Emergency Paid Sick Leave, Emergency Family and Medical Leave Expansion, CARES Act, and More
By Scott Bishop, Audigy’s General Counsel and Director of Corporate Development and Zea Wintersong and Brad Becker, Audigy Human Resource Managers – April 2, 2020
Please note that the materials and descriptions contained in this communication are for informational purposes only and do not constitute legal advice. Please continue to rely on the advice of your counsel regarding state and local laws and regulations as they pertain to your business. Some links contained herein may lead to third-party sites and are included for your convenience; we recommend that you review the terms and conditions of those sites as you access them.
Below, you’ll find considerations and options available to employers for their employees as they relate to the many legal developments and updates regarding the US Federal government’s response to the COVID-19 pandemic. There are many options and considerations available. Audigy Members are working closely with their Strategic Business Unit teams in order to make the best decisions for their practices. We would advise those not a part of the Audigy membership to consider the below info and work with your trusted HR resources in order to determine what is best for your business and your employees.
Families First Coronavirus Response Act (FFCRA)
Enacted on March 18, 2020, and will be available through December 31, 2020. Two considerations under this act include (i) Emergency Paid Sick Leave, and (ii) Emergency Family and Medical Leave Expansion.
Emergency Paid Sick Leave
This is available to practices and their employees in the event that someone needs time away from work because of COVID-19.
For full-time employees, this is a benefit of 80 hours that provides either:
- 100% of salary (capped at $5,110 for the 80-hour period)
- 66% of salary (capped at $2,000 for the 80-hour period)
The options are dependent on the rationale for absence from work.
Reasons permitted for absence by the employee include:
- Being diagnosed with COVID-19 or showing substantial symptoms requiring home-bound stay
- Being placed in mandatory or self-quarantine isolation
- The employee must care for others who have been affected by COVID-19, including childcare when schools are closed.
In the event that the employee is able to work from home remotely, this act does not provide benefits.
Emergency Family and Medical Leave Expansion
This legislation is a benefit that spans 12-weeks, with the first two weeks unpaid, followed by 10-weeks of paid leave at a 66% of salary with a cap of $10,000, or $1,000 per week.
- The Emergency Paid Sick Leave can be used as a benefit for the first two weeks, while an additional 10 weeks can be used under the Emergency Family and Medical Leave Expansion, allowing for a total of a 12-week paid leave
- Or, the employee can exercise 14-weeks of leave total, 2 of which would be unpaid if he/she qualifies for both the Emergency Paid Sick Leave and Emergency Family and Medical Leave Expansion
This Act applies only to employers who have fewer than 500 employees. Additionally, there will be tax credits to employers to offset costs associated with the payroll tax.
The Secretary of Labor may provide additional exceptions to employers of companies with fewer 50 employees if complying with this Act would jeopardize the business’ future operations.
At this time, there is little information as to what would qualify as an exception or the application process might look like, so please check back as we receive further instructions from the Department of Labor.
Do I need to track any leave that I payout under the FFCRA?
Yes, especially if you want to take advantage of payroll tax credits. Be sure to track FFCRA leave separately from FMLA (i.e., Federal Medical Leave Act) and PTO (i.e., paid-time-off) leave. There may be additional governmental requirements in the future, so detailed tracking is important.
If I have already paid employees for leave due to COVID-19, does that count toward the Emergency Paid Sick Leave or Emergency Family and Medical Leave Expansion?
No. The Act is effective starting April 1, 2020, and is not retroactive. Thus, any absence prior to this starting date would count against the PTO of FMLA.
Can I still lay off employees or put employees on furlough if they are out under FFCRA leave?
Yes, but doing so is based on additional qualifications similar to FMLA leave. FMLA is a protected leave, meaning you cannot dismiss or discriminate against someone because they are on leave. The Act does allow laying off employees for legitimate business reasons, such as insufficient revenue to pay the employee or a lack of work for that employee.
Can I require verification of COVID-19 related absence from my employee?
Yes, but there are specific notification requirements under the Emergency Paid Sick Leave where the employer can request a medical or healthcare letter after the first day of absence (or notification) from work by the employee.
If an employee must be absent from work to care for a child (i.e., Emergency Family and Medical Leave Expansion), this information is typically publicly available and does not require employee verification.
If an employee takes both Paid Sick Leave and Family Medical Leave, do I have to pay for 14 weeks of absence?
No. The maximum paid leave is 12 weeks, with the Emergency Paid Sick Leave used as a benefit for the first two weeks and 10 weeks used as a benefit under the Emergency Family and Medical Leave Expansion.
Coronavirus Aid, Relief, and Economic Security (CARES) Act
The CARES Act, also known as the Federal Stimulus Bill, was signed into law on Friday, March 27, 2020.
This Bill provides a total of $2 trillion in relief to small US businesses and individuals. This Bill provided a direct payment of $1200 to an individual or $2400 to married households. The Bill also permits $500 per child.
The direct payments are available in full for individuals that make less than $75,000 in annual salary or married households that make less than $150,000 in annual salary.
For annual salaries above these thresholds, relief monies are distributed based on a sliding scale, with no relief for individuals who make equal to or greater than $99,000 annually and married couples who make equal to or greater than $198,000 annually.
Timing for these payments has not yet been determined, but payouts are expected to occur quicker for those who elect to receive funds through direct deposit.
The Bill also allows jobless workers an additional 13 weeks of extended benefits as part of the expansion of unemployment insurance. In most states, this would increase unemployment benefits from 26 weeks to 39 weeks. In addition to the state benefit, employees that elect unemployment could be eligible to receive an additional $600 per week for up to four months.
Emergency loans for small business (fewer than 500 employees) is another aspect of the Bill that has relevance to Audigy members.
The emergency loan is available for fixed costs, such as salaries, medical benefits, rent or mortgage, utilities, and interest on existing debt.
Emergency loan monies cannot be used to expand or increase the business. There is also a possibility that the emergency loan could be forgiven, given that the business maintains its current level of employees and their salaries. If employees are laid off or if salaries are reduced, there is a potential that loan forgiveness results in some form of repayment. We are recommending to Audigy Members that discussions be had with their respective Strategic Business Unit teams regarding considerations related to keeping or adjusting employee salaries or to consider layoffs.
Two additional components to the Bill include:
- Stabilizing distressed businesses
- Funding for hospitals
Stabilizing distressed businesses is geared towards businesses that have been severely affected by the COVID-19 outbreak, such as airlines, hotels, and restaurants. Funds to hospitals would permit medical centers and health systems to utilize funds for supplies and equipment to combat the COVID-19 virus.
Employee Safety and OSHA Requirements
A consideration for Audigy practice owners is ensuring that their employees have a workplace free from serious recognized hazards as detailed by the Occupational Safety and Health Administration (OSHA).
Given that COVID-19 is a serious recognized hazard, it is the owner’s responsibility to provide employees with personal protective equipment (PPE), supplies and training for cleaning and disinfecting, and having a plan in place for infection control and exposure.
Employees that are sick should stay home
Employers are well within their rights to mandate an employee staying home when the employee is ill, and it is best if the employer shares this expectation with employees from the outset. If an employee is exposed to COVID-19, it is acceptable to share that someone in the office has been exposed to the virus, but the name of the employee should remain anonymous while protecting the privacy of the infected individual.
What are some considerations that a practice can make as it relates to payroll expenses during times when COVID-19 is negatively affecting clinic revenue?
This decision is not turn-key and varies as a function of each practice.
Typically, two considerations are available.
- First, practices can initiate a reduced hours option for employees, where employees can either work in the office or work remotely if the office is closed to seeing patients. Under this consideration, businesses might be able to participate in a workshare program offered by their state (there are 28 participating states, each having its own requirements), where employees work reduced hours and unemployment compensation makes up some of the difference in income. This option works best for employees with similar roles (e.g., two front office staff), where both employees would work part-time instead of one being laid off. It is important to note that the employer is responsible for initiating the workshare program on behalf of his/her employee. In the event that a state does not offer a workshare program, or the employee does not qualify, employers can legally reduce employee hours, and employees can then apply for unemployment benefits (a cost to the employer). Do note that if an employee is granted unemployment benefits, there is a cost to the business for the claim. For additional support and resources, we’re recommending to Audigy Members that they please seek out their Strategic Business Unit and Human Resources Managers in order to best understand all considerations.
For employers that permit employees to work remotely, consider the following items know to yield successful outcomes. Set clear expectations on the number of hours the employee is expected to work, as well as what deliverables are expected in writing. Further, be clear in how the employee is to record their deliverables. If the employee is asked to make 20 calls daily, for example, procedures on what constitutes a call and how the calls are recorded should be provided, in writing, to the employee. Another option is to request a daily summary of activities. In addition, consider establishing daily or weekly video conferences to check-in and for debriefings.
- Secondly, practices could be forced to close their business or opt to provide employees with no working hours either in the office or remotely. If your state has mandated closure of your business, then the employee could be eligible to receive the Emergency Paid Sick Leave, the Emergency Family and Medical Leave Expansion, or a hybrid of both (i.e., utilizing the Emergency Paid Sick Leave as a benefit for the first two weeks and then 10 weeks benefit under the Emergency Family and Medical Leave Expansion.)
There may be an instance where the practice must consider whether to lay off or furlough an employee. A layoff occurs when an employee is placed on “standby” by their employer, meaning that the employee does not have to receive salary or benefits during a given period of time, and may be recalled to return to work at a later date.
These employees may be eligible for COBRA healthcare coverage and unemployment (a cost to the employer). On the other hand, employees can be furloughed, or placed on a temporary suspension of work and pay. In some cases, employees are eligible to remain on the employer’s health insurance plan (and other benefits). In addition, furloughed employees may be eligible for unemployment insurance benefits, which varies by state. Employers should consult with their General Counsel prior to making these decisions to ensure that the employees’ classification and the procedures used align with the Fair Standards Labor Act.
Interested in learning more about how practices are navigating the COVID-19 pandemic? We invite you to review the rest of our COVID-19 considerations resources, or to reach out directly to our internal teams at Audigy. Our goal is to help practices weather this storm and create healthy, sustainable businesses.