COVID-19 Challenges: Updated Q&As for Employers [SUPERSEDED]

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This Alert has been superseded.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.