Resource center

UPDATED March 20, 2020

The Coronavirus pandemic is an unprecedented world-wide crisis. Eve nts are happening very quickly and the response by Federal, State and local governmental officials is evolvingrapidly. It is our goal to provide current and relevant information in a format that is (hopefully) easy to understand to help you make informed decisions that are in the best interest of your business and your employees. However, due to the rapidly changing nature of the crisis and the resultant response, it is impossible to provide real time information in usable form. This is the latest information available as of the date of this update.

Families First Coronavirus Response Act:

• Enacted into law on March 18, 2020
• Effective April 2, 2020-December 31, 2020
• Applies to employers with fewer than 500 employees
• Two paid leave provisions1.
  • Emergency Paid Sick Leave Act2.
  • Emergency FMLA Expansion Act:
• A business with fewer than 50 employees may be exempt if the provisions “would jeopardizet he viability of the business as a going concern.”
  • The Department of Labor has yet to issue regulations on this exemption, so it is unclear how this exemption will be applied, but expect that it will be very narrow.

Emergency Paid Sick Leave Act:

• Which employees qualify for paid sick leave under the Act?
  • The following are entitled to employer paid sick leave, an employee:
    • subject to a Federal, State, or local quarantine or isolation order related to COVID–19;
    • that has been advised by a health care provider to self-quarantine due to concerns related to COVID–19;
    • experiencing symptoms of COVID–19 and is seeking a medical diagnosis;
    • caring for an individual who is subject to an order as described in category no.1 or has been advised as described in category no. (2);
    • Сaring for a son or daughter, if the school or place of care of the son or daughter has been closed, or the child-care provider of such son or daughter is unavailable, due to COVID–19 precautions; and/or
    • 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.
• What are the key provisions under this part of the Act?
  • Employer paid sick time is available for immediate use no matter how long the employee has been employed by employer
  • The employee is entitled to take up to the following hours of leave:
    • Full time employees – 80 hours
    • Part time employees – the number of hours that employee works on average over a 2-week period
  • The employee’s sick leave pay is based on his/her rate of pay:
    • If the leave is for the employee’s own medical condition, it is paid at a rate of 100% of the employee’s regular rate, subject to a cap of $511/day or $5,110 total.
    • If the leave is for the employee to act as a caregiver, it is paid at 2/3 the employee’s regular rate or minimum wage, whichever is greater, subject to a cap of $200/day or $2,000 total.
  • If the employee is unable to work, remotely or otherwise, because of one of the qualifying circumstances listed above, the employer must provide sick leave pay.
  • The employer cannot require the employee to first use other paid leave.
  • If the employee does not need the emergency paid sick leave, it does not accrue into the next year.

Emergency FMLA Expansion Act:

• Which employees qualify for the expanded FMLA leave under the Act?
  • NOTE: This provision of the Act was narrowed significantly from the original version of the bill.
  • An employee may take FMLA leave if the employee is unable to work (or telework) due to a need for leave to care for the son or daughter under 18 years of age of such employee if the school or place of care has been closed, or the child care provider of such son or daughter is unavailable, due to a public health emergency.
    • The term “public health emergency” means an emergency with respect to COVID–19 declared by a Federal, State, or local authority.
• What are the key provisions under this part of the Act:
  • An employee qualifies for this Emergency FMLA if he/she has been employed for 30 calendar days.
  • The first ten days of FMLA leave may be unpaid, subject to the following:
    • The employee may elect to use their employer paid sick leave under the Emergency Paid Sick Leave Act; or
    • The employee may elect to use their accrued, unused paid time off under any existing company policy.
  • The next 10 weeks must be paid at 2/3 of the employee’s regular rate of pay, but the pay is capped at $200/day and $10,000 total.
  • If a business has fewer than 25 employees, the employer does not have to reinstate the employee if:
    • The employee takes the Public Health Emergency Leave;
    • The position held by the employee when the leave commenced does not exist due to economic conditions or other changes in operating conditions of the employer—
      • that affect employment; and
      • are caused by a public health emergency during the period of leave;
    • The employer makes reasonable efforts to restore the employee to a position equivalent to the position the employee held when the leave commenced, with equivalent employment benefits, pay, and other terms and conditions of employment; and
    • If the reasonable efforts of the employer under subparagraph (C) fail, the employer makes reasonable efforts to contact the employee if an equivalent position becomes available.

Employee Medical Inquiries and Examinations:

• Can an employer require employees to undergo a temperature check?
  • Yes. The EEOC has advised, based on CDC guidance, that COVID-19 poses a direct threat in the workplace, and it is permissible for the employer to perform temperature checks—and send employees home that are running a fever. Employers should monitor State and local authorities to determine when a direct threat no longer exists.
• Can an employer send an employee home who is displaying influenza symptoms?
  • Yes. The EEOC, following CDC guidance, advises employers to do so.
• Can an employer ask employees if they have influenza symptoms?
  • Yes. But the employer must maintain the employee’s illness as a confidential medical record.
• Can an employer ask employees if they have traveled to locations that the CDC or public health officials have advised not to travel?
  • Yes. And the employer may follow the CDC advice regarding when the employee is safe to return to work.

Furloughs versus Layoffs:

• What is furlough and how do they operate?
  • Furloughs are mandatory suspensions from work without pay. Furloughs are temporary, by nature, and can last for as long or as short as necessary.
    • For employees who are not exempt from overtime laws (ex. hourly employees and employees who do not fall into one or more overtime exemption), furloughs can be by the day. For example, you may reduce a worker to working one or two days in a week and only pay them for the hours worked.
      • Note that a reduction in hours may result in the employees’ entitlement to unemployment benefits based on the reduced hours.
    • For employees that are exempt from overtime laws (employees who meet the salary and other requirements for one or more exemption), furloughs must be by the week. You may not reduce a salaried, exempt employee’s hours and pay them for a partial week.
      • Be very cautious with furloughs for salaried, exempt employees. If they work for even a few minutes, they are entitled for their salary for the entire week. Otherwise, you risk losing the exemption in the future. For similar reasons, we do not advise converting salaried, exempt employees over to hourly.
• What is the difference between furloughs and layoffs, if the furlough will require a complete suspension of all work?
  • The two operate very similarly under the present circumstances. Both methods mean that the employee will no longer be working and, therefore, will not earn any compensation. Accordingly, both methods entitle employees to unemployment benefits. Furloughs can be advantageous from the perspective that some health insurance benefits plans will permit the employee to be covered for a longer period(although, some plans will require employees to be active, so be sure to check with your plan provider for how a furlough will affect your employees’ benefits). Furloughs also provide employees with an expectation that their work will resumeand make for a more seamless transition back. On the other hand, furloughs often require more monitoring to ensure that employees are not working—even checking emails—otherwise you must pay the employee for the time worked (and for a salaried employee, that means the entire week) or risk a F air Labor Standards Act claim.
• Does the WARN Act require that I provide notice of an intent to do layoffs in light of COVID-19?
  • Unfortunately, the answer to this question is maybe. In general, the federal WARN Act requires employers with over 100 employees (not counting those who have worked less than six months in the last 12 months and those who work an average of less than 20 hours a week) to provide 60 days-notice of mass layoffs or a plant closing. However, the WARN Act has a few exemptions that could apply under the circumstances. If you are considering a layoff and believe the WARN Act might apply, it is important to seek legal counsel beforehand.
    • Note that the following states have adopted their own “mini-WARN” acts: California, Connecticut, DC, Georgia, Hawaii, Illinois, Iowa, Maine, New Hampshire, New Jersey, New York, Tennessee, Vermont, and Wisconsin.

Employer Options to fund paid medical leave required by the Families First Coronavirus Response Act:

• How can an employer afford to provide the required paid leave to employees?
  • The Act has provided a dollar-for-dollar tax credit to be administered on a quarterly basis in connection with the payment of payroll taxes;
  • If the employer does not have the cash flow to make the payments up front, employers may apply for a Small Business Administration Disaster Loan;
  • If providing paid sick leave will “ jeopardize the viability of the business,” and the employer has fewer than 50 employees, the employer may be able to receive anexemption. We are closely monitoring the Department of Labor website and will give more information on how to claim the exemption once such information is made available.

Useful links:

Texas Division of Emergency Management- Economic Injury Disaster Loans

Texas Workforce Commission- COVID-19 Resources for Employers

CDC- Resources for Businesses and Employers

Department of Labor- Coronavirus Resources

These materials are made available by Stibbs & Co., P.C. for informational purposes only, do not constitute legal or medical advice, and are not a substitute for legal advice from qualified counsel. The laws of other states and nations may be entirely different from what is described. Your use of these materials does not create an attorney-client relationship between you andStibbs & Co., P.C. The facts and results of each case will vary, and no particular result can be guaranteed.