The Center for Disease Control’s recommended 14-day self-quarantine period for those infected or potentially infected with COVID-19 and Governor Cuomo’s order that, in essence, mandates the majority of New York businesses classified as non-essential to close their doors, raises many questions for both employers and employees. Many New Yorkers are questioning how they are going to keep their lights on and business owners questioning how their businesses will survive. Both the federal and state legislatures have enacted legislation that addresses many of these questions. The following is a summary of the obligations imposed on businesses and the benefits afforded employees under the two recently enacted laws.
The Families First Coronavirus Response Act
The federal Families First Coronavirus Response Act was the first major legislative response to the COVID-19 virus’ impact on our workforce. The Act, which goes into effect April 2, 2020, provides “qualified” employees with (1) two weeks of paid sick leave, (2) job protection for up to 12 weeks, and (3) 12 weeks of paid leave to people supervising children whose schools are closed due to the virus or where there child-care services are not available due to the virus.
Who is a “Qualified” Employee?
The Act only provides leave to qualified workers. Not everyone in the workforce is covered. An employee is a qualified worker if they
1. are subject to a federal, state, or local quarantine or isolation order;
2. have been advised by a health care provider to self-quarantine;
3. experience COVID-19 symptoms and seek medical treatment;
4. care for an individual who is self-quarantining, due to medical advice or government-issued quarantine or isolation order;
5 experience any other conditions substantially similar to COVID-19; or
6 care for a minor child whose school or day care is closed due to the virus.
Limitations Apply to otherwise Qualified Workers
There are limitations. For example, to qualify for benefits under the Act triggered by the need to provide childcare, the employee must have been employed for at least 30 days.
For the job protection provision to apply with respect to the need to provide childcare, employees must be unable to work or telework. . The job protection provision is not applicable to employees who become ill or are missing work to care for an adult. For employees subject to those conditions, the original version of the Family Medical Leave Act is pertinent.
Benefits Afforded Qualified Workers
Unpaid and Paid Leave
The first ten (10) days of leave may be unpaid, but an eligible employee may opt to use accrued paid leave. However, businesses cannot require an employee to use accrued paid leave. After 10 days, employees are entitled to paid leave. If an employee has fluctuating or variable hours, then the business can calculate the average hours worked per day over the last 6 months.
Employees receiving leave for criteria (1), (2) or (3) above receive the normal amount that they are usually paid, up to a maximum of $511 a day or a two week total of $5,100, which is the equivalent to $130,000 salary. Employees receiving leave due to criteria (4), (5) or (6) above receive 66% of their normal rate, to a maximum of $200 per day or $2000 in total over a two week period.
Return to Employment Post-Leave
Generally, businesses must provide qualified or covered employees the same position or an equivalent position once the quarantine period ends.
There is an exception for businesses with 25 or fewer employees if :
● due to the coronavirus, the business eliminated the subject position because of economic or operating imperatives; and
● the business has made reasonable efforts to restore the employee to an equivalent position; and
● if an equivalent position becomes available, the business makes reasonable efforts to contact the employee and offer the employee the equivalent position. The contact period continues for one (1) year.
We recommend that employers, as a best business practice, provide notice to employees of the Act. E-mail notice is sufficient.
Businesses Wholly Exempt from the Act
If a business has more than 500 employees, the business and its employees are excluded from coverage the Act.
The Act also exempts small businesses if providing leave would force them to go out of business.
Part-time employees and self-employed workers (e.g., Uber drivers) are covered under the Act.
Employees that have been denied a COVID-19 test are eligible for leave if they experience COVID-19 symptoms and seek medical treatment or experience any other conditions substantially similar to COVID-19.
Businesses are obligated to fund the required payments to their employees under the Act, not the federal government.
The federal government will, however, “reimburse” the full amount of the costs incurred in the form of payroll tax credits over a three-month period.. Businesses can take this credit against the portion of Social Security payroll taxes that the business would normally pay as an employer and the tax credit can cover up to the total amount owed toward Social Security payroll taxes for every employee, regardless if he or she took leave under the Act. For businesses that provide health care insurance coverage, they can further increase the tax credit that the business currently takes for providing said coverage by the amount the business has expended to provide coverage while the employee benefitted from job Protection or Emergency Paid Leave.
Businesses cannot fire, discipline, or discriminate against an employee who attempts to use any right under the Act. Also, businesses cannot condition employees to cover their expected work hours or duties on receiving benefits under the Act.
New York’s Paid Leave Legislation
The New York State Assembly passed legislation intending to cover what it perceived as loopholes under The Families First Coronavirus Response Act. Under New York’s legislation, all private and public sector employees are eligible for sick leave and wage replacement while they are quarantined or isolated by an official directive, whether that mandatory or precautionary. However, what the employee is allotted fluctuates based on the size of the business.
Employees of businesses with 10 or fewer employees with a net income of less than $1 million will receive unpaid sick leave but immediately become eligible for Paid Family Leave and Temporary Disability Insurance benefits.
Employees of businesses with 10 or fewer employees and a net income of greater than 1 million and businesses with between 11 and 99 employees, will receive at least 5 days of paid sick leave, which is followed by Paid Family Leave and Temporary Disability Insurance benefits eligibility.
Employees of businesses with 100 or more employees, as well as all public employees will receive a minimum of 14 days of paid sick leave.
Public employers–e.g. town, public schools, district, county, city, village, fire district, and state–must provide at minimum 14 days of paid sick leave, regardless of the number of employees they employ.
There are, of course, exceptions to the above. For instance, if an employee is quarantined and medically asymptomatic and able to work remotely, that employee is not eligible for leave. Additionally, employees who traveled outside the country to certain affected regions, such as China or Italy, when the US CDC had a restrictive travel notice in place, are not eligible for covered leave, unless the travel was at the direction of his or her employer.
Key Take-Aways for Employers and Employees
Business cannot require employees to use existing sick leave accruals or paid time off for the COVID-19 quarantine order. Business that are required to provide paid sick leave must provide that leave separate from any accruals. Further, qualified employees are not required to apply for paid sick leave, however, if employees exhaust their leave, then they should apply for Paid Family Leave and disability.
Business must protect the employee’s position during the leave and employees are entitled to their prior position pre-quarantine once the quarantine is over. Business employees should submit their Paid Family Leave application (Request for Paid Family Leave Form PFL-1) to the business’s insurance carrier within 30 days after the start of the employee’s leave.
This is a rapidly changing situation and it is reasonable to expect the landscape may change as things progress. If you are an employer and have questions about these evolving rules, we can help. Contact Tim Lambrecht at (315) 445-1700 or email@example.com or at the Wladis Firm.
Please see our update: https://wladislawfirm.com/update-paid-leave/