determining the 500-employee threshold?

Answer 27:         The temporary regulations provide that the 500-employee threshold is determined as of the date an employee needs to take leave.  Therefore, if an employer that currently has more than 500 employees goes below the 500-employee threshold while the FFCRA is in effect (through December 31, 2020), for example as a result of layoffs due to the COVID-19 pandemic, the employer will be subject to the FFCRA as of the date its headcount falls below 500.

For example, if an employer has 525 employees on April 30, 2020, and one of its employees is unable to work starting on that date because s/he has been advised by a health care provider to self-quarantine due to COVID-19 concerns, the employer will not be required to provide paid leave under the FFCRA to that employee.  If, however, the employer lays off 25 employees on May 1, 2020 and another 25 employees on June 30, 2020, the employer will be required to provide paid leave to another employee who is unable to work for the same reason starting on July 1, 2020.  Under current DOL guidance, an employer that drops below the 500-employee threshold would not be required to provide leave retroactively to an employee who did not qualify at the time leave would have started but whose leave, if available, would have been in effect on the date the employer begins to be subject to the FFCRA.  Conversely, an employee who qualifies for and goes out on leave is entitled to the full amount of leave even if the employer’s employee headcount goes above the threshold during the leave.

Question 28:      Do the usual FMLA job restoration regulations, including the exception for employers that are able to demonstrate that an employee would not otherwise have been employed at the time s/he requests reinstatement, apply to employees who take E-FMLA leave under the FFCRA?

Answer 28:         Yes.  Employers subject to the E-FMLA are also subject to the usual FMLA job restoration obligation, and therefore must restore any employee who has taken E-FMLA leave to the same or equivalent position at the end of the leave.  The temporary regulations track the existing FMLA regulations by providing that the FFCRA does not protect an employee from employment actions, such as layoffs, that would have affected the employee regardless of whether leave was taken.  The employer also has the same burden to show that an employee would not otherwise have been employed at the time reinstatement is requested in order to deny restoration to employment.

As to employers with fewer than 25 employees, the FFCRA includes an additional exception to the job restoration obligation, which appears to impose a greater obligation on small businesses.  As per the FFCRA, such small employers are excluded from the job restoration obligation if the position no longer exists when an employee seeks to return from E-FMLA leave because of an economic downturn or other conditions caused by a public health emergency (i.e., due to COVID-19 related reasons), although the employer must attempt to contact the employee if an equivalent position becomes available in the next year.

Question 29:      Do the 80 hours / 2 weeks of paid sick leave available under the EPSLA for caring for a child whose school or childcare is closed or unavailable due to COVID-19 cover the first 10 days of unpaid leave under the E-FMLA?

Answer 29:         Yes, if the employee has not previously used EPSL for other reasons, the first two weeks of E-FMLA may be paid as EPSL (up to 80 hours), regardless of whether this is more or less than 10 workdays for the employee in question.  Of note, however, the pay available through EPSL is capped at 80 hours, regardless of the employee’s regular hours of work in an average workweek, whereas the pay available through E-FMLA for the remaining 10 weeks does not have an hours cap.  Therefore, full-time employees who regularly work more than 80 hours in a two-week period will not recover pay for their full hours of work through EPSL, but their full hours of work must be taken into account when determining E-FMLA pay.

Question 30:      Can an employee take EPSLA or E-FMLA leave for periods of time that work is not available to that employee, for example if the employee’s hours have been reduced or if the employee’s place of work has temporarily closed due to COVID-19 related government orders?

Answer 30:         No.  EPSLA and E-FMLA leaves are only available when the employer has work for the employee, which the employee is unable to perform due to a qualifying reason.  For example, an employee whose hours of work were reduced by the employer from 5 days to 3 days per week because of a COVID-19 related business downturn may not take either EPSLA or E-FMLA leave to cover the 2 days the employee is no longer scheduled to work, and an employee whose workplace has closed (and who cannot work from home) also may not take EPSLA or E-FMLA leave for any reason.

Question 31:      If a new hire took EPSLA or E-FMLA leave with their prior employer, do they get the full amount of leave entitlement at my company? 

Answer 31:         No.  Each individual is only eligible for 2 weeks of EPSLA leave and 12 weeks of E-FMLA leave total between April 1, 2020 and December 31, 2020, regardless of where they are employed at the time they take leave.  This also suggests that the non-retaliation provisions apply regardless of whether the individual took leave at a prior employer.  Because employers may only receive tax credits for payments made pursuant to the FFCRA, employers should consider inquiring about prior EPSLA and E-FMLA leave use on any employee leave request form to avoid paying out leave for which the employer will not be reimbursed.

Question 32:      How do we calculate EPSL or E-FMLA pay to an employee who regularly works overtime?  What if the employee works some shifts for which the employee is paid a shift differential?

Answer 32:         For pay under both the EPSLA and E-FMLA, the employer must determine the employee’s “average regular rate.”  First, the “regular rate” is determined by taking the employee’s pay over a six-month period, excluding the amounts specified in Section 7(e) of the Fair Labor Standards Act, such as gifts, vacation or holiday pay, expense reimbursements, discretionary bonuses, and premium pay for overtime (that is, the additional 0.5x of pay).  Second, the “average regular rate” is determined by taking a weighted average based on the number of hours worked over the 6-month period (or, if the employee has not been employed for 6 months, then over the entire term of employment).  That rate is then used to calculate pay during leave covered by the EPSLA and the E-FMLA.

In the case of an employee who is paid based solely on a single hourly rate, the average regular rate for purposes of the EPSLA and E-FMLA is simply the employee’s usual hourly pay rate.  This is so regardless of whether the employee regularly works and is paid overtime because overtime premiums are not included in the calculation of the average regular rate.

In the case of an hourly employee who is sometimes paid a shift differential, the average regular rate must include not just the usual hourly rate, but also the shift differential.  Accordingly, the regular rate is determined by taking the employee’s total pay (including shift differentials paid but not including the premium portion of overtime pay or other excluded amounts) and dividing this by the total hours of work (including overtime hours).  This results in a (weighted) average regular rate, and it is this rate that is used to calculate pay during paid time off, rather than, for example, the rate that would apply to the hours or shift for which the employee takes leave.

[1] In addition, public employers are subject to the FFCRA regardless of size, as follows: the sick leave provisions apply to the federal government, federal agencies, and state and local governments, while the extended family leave provisions apply to non-federal public agencies, and federal employees covered by Title I or Title II of the FMLA.

[2] An employer of a health care provider or emergency responder may elect to exclude such employee from these leave provisions.

[3] The term “son or daughter” includes the employee’s own biological, adopted, or foster child, stepchild, legal ward, or child for whom the employee is standing in loco parentis (i.e., someone with day-to-day responsibilities to care for and financially support the child), under the age of 18. The term also includes an adult son or daughter who is incapable of self-care because of a mental or physical disability.

 

Martha Zackin

FFCRA: Intersection of Emergency Paid Sick Leave, Paid E- FMLA, and FMLA Leave

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By Bello Welsh LLP

As described in detail in our prior Alert, the federal government signed into law the Families First Coronavirus Response Act (FFCRA) to help workers impacted by the current COVID-19 health emergency.  Under the FFCRA, employees of businesses of fewer than 500 employees may be eligible for paid sick leave or paid family leave under certain COVID-19-related circumstances.

There are two types of paid leave available under the FFCRA—emergency paid sick leave and emergency paid family and medical leave (“E-FMLA”).   Click on the links for a summary of the Department of Labor’s guidance and for Q&A.

Emergency Paid Sick Leave Act (“EPSLA”)

EPSLA leave is available to all employees, regardless of tenure. Employees are eligible for this leave if they meet one of the following conditions:

  1. They are subject to a federal, state or local quarantine or isolation order related to COVID-19;
  2. They have been advised by a health care provider to self-quarantine due to concerns related to COVID-19;
  3. They are experiencing symptoms of COVID-19 and are seeking a medical diagnosis;
  4. They are caring for an individual[1] who is subject to a quarantine or isolation order or has been advised by a health care provider to self-quarantine;
  5. They are caring for a child because the child’s school or place of care is closed or the child’s care provider is unavailable due to a public health emergency; or
  6. They are 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. No such specifications have yet been published.

If there is work available for an employee, but that employee cannot work (either in the office or remotely), that employee is entitled to EPSLA.  Importantly, an employee’s entitlement to and use of paid sick leave may not be used to reduce or eliminate any other right or benefit to which the employee is entitled under any law, collective bargaining agreement, or employer policy that existed prior to April 1, 2020 (the effective date of the FFCRA).  In other words, EPSLA cannot count against an employee’s balance or accrual of any other source or type of leave.  Moreover, employers and eligible employees may agree (where Federal or state law permits) to have paid leave supplement EPSLA pay so that the employee receives up to the full amount of his or her normal pay.  EPSLA leave also cannot be used retroactively – the law does not establish any right or entitlement to be paid for any unpaid or partially paid leave taken before April 1, 2020, even if that leave was taken for one of the six qualifying reasons listed above.

Emergency Family and Medical Leave Expansion Act (“E-FMLA”)

This leave is available to all employees who have been employed for at least 30 calendar days (including, in certain instances, rehired employees).  An employee is eligible for up to twelve weeks of E-FMLA leave if he or she is unable to work (either at the employer site or remotely) in order to care for a child[2] because the child’s school or place of care is closed or because their child’s childcare provider is unavailable due to the public health emergency (reason #5, above).

E-FMLA benefits run concurrently with EPSLA leave.  This means that if an employee takes two weeks of EPSLA leave to care for a child (under reason #5), the employee would be eligible to take an additional ten weeks of paid E-FMLA leave.  If, on the other hand, the employee took EPSLA leave for one of the other qualifying reasons, he or she would still be eligible for up to twelve weeks of E-FMLA leave; however, the first two weeks of the E-FMLA leave would be unpaid, unless the employee had accrued paid leave that could be used during that period.  If accrued leave was available, the employer and employee may agree to allow the employee to use accrued paid leave during that two-week period.

Thereafter, for the remaining period of E-FMLA leave, the employee may choose, and the employer may require, that accrued leave be used concurrently with E-FMLA leave.  In that instance, the employee must be paid the full amount to which he or she is entitled under existing paid leave laws or policies for the period of leave taken, up to 100% of regular pay (and the employer may claim the tax credit available under the FFCRA, even if the paid time off comes from the employee’s accrued leave bank).  If accrued leave is exhausted before the end of the E-FMLA benefits period, the employer must pay at least the required E-FMLA amount (which is capped at $200 per day).

Importantly, employees are only entitled to a total of twelve weeks of FMLA leave per the employer’s FMLA year, including E-FMLA, so if an employee has already taken some or all of his or her FMLA leave, their available E-FMLA leave will be reduced by the amount taken.  An employee is still eligible for the two weeks of paid sick leave, however, even if he or she has taken all twelve weeks of FMLA leave.

E-FMLA benefits will end on the earlier of the date on which the public health emergency ends or the employee receives full benefits under these laws.

[1] Of note, while the covered individuals are not limited to family members, the preamble to the DOL regulations states that “paid sick leave may not be taken to care for someone with whom the employee has no personal relationship.  Rather, the individual being cared for must be an immediate family member, roommate, or a similar person with whom the employee has a relationship that creates an expectation that the employee would care for the person if he or she self-quarantined or was quarantined.”

[2] While the E-FMLA statutory text specifies that the child must be under 18 years of age, the EPSLA does not have this limitation, and both laws refer to the definition of “son or daughter” under the FMLA, which includes not only children under 18, but those over 18 who are incapable of self-care because of a mental or physical disability.  The DOL has decided to interpret the E-FMLA and the EPSLA consistently with the FMLA.

Martha Zackin

COVID-19 Challenges: A Q&A for Employers [UPDATED]

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By Bello Welsh LLP

Organizations are facing unprecedented challenges as the result of COVID-19.  The virus’s impact on the workplace is significant and implicates a host of issues under employment law.  Additionally, on March 18, 2020, the federal government passed a new law, the Families First Coronavirus Response Act (FFCRA), that imposes new obligations on employers.

Bello Welsh has previously published the following resources: Key Considerations for Employers Amid the COVID-19 Pandemic and Families First Coronavirus Response Act Signed into Law (FFCRA Summary), which provides a summary of the relevant provisions of the FFCRA.  This Q&A document is intended to supplement those resources and answer additional questions that may arise.  This document has been updated to reflect changes to the FFCRA enacted by the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) as well some portions of the interpretive guidance issued by the Department of Labor, including its Families First Coronavirus Response Act: Questions and Answers (DOL Q&A), which itself continues to be updated frequently.  We note that the guidance published as of March 29, 2020 may not have incorporated amendments implemented through the CARES Act.

 Question 1:  We may be forced to furlough, temporarily lay off, or permanently terminate employees as the result of economic conditions caused by COVID-19. Are we required to give advance notice or severance pay for terminations, or to pay employees on furlough or temporary layoff?

Answer 1:  Generally, no, with a few caveats.  First, if the action is a layoff or plant closing covered by the federal WARN Act or similar state or local law, advance notice (and in New Jersey severance) may be required. (See Question 9 below.)  Second, if your workforce is unionized, the applicable collective bargaining agreements may impose contractual obligations. (See Question 11 below.) Third, employment agreements with executives and other employees may contain notice or severance requirements, particularly in connection with permanent terminations.

[New:]  While severance and ongoing wage or benefit payment may not be required, many states require payment of final pay, including accrued unused vacation, at or shortly after the time of an employer-initiated termination.  A “temporary layoff” or even a “furlough” may be considered a termination requiring such payout.  (See Question 20 below.)  Accordingly, employers are advised to carefully weigh the risks of deciding not to pay final pay at the time of a furlough or temporary layoff, and to consider alternatives to mitigate risk.

Question 2:  The FFCRA gives employees new sick pay and paid leave entitlements. Who pays for these, employers or the government?

Answer 2 [Updated]:  Employers must “front” the money by paying employees directly, but the amounts will be subsidized by the government in the form of a tax credit or reimbursement, specifically a credit against quarterly payroll tax payments (including withheld federal income taxes, the employee share of Social Security and Medicare taxes, and the employer share of Social Security and Medicare taxes with respect to all employees).  If the payroll tax payments are not large enough to cover the credit, employers will be issued a refund.  See our alert, FFCRA Summary, the DOL Q&A (nos. 15, 32-34), and this news release relating to expected joint IRS/Treasury/DOL Regulations  for details.

Question 3:  The FFCRA expands the reasons why employees can take leave under the Family and Medical Leave Act (FMLA). Do we need to worry about this if our organization is too small to be covered by the FMLA or if the employee doesn’t meet typical FMLA eligibility requirements?

Answer 3:  Yes.  The FFCRA has greatly expanded the scope of employers and employees covered by the new leave requirement.  Note, however, that large employers with 500 or more employees are not covered by the public health emergency leave or sick pay requirements of the FFCRA.  See our alert, FFCRA Summary, and the DOL Q&A (nos. 2-3), for details.

Question 4:  Do we have to affirmatively notify employees of the new public health emergency leave and sick pay requirements of the FFCRA?

Answer 4 [Updated]:  Yes. The FFCRA requires employers to post notice of the new leave requirements in a conspicuous location in the workplace where notices are customarily posted.  The DOL has now published model posters[1] (in English and Spanish) for this purpose.[2]  (Although the original text of the FFCRA only required notice to be posted for the new sick leave, and not the new public health emergency leave under the FMLA (E-FMLA), the DOL poster includes information on both.)  Since many offices are closed and many employees are working from home, employers may email the notice to employees and post it on the organization’s intranet, if one exists, in addition to physical posting, or may directly mail the notice to employees. See the DOL Posting Q&A for additional details on the posting requirement.

Question 5:  We already provide paid sick time to employees under company policy and state and local laws. Do we have to provide additional sick time under the FFCRA?

Answer 5:  Yes.  The new emergency paid sick time obligation is in addition to any paid sick time or other paid time off provided under employer policy, collective bargaining agreement, or other federal, state, or local law.

Question 6:  Are employees who are on temporary layoff or furlough eligible to receive public health emergency leave pay (E-FMLA) or sick pay, assuming they otherwise meet the eligibility requirements?

Answer 6 [Updated]:  No, the new paid leave/sick time is not required for employees who were put on temporary layoff or furlough before requesting any emergency leave or sick time.   The new leave and pay entitlements are intended to protect those employees who are unable to work when an employer needs them, not employees on layoff.  See the DOL Q&A (nos. 26-28), for details.

Question 7:  We were considering a reduction-in-force to deal with economic conditions, and now we are especially concerned with the cash flow issues the new paid public health emergency leave and paid sick leave may cause for our organization. Would it violate the law for us to have a reduction-in-force earlier to avoid potential paid leave/sick time obligations under the FFCRA?

Answer 7:  It is not clear whether the non-retaliation and related provisions in the FMLA and FFCRA would be construed to prohibit a layoff motivated by a variety of economic reasons, one of which may be the specter of potential cash flow problems caused by new FFCRA obligations.  As such, it is risky to rely on the avoidance of FFCRA obligations as a reason for having or accelerating layoffs.  Organizations also should not select specific individuals for layoff based on the likelihood that they will utilize the new paid public health emergency leave or paid sick time as doing so could violate anti-discrimination laws in addition to the FFCRA and FMLA.

 Question 8:  If we conduct a reduction-in-force for economic reasons, are we allowed to include those employees who are on public health emergency leave under the FMLA/FFCRA, or are they guaranteed reinstatement to their jobs?

Answer 8 [Updated]:  The answer is not clear.  Under existing FMLA regulations, if an employer can show that “an employee would not otherwise have been employed at the time reinstatement is requested” as the result of a reduction-in-force, then there is no reinstatement obligation.  See 29 C.F.R. §825.216(a).  However, the FFCRA contains an explicit exemption from reinstatement for small employers (with fewer than 25 employees) if the job no longer exists due to changed economic or other operating conditions that are caused by a public health emergency and impact employment, and certain other conditions are met.  While this explicit exception for small employers could be read to mean that no such exception is available for larger employers, which would contradict existing FMLA regulations, the DOL’s guidance attempts to reconcile this apparent contradiction by stating that the conditions available for employers under 25 are in addition to existing FMLA standards.  See the DOL Q&A (no. 43), for details.   Regardless, it is advisable to consult with legal counsel if this situation arises.

As under the existing FMLA, it is clear that an individual may not be selected for termination, in whole or part, because the individual used or requested public health emergency leave or paid sick time under the FFCRA.  Also, it should be noted that employees may not be subject to discrimination or retaliation if they filed any type of complaint or proceeding relating to the new laws, or have testified or intend to testify in any such proceeding.   That does not mean that such individuals cannot be terminated, but it instructs that employment actions taken with respect to such individuals should be based on business purposes which in turn should be clearly documented.

[New:] Note that the DOL has now made clear that if a workplace is closed, either for economic reasons or because of business shut-downs ordered by state or local governments, the employer only needs to pay for the amount of sick/E-FMLA time taken by eligible employees before the closure.  See the DOL Q&A (no. 25; see also nos. 23-24, 27), for details.  In addition, the DOL has provided guidance on how to calculate the amount of sick/E-FMLA pay that is available to employees when the employer implements schedule reductions.  See the DOL Q&A (no. 28), for details.

Question 9:  How do I know if the federal WARN Act or similar state laws apply to our anticipated layoff or reduction-in-force?

Answer 9:  The WARN Act is a very complicated statute, and legal counsel should be consulted if there is a possibility the law may be implicated.  The WARN Act applies to employers with 100 or more employees (excluding some part-time and recently-hired employees) or who have 100 or more employees (including all part-time and recently-hired employees) who work at least 4,000 hours per week, exclusive of overtime.[3]   In general, if your organization is anticipating a temporary layoff, reduction-in-force, reduction in hours, or closing of a particular facility or operation that impacts the employment of 50 or more individuals, a more detailed WARN Act analysis is advised.

Massachusetts does not have a state analogue to the federal WARN Act.  However, various other states, including but not limited to California, Illinois, New Jersey, and New York, have statutes similar to the federal WARN Act, and many apply to smaller employers and personnel actions impacting smaller numbers of employees.

Question 10:  Does the WARN Act allow any flexibility in situations like this, where economic conditions are changing rapidly and unpredictably?

Answer 10:  Yes.  The federal WARN Act contemplates situations where the need for layoff was unforeseeable and it is hard to predict how long layoffs or reductions in hours may last.  Even in such situations, however, WARN imposes very specific obligations on employers, and there are significant consequences for non-compliance.   If it is possible that the WARN Act may apply to your employment action, legal counsel can help guide you through the WARN Act’s requirements and assist you in taking advantage of any flexibility available under the law.  Note that state law requirements may differ from those in the federal WARN Act.

Question 11:  Part of my organization’s workforce is unionized. Do we have special obligations with respect to any anticipated layoffs, closures, or reductions in hours?

Answer 11:  Yes.  You must review your collective bargaining agreement for specific provisions regarding seniority, layoff, recall, notice provisions and possibly other matters.  Unions are sending out letters to employers reflecting that they expect employers to follow these provisions regardless of the crisis.  There may also be an obligation to bargain about the impacts of layoffs.  Experienced labor counsel can assist with reviewing relevant collective bargaining agreements and obligations before taking action.

Question 12:  We are worried that some of our employees, specifically older individuals and those who have shared they have certain underlying health conditions, may be especially vulnerable to COVID-19, and we would like to help prevent them from being exposed. Can we offer these employees the opportunity to work from home without allowing other employees in similar positions to do so?

Answer 12:  The best practice in this circumstance is to invite employees with particular concern about COVID-19 due to risk factors to raise the issue and to deal with concerns raised by employees on a case-by-case basis.  However, if you wish to affirmatively reach out to employees in high-risk categories, be sure not to compromise the privacy of an employee’s medical information or make assumptions about an employee’s medical status beyond what the employee has disclosed to you.  There is always the possibility, though, that the employees you affirmatively reach out to and/or those who may be in high-risk categories that you do not allow to work from home might contend that your actions were based on improper consideration of protected characteristics, such as age, disability or pregnancy.

For those employees who are required to work on-site, employers should take the steps recommended by federal, state, and local public health authorities to reduce transmission of COVID-19.

Question 13:  Our organization generally does not allow certain employees to work from home, even as an accommodation of a disability, because we have determined that being in the office/worksite is an essential function of certain jobs. If we allow employees to work from home as the result of the public health emergency, are we compromising our ability to argue later that being at work is essential?

Answer 13:         Do not let the impact on future disability accommodations drive your decisions about allowing work from home during the public health crisis.  However, if you are concerned about future impact, be clear in all communications to employees that working from home is being allowed due to the extraordinary public health emergency even though many important aspects of people’s jobs cannot be performed remotely.

Question 14:  Can we check the temperatures of all employees before allowing them to come in to work? 

Answer 14:  Yes.  Now that COVID-19 has been declared a pandemic, guidance from the Equal Employment Opportunity Commission (EEOC) allows temperature checks for all employees.  However, there are numerous practical considerations that should be resolved before undertaking this measure, including whether there is an employee who is trained to do the checks, has reliable equipment and can be safe in doing so; whether employee privacy can be protected in the case of a positive result; and whether a contingency plan exists to deal with excluded employees.  It is also possible that state laws may diverge from the EEOC guidance, though that seems unlikely under the circumstances.

Question 15:  Can I and should I tell other employees if we learn that someone with COVID-19 symptoms or a positive test was present at work, and should I exclude those other employees from the workplace for 14 days? 

Answer 15:         Many employers are choosing to notify “Tier 1” (direct) contacts of an employee who has tested positive for COVID-19 or was in close contact with someone who tested positive, and we believe that approach is permissible and potentially could be viewed as required under the Occupational Health and Safety Act (OSHA) in some circumstances.  Given the current lack of availability of testing, making such notifications where the employee has symptoms but has not had a test may also be prudent.  However, going further to second-level contacts (those in contact with Tier 1 employees) may not make sense absent additional information indicating risk of exposure.  In making the notifications, employers should be careful to protect the privacy of the affected employee to the extent practical and must avoid seeking disability-related information from employees being notified.  Temporary exclusion of employees who have tested positive or who have symptoms consistent with COVID-19 infection is both permissible and prudent.  Employers should always follow the guidance of federal, state, and local public health authorities with respect to notifications.

Question 16:  Can I require all employees returning from travel or other leave to fill out a questionnaire confirming that they are not a risk to the workforce? 

Answer 16:   Maybe, depending on the questions asked.  Generalized questions that do not elicit disability-related or other confidential information are permissible.  These could include asking the employee to confirm such things as that s/he is free of fever or other known COVID-19 symptoms, has not been in contact with a positive or presumed positive individual, and is not under an order or recommendation of quarantine.

Question 17:  If an employee develops COVID-19, am I required to record the illness or report it to the Occupational Safety and Health Administration (OSHA)? 

Answer 17:  Maybe.  Generally, an illness is recordable if the illness is contracted as a result of the employee performing their work-related duties, and if it requires medical treatment beyond first aid or days away from work.  Although common colds and the flu are excluded from the obligation to record work-related illness, COVID-19 is not excluded.  Accordingly, a confirmed case of COVID-19 is a recordable illness if a worker is infected as a result of performing their work-related duties, provided it requires medical treatment or days away from work (which is likely, unless the employee is asymptomatic and already working remotely).  Moreover, if an employee who contracts COVID-19 at work later requires in-patient hospitalization, you must report the in-patient hospitalization to OSHA.

Of course, it may be difficult or impossible to know whether an employee’s infection actually resulted from their performance of work-related duties.  That said, best practice would be to assume that if an employee develops COVID-19 after having had known contact with another employee who has a confirmed case of COVID-19, the incident should be recorded or reported, as applicable.

Question 18:  Our organization is covered by the FFCRA. We have reduced a number of employees to part-time in response to the current situation, with some working only one day per week.  Will those employees still be eligible for the paid public health emergency FMLA leave and paid sick time under the FFCRA, and if so, how much?

Answer 18 [Updated]:  Yes, based on their scheduled hours.  There is no minimum hours threshold to receive paid public health emergency FMLA leave or paid sick time under the FFCRA.  The amount of paid sick time granted to part-time employees (defined as those working less than 40 hours per week) is not the full 80 hours, but rather the average number of hours the employee works over a two-week period.  For public health emergency FMLA leave, pay is pro-rated based on the number of hours the employee would otherwise be regularly scheduled to work.  If an employer has implemented a schedule reduction, and an affected employee is unable to work the new schedule due to sick time or E-FMLA qualifying reasons, they must be given leave based on the new schedule – the paid time off may not be used for the hours the employee is no longer scheduled to work.  See the DOL Q&A (no. 28), for details.

If an employee does not have a regular schedule, the amount of E-FMLA leave pay is calculated based on the average number of daily hours over the six months preceding leave (or, for newer employees, the reasonable expectation of the employee at the time of hiring of the average number of hours that the employee would be normally scheduled to work).

Note that employees must have been employed for at least 30 days to be eligible for the E-FMLA.  The CARES Act has amended the FFCRA to allow for coverage of employees who were terminated on or after March 1, 2020 and are reinstated if they worked 30 out of the 60 calendar days before the layoff. CARES Act § 3605.

Question 19:  We have employees currently on furlough. If an employee is called in to work for a few days during the furlough period, does the employee become eligible to receive E-FMLA leave and paid sick time under the FFCRA?

Answer 19 [Updated]:  Yes.  However, the amount of pay would be pro-rated as described in Question 18.

Question 20:  We are temporarily laying off employees. We don’t know how long the layoff will last, but we expect the employees will come back to work in the future.  Do we need to pay out employees’ accrued, unused vacation at the start of the layoff?

Answer 20 [Updated]:  State laws regarding the payout of accrued vacation vary, so be sure to check the law in all states where you are conducting temporary layoffs.

In Massachusetts, accrued vacation is considered a wage, and state law requires that “any employee discharged from . . . employment shall be paid in full on the day of his discharge.”  M.G.L. c. 149, § 148.  While this language could support the position that accrued vacation need not be paid in connection with a temporary layoff, as opposed to a permanent termination, the Massachusetts Attorney General’s Office very recently released COVID-19-related guidance to the contrary.  This guidance states that “when an employee is temporarily laid off, they have a right to be paid all of their earned wages, including all accrued vacation pay, on that same day.”  The Attorney General’s Office has indicated it will not take enforcement action for untimely payment of vacation pay if an employee being temporarily laid off voluntarily agrees to save accrued vacation for later use.  However, the Attorney General’s Office notes that it does not have control of private litigation, and employees who agree to defer vacation payment now would technically still have the legal right to sue later.

Based on the Attorney General’s Office guidance, the conservative approach is to either pay employees accrued, unused vacation upon layoff (including temporary layoff) or allow the individual to voluntarily defer the payout, especially since Massachusetts wage laws provide automatic triple damages and attorneys’ fees for violations.

Question 21:  Can employees use paid sick time under the FFCRA if we cannot provide them any work hours due to a government-ordered closure of non-essential businesses or a “stay-at-home” order?

Answer 21:  The answer is not clear.  Paid sick time under the FFCRA may be used if “[t]he employee is subject to a Federal, State, or local quarantine or isolation order related to COVID-19.”  The term “isolation order” could be read broadly to refer to stay-at-home orders and government-ordered business closures, or narrowly to refer to an isolation order specific to a particular individual, for example related to that individual’s actual or potential exposure to the virus.  We will monitor for guidance on this point.

Question 22:  Can our organization continue to provide medical and dental insurance to employees who are on furlough or temporary layoff?

Answer 22:   Yes, as long as you follow the requirements of your insurance plans or the provisions of COBRA, as explained below.  As a first step, you should check your insurance plans, as most contain a requirement that employees work a minimum number of weekly hours to be eligible for coverage.  Insurance plans may also limit coverage for individuals who have been laid off, even temporarily.  If your furloughed or laid off employees do not meet the technical eligibility requirements of the plans, you can request an exception from your insurer to maintain active coverage.  We understand that insurers are being flexible in granting exceptions to eligibility requirements due to the unusual circumstances caused by the pandemic.

If your insurer does not allow you to maintain regular coverage for furloughed or laid off employees, then the COBRA law provides an alternative method to continue such coverage.  COBRA notices should be issued to each affected individual, who will need to elect COBRA to continue coverage.  Employees are typically permitted to elect COBRA for up to 18 months, far longer than expected layoffs.  While individuals generally pay the full premium for COBRA coverage, employers may choose to pay some or all of the premium instead.  If you do so, be sure to clearly communicate to employees any time limits or other restrictions on the premium payments the organization is willing to provide.

Note that small employers not covered by COBRA may be subject to state laws concerning continuation of health coverage, such as the Massachusetts mini-COBRA law.

Question 22:  [New] Can employees take either sick leave or E-FMLA intermittently?

Answer 23:   In some situations, yes.  Specifically, current DOL guidance distinguishes between (1) sick time taken for reasons other than to care for a child whose school or childcare has closed or is unavailable for COVID-19 reasons and (2) either sick time or E-FMLA taken to care for a child whose school or childcare has closed or is unavailable for COVID-19 reasons.  The former must be taken in full-day increments and continuously while the need exists, unless the employee is teleworking, in which case the time may be taken intermittently if agreed to by the employer, in any agreed increment.  The latter may be taken intermittently if agreed to by the employer regardless of whether the employee is working at his or her regular place of employment or teleworking, again in any increment agreed by the parties.  Finally, any sick time or E-FMLA that is not exhausted may be taken at a future time before December 31, 2020 (but additional paid leave is not available if an employee exhausts their leave and later experiences a new situation which otherwise would have been eligible for leave).  See the DOL Q&A (nos. 21-22), for details.

[1] These links are for the private employer posters; federal employer posters are also available at the DOL’s COVID-19 site.

[2] We note that it appears the posters are still being updated, so employers may wish to check the linked page for the most updated version immediately before posting.

[3] The WARN Act does not identify a single point in time at which employer size is to be measured in all circumstances.  If your organization is near the threshold size or has exceeded it in the recent past, it is advisable to do a deeper dive on whether the law may apply.

Martha Zackin

COVID-19: Families First Coronavirus Response Act Signed Into Law [UPDATED]

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On March 18, 2020, President Trump signed the Families First Coronavirus Response Act (the “Act”), which aims to address the impact of the COVID-19 pandemic by, among other things, providing a limited period of paid sick leave for employees affected by COVID-19 and expanding the Family and Medical Leave Act (“FMLA”) for a public health emergency.  The paid sick leave and Emergency FMLA expansion (“E-FMLA”) provisions of this new law apply to employers with fewer than 500 employees.  For employers with more than 500 employees, the new law does not impact or change existing legal obligations under the FMLA or other federal employment laws, which remain as is.

Employers will be required to “front” the money for the leave required by the Act by paying employees directly, but the amounts will be subsidized by the federal government in the form of a tax credit or reimbursement.  The Act will become effective on April 1, 2020, and will remain in effect until December 31, 2020.  This alert summarizes the key provisions of the Act for employers.  A summary in chart form, prepared by the House Ways and Means Committee, can be found here.  This document has been updated to reflect changes to the FFCRA enacted by the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) as well some portions of the interpretive guidance issued by the Department of Labor, including its Families First Coronavirus Response Act: Questions and Answers (DOL Q&A), which itself continues to be updated frequently.  We note that the guidance published as of March 29, 2020 may not have incorporated amendments implemented through the CARES Act.

PAID SICK LEAVE [updated]

The Act requires private employers with fewer than 500 employees to provide paid sick time to any employee, regardless of tenure, who is unable to work for any of the following reasons:

  • The employee is subject to a federal, state or local quarantine or isolation order related to COVID-19;
  • The employee has been advised by a health care provider to self-quarantine due to concerns related to COVID-19;
  • The employee is experiencing symptoms of COVID-19 and is seeking a medical diagnosis;
  • The employee is caring for an individual who is subject to a quarantine or isolation order or has been advised by a health care provider to self-quarantine (note that this is not limited to just family members);
  • The employee is caring for a child because the child’s school or place of care is closed or the child’s care provider is unavailable due to a public health emergency; or
  • The employee is 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.

However, employers of healthcare providers or emergency responders may elect not to provide paid sick leave to those employees.  In addition, the Secretary of Labor has the authority to exempt businesses with fewer than 50 employees from providing leave for reason 5 if the required leave would jeopardize the viability of the business.  Small business may claim this exemption “if an authorized officer of the business has determined that:” (1) providing the paid leave “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;” (2) the absence of the employee(s) requesting paid leave “would entail a substantial risk to the financial health or operational capabilities of the small business because of their specialized skills, knowledge of the business, or responsibilities;” or (3) “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 or employees requesting paid … leave, and these labor or services are needed for the small business to operate at a minimal capacity.”  The DOL will provide information on how this will be implemented; for now, employers seeking to use this exemption are advised to record the reasons why they qualify.  See the DOL Q&A (nos. 4, 58-59), for details.

Duration of Leave [updated]

Full-time employees may take up to 80 hours of paid sick time, while part-time employees (defined by the DOL guidance as those normally scheduled to work fewer than 40 hours per week) are entitled to the average number of hours worked over a two-week period.  Part-time employees who work variable hours must be paid based on the number of hours they worked over the preceding six-month period or, if an employee has been employed less than six months prior to taking leave, based on the employee’s reasonable expectation at the time of hire.  This paid sick time may not be carried over from year to year, the employer is not required to provide further sick leave under the Act once the employee returns to work if all the available leave has been used, and unused time need not be paid out at termination.  An employer also cannot require an employee to find a replacement before taking paid sick time.  The paid sick time to which employees are entitled under the Act is in addition to all other sick time or PTO provided to employees under the employer’s policy or other applicable laws (such as the Massachusetts paid sick time law).  Paid sick time for reasons 1-4 and 6 may only be taken intermittently if the employee teleworks and the employer agrees; paid sick time for reason 5 may be taken intermittently regardless of whether the employee works on site or teleworks, but again employer agreement is required.  In addition, the paid sick time is available only for time the employee is otherwise scheduled to work.  See our alert, COVID-19 Challenges: A Q&A For Employers (nos. 18 and 23) and the DOL Q&A (nos. 28, 20-22, 49), for details.

Rate of Pay

Employees who take leave for self-care (reasons 1-3 above) must be compensated at the higher of (1) the employee’s regular rate of pay, (2) the federal minimum wage, or (3) the local minimum wage.  Employees who take leave to care for others or for a substantially similar condition (reasons 4-6 above) must be compensated at two-thirds of their regular rate of pay.

However, the paid sick leave amounts are capped at $511 per day for 10 days ($5,110 total) for employees who take leave for self-care, and at $200 per day for 10 days ($2,000 total) for employees who take leave to care for others or for a substantially similar condition.

Employer Tax Credits [updated]

The Act provides for certain tax credits to ease the financial burden on employers.  Employers are entitled to a refundable tax credit equal to 100% of the paid sick leave wages paid to employees in each calendar quarter in accordance with the Act (up to the caps described above).  The amount of the credit is increased by the amount of nontaxable group health plan expenses paid by the employer that are properly allocable to the qualified sick leave for which the credit is allowed.  The tax credit is allowed against payroll tax payments (including withheld federal income taxes, the employee share of Social Security and Medicare taxes, and the employer share of Social Security and Medicare taxes with respect to all employees).  If the payments are not large enough to cover the credit, employers will be issued a refund.

Notice [updated]

Employers must post model posters[1] (in English and Spanish) concerning the paid sick leave provisions of the Act.[2]

Non-Compliance/Anti-Retaliation [updated]

Employers are prohibited from discriminating against an employee who takes paid sick leave under the Act or has filed any complaint, instituted or caused to be instituted any proceeding under the Act, or has testified or is about to testify in any such proceeding.  Employers that terminate an employee for such discriminatory reasons, or who fail to provide paid sick time under the Act, will be considered in violation of the Fair Labor Standards Act and will be subject to its penalties, including payment of back pay, liquidated damages and attorneys’ fees.

EMERGENCY FMLA EXPANSION [updated]

The Act also substantially expands FMLA leave (“Emergency FMLA” or “E-FMLA”).  The Act provides for up to 12 weeks of Emergency FMLA leave to any eligible employee who is unable to work (or telework) in order to care for a child who is under 18 because the child’s school or place of care is closed or the child’s childcare provider is unavailable due to the public health emergency.  Leave may be taken intermittently regardless of whether the employee works on site or teleworks, but only with employer agreement.  All employers with fewer than 500 employees are required to provide E-FMLA leave.  However, the Secretary of Labor has the authority to exempt employers of healthcare providers and emergency responders, and to exempt businesses with fewer than 50 employees if the required leave would jeopardize the viability of the business.  The criteria for exemption for small businesses are the same as described for sick leave taken for reason 5.  See the DOL Q&A (nos. 4, 58-59), for details.

Eligible Employees [updated]

Any employee is eligible for E-FMLA leave if the employee has worked for the employer for at least 30 days prior to taking leave; employees who were terminated after March 1, 2020 and rehired qualify if they worked 30 of the last 60 calendar days prior to the layoff.

Rate of Pay [updated]

The first 10 days of E-FMLA leave may be unpaid.  During the unpaid period, an employee may elect (and an employer may require an employee) to substitute any accrued vacation, personal, or medical or sick leave for unpaid leave.  Employees could also elect to use paid sick time under the Act to cover the first 10 days.  After the 10-day period, the employer 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.  Employees who work variable schedules must be paid based on the number of hours they worked over the preceding six-month period or, if an employee has been employed less than six months prior to taking leave, based on the employee’s reasonable expectation at the time of hire.  The Act limits paid FMLA leave to $200 per day and $10,000 total per employee (equivalent to 10 weeks of E-FMLA payments).

Employer Tax Credits [updated]

As with paid sick leave, employers may claim a refundable tax credit equal to 100% of the payments made to employees for E-FMLA leave in each calendar quarter, up to the caps described above.  Similarly, the amount of the credit is increased by the amount of nontaxable group health plan expenses paid by the employer that are properly allocable to the qualified E-FMLA leave for which the credit is allowed.  These tax credits are allowed against payroll tax payments (including withheld federal income taxes, the employee share of Social Security and Medicare taxes, and the employer share of Social Security and Medicare taxes with respect to all employees), and employers will receive a refund if the payments are not large enough to cover the credit.  However, employers are not allowed to take the credit with respect to any wages for which the general business credit for FMLA leave is allowed.

Job Restoration [updated]

Employers are subject to the standard FMLA obligation to return any employee who has taken leave to the same or equivalent position upon return to work.  The only changes under Act are: (1) employers with fewer than 25 employees are excluded from the requirement to return the employee to the same or an equivalent position if the position no longer exists when an employee seeks to return from Emergency FMLA leave because of an economic downturn or other conditions caused by a public health emergency, and (2) an excluded employer must attempt to contact the employee if an equivalent position becomes available in the next year.  While this explicit exception for small employers could be read to mean that no such exception is available for employers with more than 25 employees, this would contradict existing FMLA regulations (which appear to be incorporated into the Act) providing that there is no reinstatement obligation if an employer can show that “an employee would not otherwise been employed at the time reinstatement is requested” as the result of a reduction-in-force.  29 C.F.R. § 825.216(a).  The current DOL guidance may be seeking to reconcile this apparent contradiction by stating that this new provision is in addition to the existing FMLA standards.  See the DOL Q&A (nos. 43), for details.

Notice [updated]

While the Act does not explicitly require employers to provide notice of the E-FMLA provisions, these are covered in DOL’s model posters (in English and Spanish), which are required to be posted for compliance with the paid sick leave provisions of the Act.

NEXT STEPS FOR EMPLOYERS

Employers with fewer than 500 employees should take steps immediately to prepare to comply with the provisions of the Act.  Employers will also be required to provide notice to their employees in the form approved by the Secretary of Labor.  In addition to the federal Act, several states have proposed legislation to enact or expand their own paid sick leave or family and medical leave laws to address COVID-19 issues.  These state laws may impose additional requirements beyond the requirements of the federal Act.  Though Massachusetts has not yet enacted legislation to expand paid sick leave or family and medical leave, the legislature has taken several measures to address the needs of employees and businesses in the Commonwealth, including loosening restrictions on unemployment claims and working with banks and other stakeholders to ease financial pressures on businesses.  We will continue to monitor legal developments related to COVID-19 and provide updates as new laws applicable to employers are enacted.

[1] These links are for the private employer posters; federal employer posters are also available at the DOL’s COVID-19 site.

[2] We note that it appears the posters are still being updated, so employers may wish to check the linked page for the most updated version immediately before posting.

Martha Zackin

COVID-19: Department of Labor Issues Guidance on Families First Coronavirus Response Act

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By Bello Welsh LLP

The Department of Labor’s Wage and Hour Division has issued materials providing guidance (the “DOL Guidance”) on the Families First Coronavirus Response Act (“FFCRA”).  These materials, which include Q&A documents and fact sheets for employers and employees, can be found here.  The same page also includes links to the notices that employers must post. For a detailed summary of the paid sick leave and Emergency FMLA provisions of the FFCRA, please refer to our earlier alert, available here.  Read more →

Martha Zackin

COVID-19: DOL Publishes Required Poster Regarding Rights Under FFCRA

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The United States Department of Labor has published the new required notice relating to paid sick leave and expanded FMLA under the Families First Coronavirus Response Act (FFCRA).  The poster may be found here.

 

FAQs about this required notice may be found here.  Importantly now with most workplaces operating on a remote basis, an employer may satisfy this requirement by emailing or direct mailing this notice to employees, or posting this notice on an employee information internal or external website.  Employers are not required to send the notice to recently-laid off employees.

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Martha Zackin

COVID-19 Challenges: Updated Q&As for Employers [SUPERSEDED]

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By Bello Welsh LLP

This Alert has been superseded.  The updated Alert is available here.

On March 20, 2020, we posted a series of frequently asked questions and answers, which you may access here.  The following are additional questions that have been raised since; we will continue to update as developments warrant.

Question 18:  Our organization is covered by the FFCRA.  We have reduced a number of employees to part-time in response to the current situation, with some working only one day per week.  Will those employees still be eligible for the paid public health emergency FMLA leave and paid sick time under the FFCRA?

Answer 18:  Yes.  There is no minimum hours threshold to receive paid public health emergency FMLA (“E-FMLA”) leave or paid sick time under the FFCRA.  The amount of paid sick time granted to part-time employees is not the full 80 hours, but rather the average number of hours the employee works over a two-week period.  For E- FMLA leave, pay is pro-rated based on the number of hours the employee would otherwise be regularly scheduled to work.

If an employee does not have a regular schedule, the amount of FMLA leave pay is calculated based on the average number of daily hours over the six months preceding leave (or, for newer employees, the reasonable expectation of the employee at the time of hiring of the average number of hours that the employee would be normally scheduled to work).

Note that employees must have been employed for at least 30 days to be eligible for the public health emergency FMLA.

Question 19:  We have employees currently on furlough.  If an employee is called in to work for a few days during the furlough period, does the employee become eligible to receive paid public health emergency FMLA leave and paid sick time under the FFCRA?

Answer 19:  Most likely, yes.  Nothing in the FFCRA excludes situations like this.  However, the amount of pay would be pro-rated as described in Q&A 18.

Question 20:  We are temporarily laying off employees.  We don’t know how long the layoff will last, but we expect the employees will come back to work in the future.  Do we need to pay out employees’ accrued, unused vacation at the start of the layoff?

Answer 20:  State laws regarding the payout of accrued vacation vary, so be sure to check the law in all states where you are conducting temporary layoffs.

In Massachusetts, state law requires that “any employee discharged from . . . employment shall be paid in full on the day of his discharge.”  M.G.L. c. 149, §148.  While this language could support the position that accrued vacation need not be paid in connection with a temporary layoff, as opposed to a permanent termination, the Massachusetts Attorney General’s Office very recently released COVID-19-related guidance to the contrary.  The Massachusetts Attorney General’s Office guidance (available here) states that “when an employee is temporarily laid off, they have a right to be paid all of their earned wages, including all accrued vacation pay, on that same day.”  The Attorney General’s Office has indicated it will not take enforcement action for untimely payment of vacation pay if an employee voluntarily agrees to save accrued vacation for later use.  However, the Attorney General’s Office notes that it does not have control of private litigation, and employees who agree to defer vacation payment now would technically still have the legal right to sue later.

Based on the Attorney General’s Office guidance, the conservative approach is to either pay employees accrued, unused vacation upon layoff or allow the individual to voluntarily defer the payout, especially since Massachusetts wage laws provide automatic triple damages and attorneys’ fees for violations.

Question 21:  Can employees use paid sick time under the FFCRA if we cannot provide them any work hours due to a government-ordered closure of non-essential businesses or a “stay-at-home” order?

Answer 21:  The answer is not clear.  Paid sick time under the FFCRA may be used if “[t]he employee is subject to a Federal, State, or local quarantine or isolation order related to COVID-19.”  The term “isolation order” could be read broadly to refer to stay-at-home orders and government-ordered business closures, or narrowly to refer to an isolation order specific to a particular individual, for example related to that individual’s actual or potential exposure to the virus.  We will monitor for guidance on this point.

Question 22:  Can our organization continue to provide medical and dental insurance to employees who are on furlough or temporary layoff?

Answer 22:  Yes, as long as you follow the requirements of your insurance plans or the provisions of COBRA, as explained below.  As a first step, you should check your insurance plans, as most contain a requirement that employees work a minimum number of weekly hours to be eligible for coverage.  Insurance plans may also limit coverage for individuals who have been laid off, even temporarily.  If your furloughed or laid off employees do not meet the technical eligibility requirements of the plans, you can request an exception from your insurer to maintain active coverage.  We understand that insurers are being flexible in granting exceptions to eligibility requirements due to the unusual circumstances caused by the pandemic.

If your insurer does not allow you to maintain regular coverage for furloughed or laid off employees, then the COBRA law provides an alternative method to continue such coverage.  COBRA notices should be issued to each affected individual, who will need to elect COBRA to continue coverage.  Employees are typically permitted to elect COBRA for up to 18 months, far longer than expected layoffs.  While individuals generally pay the full premium for COBRA coverage, employers may choose to pay some or all of the premium instead.  If you do so, be sure to clearly communicate to employees any time limits or other restrictions on the premium payments the organization is willing to provide.

Note that small employers not covered by COBRA may be subject to state laws concerning continuation of health coverage, such as the Massachusetts mini-COBRA law.

Martha Zackin

COVID-19 Challenges: A Q&A For Employers [SUPERSEDED]

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By Bello Welsh LLP

This Alert has been superseded.  The updated Alert may be found here.

Organizations are facing unprecedented challenges as the result of COVID-19.  The virus’s impact on the workplace is significant and implicates a host of issues under employment law.  Additionally, on March 18, 2020, the federal government passed a new law, the Families First Coronavirus Response Act (FFCRA), that imposes new obligations on employers.

Bello Welsh has published the following resources: Key Considerations for Employers Amid the COVID-19 Pandemic and Families First Coronavirus Response Act Signed into Law , which provides a summary of the relevant provisions of the FFCRA.  This document is intended to supplement those resources and answer additional questions that may arise.

Question 1:  We may be forced to furlough, temporarily lay off, or permanently terminate employees as the result of economic conditions caused by COVID-19.  Are we required to give advance notice or severance pay for terminations, or to pay employees on furlough or temporary layoff?

Answer 1:  Generally, no, with a few caveats.  First, if the action is a layoff or plant closing covered by the federal WARN Act or similar state or local law, advance notice (and in New Jersey severance) may be required. See Question 9 below.  Second, if your workforce is unionized, the applicable collective bargaining agreements may impose contractual obligations. See Question 11 below. Third, employment agreements with executives and other employees may contain notice or severance requirements, particularly in connection with permanent terminations.

Question 2:  The FFCRA gives employees new sick pay and paid leave entitlements.  Who pays for these, employers or the government?

Answer 2:  Employers must “front” the money by paying employees directly, but the amounts will be subsidized by the government in the form of a tax credit or reimbursement, specifically a credit against quarterly social security payments.  If the social security payments are not large enough to cover the credit, employers will be issued a refund.

Question 3:  The FFCRA expands the reasons why employees can take leave under the Family and Medical Leave Act (FMLA).  Do we need to worry about this if our organization is too small to be covered by the FMLA or if the employee doesn’t meet typical FMLA eligibility requirements?

Answer 3:  Yes.  The FFCRA has greatly expanded the scope of employers and employees covered by the new leave requirement.  See Families First Coronavirus Response Act Signed into Law at [hyperlink] for the details.  Note, however, that large employers with 500 or more employees are not covered by the public health emergency leave or sick pay requirements of the FFCRA.

Question 4:  Do we have to affirmatively notify employees of the new public health emergency leave and sick pay requirements of the FFCRA? 

Answer 4:  As to sick pay, yes.  The FFCRA requires employers to post notice of the requirements of the new emergency sick leave law in a conspicuous location in the workplace where notices are customarily posted.  Since many offices are closed and many employees are working from home, employers may wish to email the notice to employees and post it on the organization’s intranet, if one exists, in addition to physical posting.  The Secretary of Labor will publish a model notice that can be used, which we will distribute when it becomes available.

There is no notice requirement for the new public health emergency leave under the FMLA, but employers may wish to notify employees of this benefit.

Question 5:  We already provide paid sick time to employees under company policy and state and local laws.  Do we have to provide additional sick time under the FFCRA?

Answer 5:  Yes.  The new emergency paid sick time obligation is in addition to any paid sick time or other paid time off provided under employer policy, collective bargaining agreement, or other federal, state, or local law.

Question 6:  Are employees who are on temporary layoff or furlough eligible to receive public health emergency leave pay or sick pay, assuming they otherwise meet the eligibility requirements?

Answer 6:  This question is not answered by the FFCRA.  However, our reading of the law is that the new paid leave/sick time is not required for employees who were put on temporary layoff or furlough before requesting any emergency leave or sick time.   The new leave and pay entitlements appear intended to protect those employees who are unable to work when an employer needs them, not employees on layoff.  Nonetheless, the FFCRA contains some ambiguity, and this view could be subject to challenge.

Question 7:  We were considering a reduction-in-force to deal with economic conditions, and now we are especially concerned with the cash flow issues the new paid public health emergency leave and paid sick leave may cause for our organization.  Would it violate the law for us to have a reduction-in-force earlier to avoid potential paid leave/sick time obligations under the FFCRA?

Answer 7:  It is not clear whether the non-retaliation and related provisions in the FMLA and FFCRA would be construed to prohibit a layoff motivated by a variety of economic reasons, one of which may  be the specter of potential cash flow problems caused by new FFCRA obligations.  As such, it is risky to rely on the avoidance of FFCRA obligations as a reason for having or accelerating layoffs.  Organizations also should not select specific individuals for layoff based on the likelihood that they will utilize the new paid public health emergency leave or paid sick time as doing so could violate anti-discrimination laws in addition to the FFCRA and FMLA.

Question 8:  If we conduct a reduction-in-force for economic reasons, are we allowed to include those employees who are on public health emergency leave under the FMLA/FFCRA, or are they guaranteed reinstatement to their jobs?

Answer 8:  The answer is not clear.  Under existing FMLA regulations, if an employer can show that “an employee would not otherwise have been employed at the time reinstatement is requested” as the result of a reduction-in-force, then there is no reinstatement obligation.  See 29 C.F.R. §825.216(a).  However, the FFCRA contains an explicit exemption from reinstatement for small employers (with fewer than 25 employees) if the job no longer exists due to changed economic or other operating conditions that are caused by a public health emergency and impact employment, and certain other conditions are met.  This explicit exception for small employers could be read to mean that no such exception is available for larger employers, which would contradict existing FMLA regulations.   It is advisable to consult with legal counsel if this situation arises.

As under the existing FMLA, it is clear that an individual may not be selected for termination, in whole or part, because the individual used or requested public health emergency leave or paid sick time under the FFCRA.

Question 9:  How do I know if the federal WARN Act or similar state laws apply to our anticipated layoff or reduction-in-force?

Answer 9:  The WARN Act is a very complicated statute, and legal counsel should be consulted if there is a possibility the law may be implicated.  The WARN Act applies to employers with 100 or more employees (excluding some part-time and recently-hired employees) or who have 100 or more employees (including all part-time and recently-hired employees) who work at least 4,000 hours per week, exclusive of overtime.[1]   In general, if your organization is anticipating a temporary layoff, reduction-in-force, reduction in hours, or closing of a particular facility or operation that impacts the employment of 50 or more individuals, a more detailed WARN Act analysis is advised.

Massachusetts does not have a state analogue to the federal WARN Act.  However, various other states, including but not limited to California, Illinois, New Jersey, and New York, have statutes similar to the federal WARN Act, and many apply to smaller employers and personnel actions impacting smaller numbers of employees.

Question 10:  Does the WARN Act allow any flexibility in situations like this, where economic conditions are changing rapidly and unpredictably?

Answer 10:  Yes.  The federal WARN Act contemplates situations where the need for layoff was unforeseeable and it is hard to predict how long layoffs or reductions in hours may last.  Even in such situations, however, WARN imposes very specific obligations on employers, and there are significant consequences for non-compliance.   If it is possible that the WARN Act may apply to your employment action, legal counsel can help guide you through the WARN Act’s requirements and assist you in taking advantage of any flexibility available under the law.  Note that state law requirements may differ from those in the federal WARN Act.

Question 11: Part of my organization’s workforce is unionized.  Do we have special obligations with respect to any anticipated layoffs, closures, or reductions in hours?

Answer 11:   Yes.  You must review your collective bargaining agreement for specific provisions regarding seniority, layoff, recall, notice provisions and possibly other matters.  Unions are sending out letters to employers reflecting that they expect employers to follow these provisions regardless of the crisis.  There may also be an obligation to bargain about the impacts of layoffs.  Experienced labor counsel can assist with reviewing relevant collective bargaining agreements and obligations before taking action.

Question 12:  We are worried that some of our employees, specifically older individuals and those who have shared they have certain underlying health conditions, may be especially vulnerable to COVID-19, and we would like to help prevent them from being exposed.  Can we offer these employees the opportunity to work from home without allowing other employees in similar positions to do so?

Answer 12:  The best practice in this circumstance is to invite employees with particular concern about COVID-19 due to risk factors to raise the issue and to deal with concerns raised by employees on a case-by-case basis.  However, if you wish to affirmatively reach out to employees in high-risk categories, be sure not to compromise the privacy of an employee’s medical information or make assumptions about an employee’s medical status beyond what the employee has disclosed to you.  There is always the possibility, though, that the employees you affirmatively reach out to and/or those who may be in high-risk categories that you do not allow to work from home might contend that your actions were based on improper consideration of protected characteristics, such as age, disability or pregnancy.

For those employees who are required to work on-site, employers should take the steps recommended by federal, state, and local public health authorities to reduce transmission of COVID-19.

Question 13:  Our organization generally does not allow certain employees to work from home, even as an accommodation of a disability, because we have determined that being in the office/worksite is an essential function of certain jobs.  If we allow employees to work from home as the result of the public health emergency, are we compromising our ability to argue later that being at work is essential?

Answer 13:  Do not let the impact on future disability accommodations drive your decisions about allowing work from home during the public health crisis.  However, if you are concerned about future impact, be clear in all communications to employees that working from home is being allowed due to the extraordinary public health emergency even though many important aspects of people’s jobs cannot be performed remotely.

Question 14:  Can we check the temperatures of all employees before allowing them to come in to work? 

Answer 14: Yes.  Now that COVID-19 has been declared a pandemic, guidance from the Equal Employment Opportunity Commission (EEOC) allows temperature checks for all employees.  However, there are numerous practical considerations that should be resolved before undertaking this measure, including whether there is an employee who is trained to do the checks, has reliable equipment and can be safe in doing so; whether employee privacy can be protected in the case of a positive result; and whether a contingency plan exists to deal with excluded employees.  It is also possible that state laws may diverge from the EEOC guidance, though that seems unlikely under the circumstances.

Question 15:  Can I and should I tell other employees if we learn that someone with COVID-19 symptoms or a positive test was present at work, and should I exclude those other employees from the workplace for 14 days?

Answer 15:  Many employers are choosing to notify “Tier 1” (direct) contacts of an employee who has tested positive for COVID-19 or was in close contact with someone who tested positive, and we believe that approach is permissible and potentially could be viewed as required under the Occupational Health and Safety Act (OSHA) in some circumstances.  Given the current lack of availability of testing, making such notifications where the employee has symptoms but has not had a test may also be prudent.  However, going further to second-level contacts (those in contact with Tier 1 employees) may not make sense absent additional information indicating risk of exposure.  In making the notifications, employers should be careful to protect the privacy of the affected employee to the extent practical and must avoid seeking disability-related information from employees being notified.  Temporary exclusion of employees who have tested positive or who have symptoms consistent with COVID-19 infection is both permissible and prudent.  Employers should always follow the guidance of federal, state, and local public health authorities with respect to notifications.

Question 16:  Can I require all employees returning from travel or other leave to fill out a questionnaire confirming that they are not a risk to the workforce?

Answer 16:  Maybe, depending on the questions asked.  Generalized questions that do not elicit disability-related or other confidential information are permissible.  These could include asking the employee to confirm such things as that s/he is free of fever or other known COVID-19 symptoms, has not been in contact with a positive or presumed positive individual, and is not under an order or recommendation of quarantine.

Question 17:  If an employee develops COVID-19, am I required to record the illness or report it to the Occupational Safety and Health Administration (OSHA)?

Answer 17:  Maybe.  Generally, an illness is recordable if the illness is contracted as a result of the employee performing their work-related duties, and if it requires medical treatment beyond first aid or days away from work.  Although common colds and the flu are excluded from the obligation to record work-related illness, COVID-19 is not excluded.  Accordingly, a confirmed case of COVID-19 is a recordable illness if a worker is infected as a result of performing their work-related duties, provided it requires medical treatment or days away from work (which is likely, unless the employee is asymptomatic and already working remotely).  Moreover, if an employee who contracts COVID-19 at work later requires in-patient hospitalization, you must report the in-patient hospitalization to OSHA.

Of course, it may be difficult or impossible to know whether an employee’s infection actually resulted from their performance of work-related duties.  That said, best practice would be to assume that if an employee develops COVID-19 after having had known contact with another employee who has a confirmed case of COVID-19, the incident should be recorded or reported, as applicable.

[1] The WARN Act does not identify a single point in time at which employer size is to be measured in all circumstances.  If your organization is near the threshold size or has exceeded it in the recent past, it is advisable to do a deeper dive on whether the law may apply.