California employers will have many questions concerning their employment obligations including their ability to maintain and pay current staffing levels in light of Governor Newsom’s March 19, 2020 Executive Order N-33-20 requiring most Californians to stay at home due to the COVID-19 virus. BPH’s Employment Practice Group is ready and available to answer your questions.

IS MY BUSINESS SUBJECT TO THE MANDATORY STAY-AT-HOME ORDER AND CAN OUR EMPLOYEES WORK ON SITE?

The federal government and California have identified essential services which are not subject to Governor Newsom’s Executive Order. These essential services are primarily industries which are key to maintaining the country’s economic integrity and infrastructure. The most current list of essential services that are not subject to the Governor’s Executive Order can be found at the included link.

https://covid19.ca.gov/img/EssentialCriticalInfrastructureWorkers.pdf

If you have any concerns regarding your business’ ability to operate at its regular business premises in light of the March 19, 2020 Executive Order, please feel free to contact us.

WHAT ARE MY BUSINESS’ OBLIGATIONS UNDER THE NEW FEDERAL FAMILIES FIRST CORONAVIRUS RESPONSE ACT?

Congress and the President enacted Families First Coronavirus Response Act (“The Act”) on March 18, 2020 to address the immediate concerns facing America’s workers. Below is a summary of the key points of The Act which takes effect on April 2, 2020. The Act applies to employers with 500 or less employees and basically has two key components: 1) Employers are obligated to pay 80 hours of paid sick leave and 2) 12 weeks of partially paid Family Medical Leave Act (FMLA) leave to employees under certain circumstances. Employers under 50 employees may be subject to an exemption for these requirements if paying the sick leave and FMLA leave “would jeopardize the viability of the business as a going concern”. The employer has the obligation to seek an exemption from the federal government.

PAID SICK LEAVE

The 80 hours of paid sick leave takes place under the following circumstances for
those employees who cannot work or telework:

1. The employee is subject to a federal, state, or local quarantine or isolation order related to COVID-19;
2. The employee is advised by a health care provider to self-quarantine due to COVID-19 concerns;
3. Experiencing COVID-19 symptoms and seeking medical diagnosis;
4. The employee is caring for an individual who is subject to an order as described in subparagraph (1) or has been advised as described in paragraph (2);
5. The employee is caring for a son or daughter of such employee if the school or place of care of the son or daughter has been closed, or the childcare provider of such son or daughter is unavailable, due to COVID–19 precautions; and
6. The employee is experiencing any other substantially similar condition specified by the Secretary of Health and Human Services in consultation with the Secretary of the Treasury and the Secretary of Labor.

For employees falling into one of the above criteria, then you must pay sick time hours at the employee’s regular rate. The amount of pay is capped at $511 per day up to $5,110 total per employee. 100% tax credits are available for employers who pay employees emergency paid sick leave. The tax credit only applies to payments made as required under this law. So, if an employer chooses to pay an amount that goes above and beyond the caps provided by law, there is no tax credit for that extra amount. If an employer is not subject to this law but chooses to offer the benefits, there is no available tax credit. Governor Newsom’s March 19, 2020 stay-at home order may constitute an “isolation order” under The Act. Thus, California employees who currently cannot work or telework due to the Order may qualify for the benefit after April 2, 2020. The federal government is expected to release more information in this regard in the coming days. Employees cannot be forced to take their paid leave (i.e. accrued vacation pay) prior to requesting the paid sick leave.

TWELVE WEEKS FMLA LEAVE

The 12 weeks FMLA leave only comes into play if the employee must care for their child if the child’s school or place of care is closed or the child’s care provider is unavailable due to public health emergency and the employee is unable to work or
telework. FMLA leave consists of 10 days unpaid leave and then the remainder leave period is paid at 2/3’s of the employee’s normal rate of pay, but the employee can take the 80 hours of paid sick leave during the first 10 days, if eligible.

After the FMLA period, employers with 25 or more employees are required to return the employee to the same or equivalent position upon their return to work. Employers with fewer than 25 employees are required to return the employee to the same or equivalent position upon the return to work, UNLESS: 1) The employee’s position no longer exists due to an economic downtown or other circumstances caused by a public health emergency during the period of Emergency FMLA and 2) The employer has made reasonable attempts to return the employee to an equivalent position. The employer must make efforts to return the employee to work for up to a year following the employee’s leave.

100% tax credits are available for employers who pay employees emergency FMLA leave. The tax credit only applies to payments made as required under this law. So, if an employer chooses to pay an amount that goes above and beyond the caps provided by law, there’s no tax credit for that extra amount. If an employer is not subject to this law but chooses to offer the benefits, there is no available tax credit.

EMPLOYER IS OBLIGATED TO PROVIDE & POST NOTICE OF THE ACT

The employer is obligated to post a conspicuous notice regarding the Act at its place of business or should provide notice to its employees via email if they are working remotely. The notice will be available on March 25, 2020. The notice will be available at the included link.

https://www.dol.gov/agencies/whd/pandemic/ffcra-employer-paid-leave#_ftnref7

WHAT IF MY BUSINESS FAILS TO COMPLY WITH THE ACT?

The Act states that it is unlawful for an employer to take any adverse action (i.e. discharge, discipline, discriminate) against any employee who takes paid sick leave or who is involved in a complaint related to this law. As always, your questions as an employer, human resource or risk manager, or adjuster may vary from the summary provided above and we strongly encourage you contact us or competent counsel before making any decisions in regard to the Act. During this critical time, BPH’s attorneys can be reached via cellular phone and email to answer your questions.

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The information provided above does not, and is not intended to, constitute legal advice; instead, all information, content, and materials are for general informational purposes only. Readers should contact their attorney to obtain advice with respect to any particular legal matter. Use of, and access to, this information does not create an attorney-client relationship.