How Should My Business Comply with Employment Laws that Address COVID-19?

Congress recently enacted two laws that give new rights to employees who are affected by the COVID-19 crisis:

• The Emergency Paid Sick Leave Act (EPSLA) requires covered employers to give paid sick leave to certain employees for a period of two weeks.

• The Emergency Family and Medical Leave Expansion Act (EFMLEA) requires employers to give unpaid leave for two weeks, followed by paid leave for ten weeks, to employees who must stay home to take care of children because of school closings or the unavailability of paid childcare.

• Employees may combine EPSLA and EFMLEA to take twelve paid weeks of leave for childcare.

The remedies for violating either law can include twice the amount of the employee’s unpaid wages plus an award of attorney’s fees for bringing a claim to enforce the law. Employers who fire an employee for exercising rights under either law face the additional risk of paying compensatory damages in addition to reinstating the employee or paying lost future wages.

Both laws take effect on April 2, 2020. The Department of Labor will soon issue rules that might clarify uncertainties caused by the legislation. Employers should seek legal advice if they are not sure of their obligations. Legal advice may also protect employers from liability when discharging or laying off employees who are eligible for a leave.

Emergency Paid Sick Leave Act (EPSLA)

Here are answers to the questions employers most commonly ask about EPSLA.

Am I a covered employer?

Employers that have fewer than 500 employees must comply with EPSLA. The Department of Labor has been authorized to create rules that exempt employers with fewer than 50 employees if complying with the law would jeopardize their ability to stay in business. How the Labor Department will define the criteria to exempt small employers is not yet known.

Which of my employees are covered?

All employees, whether full-time, part-time, or newly hired, are covered by EPSLA. However, the Department of Labor has been authorized to create a rule that exempts healthcare employees and first responders.

Which of my employees are eligible for a paid sick leave?

Employees are eligible for a leave if they are:

• seeking a diagnosis because they have COVID-19 symptoms;

• ordered by a physician to self-quarantine, either at home or in a healthcare facility;

• staying at home to comply with a government’s quarantine or isolation order;

• caring for a person who is complying with a physician’s self-quarantine order or a government quarantine; or

• caring for the employee’s child because of a school closing or the unavailability of a childcare provider due to COVID-19 precautions.

Some Florida municipalities have issued “stay at home” orders (sometimes called “shelter in place” or “lockdown” orders). Whether those orders trigger eligibility for an EPSLA leave is not yet clear.

“Quarantine” has a specific definition under state law that might not cover a generalized “stay at home” order. In fact, the degree to which a local government’s “stay at home” order is enforceable is uncertain.

Whether EPSLA was intended to protect workers who are told to stay at home by a local government, or only those who are individually quarantined or told to stay home by a physician, is a question that the Labor Department rules will hopefully address.

The Secretary of Health and Human Services has the authority to expand the list of qualifying events that make an employee eligible for a leave, but HHS has not yet announced an intent to add to the list.

How much EPSLA leave must I provide?

Full-time employees are entitled to a maximum of 80 hours of paid leave. If they no longer qualify for the leave before they use the entire 80 hours (for example, if a diagnosis determines that they are not infected and do not need to self-quarantine), the right to take a paid leave ends when qualification for leave ends.

Part-time employees are entitled to two weeks of paid leave (or less if they are no longer qualified for a leave before the end of the two-week period). Their hours of paid leave are based on the hours that they were scheduled to work but missed because of a qualifying event. If that schedule cannot be determined with certainty, part-time employees are entitled to a paid leave for the average number of hours they worked in two weeks over the past six months.

What am I required to pay employees who take an EPSLA leave?

The pay rate for an EPSLA leave depends on the reason for which it was taken. If an employee takes a leave for diagnosis or treatment of the employee’s COVID-19 symptoms, or to comply with a quarantine or physician-imposed self-quarantine of the employee, the employer must pay for EPSLA leave at the employee’s regular rate of pay. However, that payment need not exceed $511 per day or a total of $5,110.

If an employee takes a leave to care for a quarantined or self-quarantined person or because the employee needs to care for a child because of school closings or an unavailable childcare provider, the employer must pay for EPSLA leave at two-thirds of the employee’s regular rate of pay. That payment need not exceed $200 per day or a total of $2,000.

An employer’s obligation to pay sick leave wages ends on December 31, 2020. Any leave days not taken by that date do not carry over into 2021.

Can I require employees to give notice of their need for a leave?

Employees can take the first day of an EPSLA leave without notifying their employer of their need for a leave. Employers can require employees to give notice of their need for a continuing leave.

At this point, however, the Department of Labor has not created rules governing notice, so the kind of notice that an employer can require is not yet clear. Employers who are concerned that an employee did not provide notice of the need for a continuing leave should ask for legal advice before withholding pay or taking any action against the employee.

Can I require an employee to substitute other paid leave for an EPSLA leave?

No. An EPSLA leave is in addition to any other paid leave, including sick leave or paid vacation, that an employer offers.

Also, employers may not change their benefit policies by eliminating paid sick leave to assure that employees who are eligible for an EPSLA leave do not also take a sick leave.

Can I require an employee to arrange for shift coverage before taking an EPSLA leave?

No. The law prohibits employers from conditioning an EPSLA leave on an employee’s ability to find a replacement employee to cover the employee’s shifts.

What am I required to do when an EPSLA leave ends?

Under most circumstances, an employer must return an employee to his or her former position at the same rate of pay when the leave ends. Employers are not allowed to eliminate positions to avoid returning an employee to work because that employee took an EPSLA leave.

What can happen if I violate EPSLA?

An employer that fails to provide the required sick leave pay can face the same federal penalties as an employer that fails to pay minimum wage. Those penalties generally include an award of unpaid wages that were wrongly withheld and an equal amount as punishment for the violation.

An employer that retaliates against an employee for exercising EPSLA rights faces additional penalties. Those rights include the right to ask for and take an EPSLA leave, to be reinstated when the leave ends, and to bring or participate in legal proceedings for EPSLA violation.

Retaliation consists of terminating employment, failing to reinstate an employee, or taking any other action that would make a reasonable employee reluctant to exercise EPSLA rights. Potential penalties for retaliation include an award of unpaid wages that were wrongly withheld, reinstatement (or an award of lost future pay), an amount equal to lost pay, and compensation for the employee’s damages, including emotional distress.

An employee who prevails on a claim for an EPSLA violation can also recover his or her reasonable attorney’s fees. Close adherence to the law can therefore help employers avoid costly mistakes.

Will I be reimbursed for sick pay that I provide to my employees?

Yes. Reimbursement comes in the form of a tax credit against quarterly federal payroll taxes. Paid leave required by EPSLA is not considered a wage payment and is therefore not subject to payroll withholding requirements or to the employer’s contribution to FICA taxes.

Is there anything else I must do to comply with the law?

All covered employers must display an approved poster describing the EPSLA and the EFMLEA. The poster can be downloaded from the Department of Labor website.

Emergency Family and Medical Leave Expansion Act (EFMLEA)

While there are still some uncertainties about the new paid childcare leave law, these are the answers to the most common questions that employers ask about EFMLEA.

Am I covered by EFMLEA?

Like ESPLA, employers are covered if they have fewer than 500 employers. And like ESPLA, the Department of Labor is authorized to enact rules that will exempt businesses with fewer than 50 employees if complying with EFMLEA will endanger the survival of the business.

Which employees are eligible for an EFMLEA leave?

Employees become eligible after they have been employed for 30 days. It is safe to assume that a new employee can give notice of the need for an EFMLEA leave in advance and begin taking it after 30 days of employment.

An employer of healthcare providers or first responders may elect to exclude those employees from the required paid childcare benefit. The employees who may be deemed “healthcare providers” have not yet been defined.

For what reasons can an employee take an EFMLEA leave?

An employee can take an EFMLEA leave if the employee cannot work (or telework) because the employee needs a leave to care for the employee’s minor child if, because of the COVID-19 emergency:

• the child’s school or place of care has been closed, or

• the child’s childcare provider is unavailable.

For the purpose of EFMLEA (but not EPSLA), a “childcare provider” is a person who regularly provides childcare for compensation.

How long can the leave last?

An EFMLEA leave can last for as long as the school closing or unavailable childcare continues, but not more than 12 weeks.

Can I require the leave to be taken all at once or can an employee take it intermittently?

The EFMLEA does not answer that question. Based on rules governing a leave for a serious health condition under the Family and Medical Leave Act, it is likely that an employee can take the leave as needed, and need not take it all at once. The Department of Labor may issue rules that clarify whether an EFMLEA leave can be taken intermittently.

Must I pay the employee during an EFMLEA leave?

Yes, subject to the limits that were enacted in the EFMLEA. An employer can pay full wages voluntarily, but need not pay more than the law requires.

What payment must I make to employees who take an EFMLEA leave?

The first 10 days of an EFMLEA leave are unpaid. Employers must allow employees to substitute any available paid leave, including EPSLA leave, for the unpaid days. Employers cannot cancel paid leave benefits, such as paid vacation, to prevent employees from substituting other paid leave for the unpaid portion of an EFMLEA leave.

The remaining days of an EFMLEA leave must be paid at two-thirds of the employee’s regular rate for each day that the employee would normally have been scheduled to work. A full-time employee who takes a full 12 weeks of leave would therefore receive EFMLEA pay at two-thirds of the employee’s regular rate for 50 hours of work.

An employee who works a varying schedule should be paid for the hours the employee would have worked if the employee had not taken a leave. If the employer cannot determine those hours with certainty, the employer should base the payment on the average number of hours that the employee was scheduled to work each day (without deduction for any leave taken) during the preceding six months.

If the employee did not work during the previous six months, pay should be based on the number of hours the employee reasonably expected to work at the time of hiring.

The EFMLEA expires at the end of 2020. Benefits do not carry over to 2021. If an employee quits before all leave is taken, the employer has no obligation to pay for any nonworking days after the date on which the employee quits, even if the employee would otherwise be eligible to take more paid days of EFMLEA leave.

Can I ask employees to give me notice of their intent to take a leave?

Employees can be asked to give as much notice as it is practical to give, but only to the extent that the need to take a leave is foreseeable. Since it will not usually be practical to give advance notice of the need to take a leave in an emergency (such as learning that a daycare provider has become unavailable), an employer may be risking liability by denying a leave based on insufficient notice.

Am I required to return employees to their former jobs after an EFMLEA leave ends?

As a general rule, covered employees must return employees to their jobs with the same hours and pay that were in effect before the leave began, or to an equivalent position with equivalent pay, benefits, and other conditions of employment.

Some courts interpret the FMLA to impose no obligation on employers to restore employees to a position when the position was eliminated during the employee’s leave for legitimate business reasons. The EFMLEA expressly addresses that situation, but only permits employers of 25 or fewer employees to deny reinstatement to an employee if the position was eliminated, and then only under these circumstances:

• the position was eliminated due to economic circumstances caused by the COVID-19 emergency;

• the employer first makes reasonable efforts to restore the employee to an equivalent position; and

• if no equivalent position is immediately available, the employer makes reasonable efforts to notify the employee of an equivalent position that becomes available within one year after the employee’s leave commences, or one year after the circumstances that created the need for the leave end, whichever is earlier.

That provision effectively imposes an obligation on employers to fill new positions with employees who occupied positions that were eliminated while they were taking an EFMLEA leave, if the new positions are reasonably equivalent to the eliminated positions.

Since Congress limited this special provision to employers with fewer than 25 employees, it would be logical to conclude that employers with more than 25 employees must restore employees to their former positions or to an equivalent position, regardless of whether the employer has eliminated positions due to economic necessity. Future court decisions or Department of Labor rules may clarify the obligations of employers under those circumstances.

It is clear, however, that employers may not eliminate a position for the purpose of discharging an employee because the employee took an EFMLEA leave. Eliminating a position under those circumstances would be an act of retaliation that the EFMLEA prohibits.

Can I fire an employee who takes an EFMLEA leave?

The EFMLEA prohibits retaliation against employees because they exercised rights provided by the EFMLEA, including rights that exist under the Family and Medical Leave Act. Those rights include asking for a leave, taking a leave, complaining about the decision to deny a leave, and making a claim in court because of the denial of leave rights.

Retaliation includes terminating employment, demoting an employee, reducing an employee’s pay or benefits, or taking any other action against an employee that would tend to discourage other employees from exercising their rights under the EFMLEA. An act of retaliation does not necessarily have to result in an economic loss.

What penalties do I face if I violate the EFMLEA?

Failing to provide a paid leave when one is required can subject an employer to an award of back pay. Unless the employer acted in good faith, the award will usually be doubled to penalize the violation. Violations are not usually deemed to be in good faith.

Employees can also recover expenses they incurred as the result of a failure to grant a required leave.

Retaliation or the failure to restore an employee to a former position can subject an employee to an award of back pay, reinstatement (or an award of lost future pay), compensatory damages (including incurred expenses and compensation for emotional distress), and a penalty that is equal to the award of back and future pay.

When an employee prevails in a claim for an EFMLEA violation, the employee is also entitled to costs, including an award of reasonable attorney’s fees. Since violating the EFMLEA can expose an employer to expensive remedies, employers should seek legal advice before they deny a leave, eliminate an eligible employee’s position, or fire an employee who took or requested a paid leave.

Will I be reimbursed for paid childcare leave that I provide to my employees?

As is true of EPSLA, payments made to employees that are required by the EFMLEA can be claimed as a credit against quarterly payroll tax payments.

What else do I need to do to comply with EFMLEA?

The poster that explains ESPLA rights also covers EFMLEA rights. That poster must be displayed in a conspicuous place in the workplace.

If you are a business owner and you are not sure about how to proceed under these new laws, you should consult with a local employment attorney. Robert S. Norell, P.A. is here to help you.