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COVID-19, SMALL BUSINESSES AND PAID TIME OFF

COVID-19 and Paid Time Off

The Families First Coronavirus Response Act (FFCRA) goes into effect on April 1, 2020. The law has several provisions that will primarily affect only companies of certain sizes.

FFCRA governs companies with 500 or fewer employees; and small businesses, for the purposes of this article, are businesses with 50 or fewer people. Small businesses may apply for an exemption under the law if complying with it would “jeopardize the viability” of the company.


As it relates to COVID-19, the legislation defines an “emergency leave day” as a day in which an individual is unable to work due to one of four qualifying reasons: (1) the worker has a current diagnosis of COVID-19; (2) the worker is quarantined (including self-imposed quarantine), at the instruction of a health care provider, employer, or government official, to prevent the spread of COVID19; (3) the worker is caring for another person who has COVID-19 or who is under a quarantine related to COVID-19; or (4) the worker is caring for a child or other individual who is unable to care for themselves due to the COVID-19-related closing of their school, child care facility, or other care programs. Generally, an “eligible individual” is someone who was working at the company at least thirty days before they were impacted by COVID-19.

Paid Sick Leave

Pursuant to FFCRA, all employers with 500 or fewer employees are required to

  • Allow employees to gradually accrue seven days of paid sick leave and to provide an additional 14 days available immediately in the event of any public health emergency, including the current coronavirus crisis.

  • Provide an additional 14 days of paid sick leave, available immediately at the beginning of a public health emergency, including the current coronavirus crisis.

  • Ensure that the paid sick leave covers days when the employee’s child’s school is closed due to a public health emergency when said employee’s employer is closed due to public health emergency, or if the employee or his/her family member is quarantined or isolated due to a public health emergency.

In total, this provision requires employers with fewer than 500 employees to provide employees (regardless of the employee’s duration of employment before the covered leave) with 80 hours of paid sick leave at the employee’s regular rate.

Under this section of the law, an employee is covered if s/he is (1) self-isolating because the employee is diagnosed with coronavirus; (2) complying with a recommendation or requirement to quarantine due to exposure to, or showing signs of, the virus; (3) caring for an at-risk family member who is self-isolating due to a diagnosis or exhibiting signs of the virus; or (4) caring for his/her child because the child’s school has been closed due to the virus and his/her childcare provider is unavailable.

Importantly, small businesses (50 or fewer employees) can apply to be reimbursed for the costs of providing the 14 days of additional paid sick leave used by employees during a public health emergency. Additionally, construction employees are entitled to receive sick pay based on hours they work for multiple contractors.

SSA Benefits

Under FFCRA, eligible workers will receive a benefit for a month (up to three months) in which they must take 14 or more days of leave from their work due to the qualifying COVID-19-related reasons. Days when an individual receives pay from their employer (regular wages, sick pay, or other paid time off) or unemployment compensation, however, do not count as leave days for purposes of this benefit. The benefits will be disbursed by the Social Security Administration (SSA).

The benefit amount will be equal to two-thirds of the individual’s average monthly earnings (based on the most recent year of wages or self-employment income for which records are readily available), up to a cap of $4,000. The benefits will be available for leave that occurs from January 19, 2020 through March 30, 2021. Benefits can be paid retroactively, and applications can be filed until September 30, 2020. The worker can apply online, by phone, or by mail.

Family Medical Leave Act (FMLA)

Furthermore, FFCRA expands FMLA. What that means is that thousands of employers not previously subject to FMLA now must provide job-protected leave to employees for a COVID-19 coronavirus-designated reason). That is because the current employee threshold for coverage under FMLA (employers with 50 or more employees) has been amended to include employers with fewer than 500 employees.

Further, FFRCA lowers the eligibility requirement such that an employee who has worked for the employer for at least 30 days prior to the designated leave is eligible to receive paid family and medical leave.

As of April 1, 2020, any employee who has worked for an employer for at least 30 days (before the first day of leave) may take up to 12 weeks of paid, job-protected leave to allow the employee to (1) comply with a requirement or recommendation to quarantine due to exposure to, or symptoms of, coronavirus; (2) to care for an at-risk family member who is adhering to requirement or recommendation to quarantine due to exposure to, or symptoms of, coronavirus; or to (3) to care for the employee’s child if the child’s school or place of care (including if the childcare provider is unavailable) has been closed due to a public emergency.

The first 14 days of Emergency FMLA may be unpaid, but an employee may elect to substitute any accrued paid time off, including vacation or sick leave, to cover some or all of the 14-day unpaid period. After the 14 days, 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 a part-time or irregular schedule are entitled to be paid based on the average number of hours the employee worked for the six months prior to taking Emergency FMLA. Employees who have worked for less than six months prior to leave are entitled to the average number of hours the employee would normally be scheduled to work. This program will remain in effect until December 31, 2020.

Taken together, the above means that employers with 500 or fewer employees are required to provide 80 hours of paid sick leave under FFRCA and 12 weeks under FMLA (as amended). Employers with 50 or fewer employees may appeal to the Department of Labor for an exemption, and employees may also seek benefits through the SSA, however, any benefits paid through the SSA will be offset by monies received by the employees employer or via unemployment insurance.

What if a company with over 50 employees can’t afford to provide the paid time off? What if the company has been forced to close due to COVID-19, is it still liable to provide the paid time off? How do the laws of NY State and N.Y.C. compare and interact with federal laws? These questions and more will be answered in the next blog. Stay tuned…


 

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