Sierra HR Partners is prepared to continue our support for your business throughout the COVID-19 crisis.
What federal benefits are employees now entitled to?
The Families First Coronavirus Response Act impacts employers in primarily three ways.
First, all employees will be eligible for two weeks of Emergency Paid Sick Leave (or E-PSL). This can be taken if an employee is unable to work due to a need for leave because:
1] The employee is subject to a quarantine or isolation order related to COVID-19;
2] A health care provider advised the employee to self-quarantine due to concerns about COVID-19;
3] The employee is experiencing COVID-19 symptoms and seeks a medical diagnosis;
4] The employee is caring for an individual who is subject to an order described in subsection 1;
5] The employee is caring for his/her son or daughter if school or the place of care has been closed, or the child care provider is unavailable due to COVID-19 precautions; or
6] The employee is experiencing substantially similar conditions specified by the Secretary of Health and Human Services.
Even if you already provide generous sick leave benefits to employees, this federal entitlement is in addition to whatever you already provide. There are daily and total caps on pay for EPSL under the reasons outlined above.
The documentation required for EPSL depends on the reasons that employees take EPSL. We would expect documentation for the first two reasons and for an employee to return under reason 3. They would need to provide it for the person they care for under reason 4.
Second, all employees (employed at least 30 calendar days) will be eligible for expanded FMLA leave. This can be taken if the employee is unable to work due to the need to care for a son or daughter under 18 years of age if the child’s school or place of care has been closed, or the child care provider is unavailable due to a “public health emergency” (meaning related to COVID-19). While the first two weeks are unpaid – though an employee may apply paid sick leave, including EPSL – the next 10 weeks are paid at, by the employer, at least two-thirds an employee’s regular rate of pay.
Employers of fewer than 50 may apply for an exception from the Secretary of Labor, though this process has not yet been outlined. As with EPSL, there are daily and total caps on pay for expanded FMLA leave.
These benefits go into effect April 2, 2020. The required poster will be available within seven days of the enactment of the law.
Third, these federal benefits qualify employers for tax credits of 100% of what is paid in the form of EPSL or expanded FMLA payments. Contact your tax professionals for more information.
We are a business that must stay open. Do we need to minimize on-site employees? Do we need to take preventive action for high-risk employees?
Multiple emergency orders have been issued by local municipalities and by the governor. For example:
- State of California Executive Order, Essential Critical Infrastructures, and the state COVID-19 response website
Carefully consider these orders to determine whether you can continue to operate. The governor’s order requires all residents to shelter-in-place except those who work in 16 critical infrastructure sectors as identified by the federal government. Businesses throughout the state must determine if they are covered by a local order and the governor’s order.
If your business can operate in light of local and the state Emergency Orders, you then should consider which of your employees are critical to the operations. Minimizing employees coming to work minimizes the risk of transmission of COVID-19. Fewer employees allow you to participate in the social distancing measures that are so vital to limiting the spread of the infection. Even if this is not possible, you still have a responsibility to “maintain a safe and healthful workplace,” and that will likely involve different workplace measures to limit potential viral spread, including canceling or postponing employee meetings, encouraging hand-washing and other safe behaviors, and modifying how employees interact.
Taking preventive action with high-risk populations could be considered discriminatory, and we do not recommend treating them differently than other employee groups (e.g., sending them home or laying them off). Still, employers can, and should, send people home if they appear to be ill, and especially if they exhibit COVID-19 symptoms.
We are an Essential Business, so we must stay open. Some employees are fearful of continuing to work, and in many cases cannot work remotely.
If an employee does not want to work, and if your business has seen a decline that will necessitate reduction in staffing hours, perhaps there is an opportunity for a win-win arrangement that benefits both the anxious employee and the business.
If that is not possible, employers are not required to provide remote work or limited work schedules. When the new federal legislation goes into effect on April 2, employers will have less flexibility in working with employees; employees will be entitled to two weeks of paid sick leave that covers a wide range of COVID-19-related issues, and potentially another 12 weeks if they are impacted by school closures. Before then, we can approach this largely as we might at any other time off. Does the employee have company benefits (like sick leave or vacation) that apply? Is there a federal leave entitlement (like FMLA) for which the employee qualifies? And is there a disability for which the company must provide a reasonable accommodation? If not, then you may require the employee to be at work, regardless of their personal anxiety.
Does Governor Newsom’s State Order supersede the Fresno emergency order?
Both the state order and municipal order are still in effect; however, where the State order is more restrictive we must comply with the State order.
Both orders define “essential” services, though essential services may still experience reduced demand and essential employees are still subject to reduction in hours or layoff.
Should I furlough employees or lay off employees?
We’ve seen petitions from politicians, including Valley politicians, to take advantage of the Families First Coronavirus Response Act provisions and provide sick leave and FMLA benefits to employees, rather than laying them off, and then collect the 100% tax credits allowed under the legislation. This may be a reasonable measure for many organizations. Other organizations are facing significantly reduced revenues, and it will be difficult to provide these paid benefits even when you anticipate future tax credits. Tax credits may or may not provide a feasible solution for your business.
It may be prudent to make any employment decisions before April 2. ‘Furloughed’ employees and employees with reduced schedules who have not been laid off will qualify for the emergency paid sick leave and expanded FMLA benefits on April 2. Employees who are laid off before then may apply for unemployment insurance benefits.
What if an employee has reduced hours but is not laid off?
Employees may still file for unemployment benefits. Partial unemployment benefits are available for those who have reduced hours, and they can file for unemployment and not be required to look for work. The EDD is recommending that workers file for unemployment benefits online.
Employees in this circumstance would be eligible for emergency paid sick leave and expanded FMLA benefits.
What will happen to employee group health insurance benefits if they are laid off or have reduced hours?
If an employee is laid off, he/she would become eligible to continue benefits through COBRA. If they chose not to elect COBRA coverage, their coverage would end (typically at the end of the month, depending on the terms of your plan).
If an employee works reduced hours, (s)he may become ineligible for your company-sponsored plan. We recommend that you call your benefits provider about eligibility criteria, and whether benefits providers are making accommodations during the pandemic. Employers may also elect to provide employees with assistance in paying health coverage under COBRA for a limited time. This could be a good opportunity to obtain a waiver or release of claims in return for payment of COBRA premiums.