Employco Blog

BULLETIN
March 25, 2020 (UPDATE)

On Tuesday, March 24th, the Department of Labor released additional guidance related to the Families First Coronavirus Response Act (Act) and other COVID-19 related employment issues. Here is a summary of the key updates:

Has anything significant changed since the original release of the Act?

• The effective date has been changed to April 1, 2020 (it was originally presumed to be April 2nd).

Can you remind me what the Act covers?

• The most significant provisions include pay and job protections for an employee’s qualified leave of absence if the person is actively employed by a company with less than 500 employees and the employee is unable to work (or telework) for a reason related to COVID-19.

• • Two weeks (up to 80 hours) of expanded family and medical leave at (100% of) the employee’s regular rate of pay where the employee is unable to work because the employee is quarantined (pursuant to Federal, State, or local government order or advice of a health care provider), and/or experiencing COVID-19 symptoms and seeking a medical diagnosis (maximum of $511 per day, or $5,110 total over the entire paid sick leave period); or

• • Two weeks (up to 80 hours) of expanded family and medical leave at two-thirds the employee’s regular rate of pay because the employee is unable to work because of a bona fide need to care for an individual subject to quarantine (pursuant to Federal, State, or local government order or advice of a health care provider), or to care for a child (under 18 years of age) whose school or child care provider is closed or unavailable for reasons related to COVID-19, and/or the employee is experiencing a substantially similar condition as specified by the Secretary of Health and Human Services, in consultation with the Secretaries of the Treasury and Labor (maximum of $200 per day, or $2,000 over the entire two week period); and

• • Up to an additional 10 weeks of expanded family and medical leave at two-thirds the employee’s regular rate of pay where an employee, who has been employed for at least 30 calendar days, is unable to work due to a bona fide need for leave to care for a child whose school or child care provider is closed or unavailable for reasons related to COVID-19 (maximum of $200 per day or $12,000 for the twelve weeks that include both paid sick leave and expanded family and medical leave).

• • Under the above scenarios, employers would be eligible for a tax credit against the employer portion of social security taxes not to exceed the specified limitations.

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BULLETIN
March 23, 2020 (UPDATE)

With the continuously changing employment and legal landscape, the following FAQs provide updated information to help employers work through the complex COVID-19 crisis:

What is the latest information from the federal government related to employees’ pay and leaves of absence?

• On Wednesday, March 18, the President signed the Families First Coronavirus Response Act (the “Act”) into law. A summary of the Act can be found by clicking the following link to read our bulletin. The Department of Labor (DOL) is expected to release additional details on the Act on or before the April 2nd effective date.

What happens to our employees if they cannot work because we’re in an area that is subject to a state/local “stay-at-home” order (e.g., CA, IL, NY, etc)?

• It’s possible that, under the Families First Coronavirus Response Act, employees could be eligible for 2 weeks of paid sick leave (paid by the employer) under the provision: “subject to a federal, state or local quarantine or isolation order related to COVID-19.” If the upcoming DOL guidance reveals that “stay-at-home” orders do not trigger the paid leave, employees may be able to use the regular employer provided time off benefits such as vacation, sick, PTO, to continue pay in the absence of company-provided wages. Employees who are subject to layoffs, furloughs or reductions-in-hours can apply for unemployment benefits through their state.

Can you provide more information about the Illinois stay-at-home order?

• Effective on March 21st, Illinois residents are required to stay at home at least until April 7, unless they are engaging in certain essential activities or operating an “Essential Business or Operation.” The executive order names 27 broad categories of essential functions and businesses, which partially includes:
  • Healthcare and Public Health Operations;
  • Human Services Operations;
  • Essential Infrastructure;
  • Essential Governmental Functions;
  • Other Types of Essential Businesses and Operations

• Click the following link to view Governor Pritzker’s executive order and the full list of covered businesses (paragraphs 7 through 12). Click the following link to the view the executive order’s Frequently Asked Questions. If your company’s operations are not essential, ensure that your business is safe and that your employees have a phone and/or email address of someone to contact in the event they have a question or need to report a COVID-19 diagnosis.

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BULLETIN
March 19, 2020 (UPDATE)

On March 18th, the Senate passed the Families First Coronavirus Response Act and the President signed it into law.

This bulletin summarizes the significant provisions of the Act which affect employers. The following provisions take effect on April 2, 2020.

Emergency Family and Medical Leave Expansion Act

• Companies are required to provide employees with up to 12 weeks of job-protected and paid leave:
  • Companies pay employees at 2/3 regular rate
  • Pay not to exceed $200 per day and $10,000 in aggregate per employee
  • The pay starts after first 10 days of leave
  • Only paid if employee is unable to work or telework in order to care for minor child if the child’s school is closed because of the public health emergency
• Applies to companies with less than 500 employees
  • Option to exclude companies with less than 50 employees if this action would jeopardize the continuation of their business
  • Companies with less than 25 employees may not be required to restore the employee back to same position after the 12 week leave has been exhausted
• Applies to employees with at least 30 days of service

Emergency Paid Sick Leave Act

• Companies are required to provide employees with paid sick leave:
  • Companies provide employees with 80 hours of paid leave based on the employee’s regular rate of pay
• Applies to companies with less than 500 employees
  • Option to exclude companies with less than 50 employees if this action would jeopardize the continuation of their business
• Applies to employees:
  1. subject to a federal, state or local quarantine or isolation order related to COVID-19;
  2. advised by a health care provider to self-quarantine due to COVID-19 concerns;
  3. experiencing COVID-19 symptoms and seeking medical diagnosis;
  4. caring for an individual subject to a federal, state or local quarantine or isolation order or advised by a health care provider to self-quarantine due to COVID-19 concerns;
  5. caring for the employee’s 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; or
  6. 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.
• Employers would be required to pay employees their full wages, not to exceed $511 per day and $5,110 in the aggregate, for a use described in (1), (2), or (3) above
• Employers would be required to pay employees 2/3 of their wages, not to exceed $200 per day and $2,000 in the aggregate, for a use described in (4), (5), or (6) above

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BULLETIN
March 18, 2020 (UPDATE)

As we continue through these uncertain times, many companies are dealing with the reality that lower revenue cannot support the current employment. As a result, employers are considering their options to lower payroll expense. We’ve created the following chart that summarizes the options and differences between Furlough and Layoff.

Outside of a furlough vs layoff decision, some employers are considering a company-wide reduction in pay (e.g., 20% pay cut for all employees). When reducing an employee’s pay or hours, ensure that you stay compliant in areas such as minimum wage, exempt/salaried employee pay threshold, and benefits eligibility.

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