As we individually and collectively navigate the unknown territory that is the COVID-19 pandemic, the attorneys and staff of RRD remain available to assist you in that journey. The pandemic will affect us in many ways, and the plethora of local, state and federal laws and regulations are daunting and likely will change in the coming days.
For Employers, there are numerous laws that are implicated in future decision-making. The below is intended to make you aware of some of the laws with which Employers will have to contend. It is not possible to discuss all such laws, regulations and ordinances as attention to the state in which an Employer operates must be considered. The following discussion will touch on those laws that most Employers will have to confront.
We will endeavor to update you on employment issues as the landscape becomes clearer. In the meantime, we stand ready to assist our clients with specific issues, and we remain available via email and phone should you need to contact us directly.
March 19, 2020 - 12:22 PM
Family and Medical Leave Act (FMLA)
Ordinarily, only Employers who have 50 or more employees in any 20-week period within 75 miles of a worksite are subject to the FMLA, and only employees who have worked for their Employer for at least 1,250 hours in the 12 (consecutive) months before taking leave are entitled to FMLA leave. New federal legislation changes these coverage tests.
The Families First Coronavirus Act ("Act") amends the FMLA to apply to all Employers who have fewer than 500 employees and creates two different benefits that apply to all employees who have worked for the Employer for at least 30 days.
The first creates emergency FMLA leave rights for employees necessitated by school or childcare closures where the parent cannot telework. The first ten days of leave is without pay and, thereafter, is with pay at two-thirds of the employee's regular pay rate capped at $200 per day with an aggregate cap of $10,000. The Employer may require the employee to combine the unpaid portion with any paid leave under an Employer plan. Emergency leave is available to any employee who has worked for the Employer for at least 30 days. The Secretary of Labor, by regulation, will be able to exempt Employers of fewer than 50 employees. The reinstatement to work provisions of the FMLA applies to emergency leave taken under the new Act.
The second benefit is paid Sick Leave if one of the following applies:
- Leave is required by a federal, state, or local isolation order.
- The employee has been advised to self-quarantine.
- The employee is sick and seeking a COVID-19 diagnosis.
- The employee is caring for someone subject to quarantine.
- The employee is caring for a child whose school has closed due to the virus.
- The employee is experiencing factors substantially consistent with those set by the Secretary of Health.
If the Employer has its own PTO policy, paid sick leave under the Act must be used first and may not be consecutive with PTO under an Employer plan, although Employers will be able to modify any PTO plan. Paid sick leave under the Act is capped at $511 per day and $5,110 in the aggregate calculated at the employee's regular pay rate if the leave is taken for one of the first three reasons listed above (i.e., the leave is for the benefit of the employee him/herself and at $200 per day if caring for someone else.) It appears that, if an Employer closes completely, no paid leave is required. Employers must be aware of their own leave policies and any paid leave due under state law or local ordinance. New Jersey has a particularly aggressive paid leave statute. (See discussion below about New Jersey's MiniWARN Act.)
Non-profit entities, including religious organizations, are covered by the Act.
Additionally, a host of issues arise under the Act. For example, do parent and subsidiary companies combine to determine if they are over 500 employees and, therefore, not covered by the Act? Probably not, unless they satisfy the Department of Labor's guidance on who are joint employers. Are employees working outside the US counted for the 500-employee test? Probably not.
Employers should also bear in mind that the COVID-19 virus might result in a condition that is covered by the regular provision of FMLA.
HIPAA - OSHA Interplay
Employers who have employees who test positive for the virus must bear in mind conflicting obligations under these laws. OSHA requires Employers to provide a safe workplace. HIPAA requires Employers to treat employee medical information in confidence. Employees handling health or medical information should be reminded of their duties of confidentiality regarding such information. If an employee tests positive for the virus, Employers should NOT reveal the employee's name. At the same time, Employers SHOULD inform other employees who had contact with the impacted employee that they have been exposed, urge them to be tested, require appropriate quarantine, and take the necessary steps to render the worksite safe from further exposure.
Employers naturally will want to provide a healthful place to work, which might lead to making inquiries about employee health and requiring health tests or screenings. Employers must bear in mind that any such inquiries or mandated testing creates issues under the ADA, GINA, and various state laws (e.g., New Jersey's Law Against Discrimination.) Employers should consult counsel before making inquiries about an employee's health or mandating any screening or testing. Employees who have access to other employees' health information should be reminded of confidentiality obligations under both the ADA and HIPAA. No one should be wishing a speedy recovery from the virus to another employee unless that employee has publicly shared his or her condition.
Although there do not appear to be any lasting effects of the virus for those who survive it, it is possible that employees with compromised immune systems or other conditions could have lasting issues that rise to the level of a disability under the ADA or state analogues. Employers will have to be mindful of their obligations to engage in the interactive process under those laws.
Fair Labor Standards and State Wage Acts, Telecommuting
With many workplaces shut down, more and more employees will be working from home. Employers must establish ways to document working from home by non-exempt employees to be sure that they comply with both the federal Fair Labor Standards Act and state and local wage laws. Employers should set policies for how work hours will be recorded and for how overtime will be authorized. Employers who give out a physical payroll will have to create alternative payment methods to ensure timely payment of wages. If an Employer voluntarily closes operations, such laws must be consulted to determine its obligations to pay wages during the shutdown. (See WARN Act discussion below)
Large scale working-from-home will be new for many employers. They need to be concerned with how this new fact of life makes them vulnerable to an increased risk of cyberattacks through employee computers that are not protected by the same security measures as the Employer's computer and data systems.
Government enforced quarantines will prevent many businesses from either fulfilling contractual obligations or prevent others with whom a business has contracted from doing so. Thought should be given to looking at force majeure clauses and engaging in negotiations with contracting parties to set new deadlines for compliance.
Non-Profit organizations, including religious organizations, face all of the above issues. Additionally, fund-raising events will be canceled or, at best, postponed. Non-Profits must plan for how this will impact programs. As many Non-Profits deal directly with the public, they will have to consider cancellation of programs or providing their services via alternative means.
Benefit Plan Distributions
Plan administrators will want to familiarize themselves with the "hardship" provisions of their plans to determine if plan beneficiaries who might request additional or accelerated benefits are entitled to them and what notice is required concerning the effect of receiving additional or accelerated benefits.
WARN Act and MiniWARN Acts
The federal WARN Act requires Employers who have 100 or more full-time employees (not counting workers with less than 6 months on the job and those working fewer than 20 hours) to give 60 days’ notice of a plant closing or mass layoff. The warning is required if the Employer will lay off at least 50 employees at a single site or employs 100 or more at a single site with a combined work week of at least 4,000 hours. The law applies to private Employers, private non-profits and quasi-public employers that are separately organized from a regular governmental entity.
Workers entitled to notice are those who:
- Are terminated or laid off for more than six months or whose work time is reduced by 50 percent or more in any six-month period as a result of a plant closing or mass lay off;
- Reasonably can expect to experience a mass layoff;
- Are placed on a temporary layoff but have a reasonable expectation of being recalled: and,
- Part-time workers subject to a plant closing or mass layoff even though part-time workers are not counted to determine if an Employer is subject to the Act.
WARN Act notice requirements are triggered by any of the following:
- Closing a facility or discontinuing an operating unit permanently or temporarily if it affects at least 50 employees;
- Laying off 500 or more full-time or part-time employees at a single site during any 30-day period or laying off 50-499 employees and the number of laid-off employees is 33 percent or more of the total workforce (not counting part-time employees);
- Announcing a temporary layoff that meets either of the above criteria and then extending the time of the layoff beyond six months; or
- Reducing hours for 50 or more workers by 50 percent or more for each month in any six-month period.
The federal Act exempts from the notice obligations of a faltering Employer, unforeseeable business circumstances that reasonably could not have been foreseen, and natural disasters. It is not clear if the Coronavirus automatically fits into any of these categories.
When notice is required, it must be clear and specific. It must advise workers: if the layoff is expected to be permanent or temporary; when the expected date of layoffs will begin; whether any "bumping" rights exist; and the name and telephone number of an Employer official to contact with questions. Notice must also be given to the appropriate official of any bargaining unit, and to the proper local government office along with any state Rapid Response Dislocated Worker Unit.
In this region, only New Jersey has a MiniWARN Act, and New Jersey Employers must be cognizant of its provisions that, in some respects, are much different from the federal WARN Act.
The New Jersey Act applies to Employers of 100 or more employees, including part-time employees, and requires 90-days' notice. The termination of 50 employees triggers notice obligations regardless of hours worked. The New Jersey WARN Act eliminates the 33 percent and 90-day tests discussed above regarding the federal Act, unless tranches of terminations are for distinct reasons. Transfers of employees out of New Jersey or more than 50 miles within the state count as terminations.
Most importantly, the New Jersey Act requires Employers to give each employee one week of severance pay for each year of employment. If WARN Act Notice is not given, an additional four weeks of severance must be paid.
If you have any questions, or would like additional information, please contact Bob Small, Partner in Reger Rizzo & Darnall’s Employment Practices Group, at 215.495.6541, or via email at email@example.com. We are working with clients to field inquiries and provide advice and guidance in a wide range of areas and industries during the COVID-19 outbreak. Please be sure to check back regularly for updated information. If you have an immediate need, please contact your attorney directly, or email us at firstname.lastname@example.org, and one of our dedicated attorneys will get back to you shortly.