Author Archives: Mary Gemeinhardt

FFCRA REGULATIONS – INTERPRETATION

By Daniel Finerty, Sally Piefer & Oyvind Wistrom

On Wednesday, April 1st, the Department of Labor (DOL) released its regulations applicable to the Families First Coronavirus Response Act (FFCRA). This E-Alert provides an explanation and comments regarding the interpretations and how each may apply in practice.

Please note that these are interim regulations, not the final regulations, and are subject to change. In fact, a group of Congressional members have sent a letter to the DOL criticizing some of the regulations and interpretive guidance DOL has already provided. Some of the issues addressed in that letter include:

  • Whether an employer can require any sort of certification of the need for leave from an employee;
  • Whether an eligible employee has a right to emergency paid leave if the company furloughs the employee or has to close due to a “safer at home” order
  • Use of intermittent leave
  • Definition of a “health care provider” for purposes of who can advise an employee to self-quarantine
  • Definition of a “health care provider” for purposes of who may be exempted from the leave provisions

We will continue to monitor these important issues. Should you have any specific questions that are not addressed, please contact your Lindner & Marsack attorney or the Firm at (414) 273-3910 to seek counsel.

General Definitions

“Average Regular Rate” is calculated using the same method that is used under the Fair Labor Standards Act (FLSA) and includes commissions, tips and piece rates received by the Employee.

“Child Care Provider” is defined to include both a provider who receives compensation for providing child care services on a regular basis, as well as a friend, neighbor or family member who regularly cares for the Employee’s child, even if not licensed or compensated.

“Eligible Employee” for purposes of the Expanded Family and Medical Leave (EFMLA or EFML) means an Employee who has been employed for at least 30 calendars days with the Employer.  There is no prior work requirement for employees to qualify for Paid Sick Leave under the Emergency Paid Sick Leave Act (EPSLA or EPSL).

“Employer” is clarified to include any private employer or individual with fewer than 500 employees, as well as any Public Agency employing at least one employee.  A “Public Agency” is further defined to include the Government of the United States, the government of a State or political subdivision thereof; any agency of the United States (including Postal Service), a State, or a political subdivision of the State; or any interstate governmental agency.

“School” is defined to include both elementary school and secondary schools, which is further defined as a nonprofit institutional day or residential school, including charter schools that provides instruction as determined under State law.  For-profit private elementary and secondary schools are excluded from the definition of a school.

“Son or daughter” is given the same meaning as under the FMLA, and includes a biological, adopted, foster child, stepchild, a legal ward, or child of a person standing in loco parentis, who is under age 18; or 18 years of age or older who is incapable of self-care because of mental or physical disability.

“Telework” means work the Employer permits or allows an Employee to perform while the Employee is at home or at a location other than the Employee’s normal workplace.  An Employee is able to Telework if: (a) his or her Employer has work for the Employee; (b) the Employer permits the Employee to work from the Employee’s location; and (c) there are no extenuating circumstances (such as serious COVID-19 symptoms) that prevent the Employee from performing that work.

Definition of Employer

Generally, according to the DOL draft regulations, the definition of employer tracks the textual language of the FFCRA, the FFCRA Questions and Answers and other DOL summaries and guidance.

A private employer (“employer”), includes, but is not limited to, any private entity or individual who employs fewer than 500 employees. Such employers must provide Paid Sick Leave and Expanded Family and Medical Leave.

Employee Count

In order to determine the number of employees employed, an employer must count all full-time and part-time employees employed within the United States at the time the employee would take leave. All part-time employees should be counted as if a full-time employee; in addition, the employer should count “any [e]mployees on leave of any kind,” such as those on existing leave under the FMLA, worker’s compensation leave or other leave. Further, for counting purposes, the number of employees includes all employees currently employed, regardless of how long those Employees have worked for the Employer. The question of eligibility for leave is separately dependent upon whether or not the employee has worked for the employer for at least 30 days.

For purposes of counting employees of temporary placement agencies, employers must count employees who are jointly employed under the FLSA, see 29 CFR Part 791, by the Employer and another Employer (regardless of which Employer’s payroll the Employee appears on) and day laborers supplied by a temporary placement agency (regardless of whether the Employer is the temporary placement agency or the client firm).

However, employer can exclude from their count workers who are independent contractors, assuming properly classified as such under the FLSA, and employees who have been laid off or furloughed and have not subsequently been reemployed.

Joint Employers

To reach the correct number of employees, all common employees of joint employers or all employees of integrated employers must be counted together. A corporation is considered a single employer, including its separate establishments or divisions, and all of its employees must be counted together. Further, where one corporation has an ownership interest in another corporation, the two corporations are separate employers unless they are joint employers under the FLSA test. See 29 CFR Part 791. This test was recently rolled back by the Trump Administration and is unfavorable to aggregation of employees. The guidance tends to indicate that a large corporate entity cannot aggregate employees of all subsidiaries and divisions for counting purposes.

Integrated Employers

However, two or more entities should generally be considered to be separate employers unless they meet the integrated employer test under the FMLA. 29 CFR 825.104(c)(2). If two entities are an integrated employer under this test, then employees of all entities making up the integrated employer must be counted under the FMLA’s comparatively less strenuous integrated employer test. A determination of whether or not separate entities are an integrated employer is not determined by the application of any single criterion, but rather the entire relationship is to be reviewed in its totality. 29 C.F.R. § 825.104(c)(2). Factors considered in determining whether two or more entities are an integrated employer include common management; interrelation between operations; centralized control of labor relations; and, degree of common ownership/financial control. 29 C.F.R. § 825.104(c)(2).

Employers with questions regarding this analysis should work with counsel to ensure a proper counting under both the FLSA and the FMLA during the grace period while ensuring that adequate preparations are made to ensure compliance with the FFCRA mandates as may be necessary.

Eligible Employees

According to the FFCRA, an “eligible employee” means an employee who has been employed for at least 30 calendar days by the employer; however, employers should note this applies only with regard to employees who request EFMLA. Those employees who have not been employed for that duration do not become eligible for EFMLA until after employed for 30 days. By contrast, all employees are eligible for EPSL regardless of when hired or re-hired by the employer.

The regulations further refine “eligible employee” to include:

  1. Any employee on an employer’s payroll for the 30 calendar days immediately prior to the day that the employee’s leave would begin;
  2. Any employee laid off or otherwise terminated by the Employer on or after March 1, 2020, and rehired or otherwise reemployed by the Employer on or before December 31, 2020, provided that the Employee had been on the Employer’s payroll for 30 or more of the 60 calendar days prior to the date the Employee was laid off or otherwise terminated.

If an employee employed by a temporary placement agency is subsequently hired by the employer, the employer must count the days worked as a temporary employee for the employer toward the 30-day period. Finally, an employee who has been employed by an employer for at least 30 days is eligible for EFMLA regardless of whether or not the employee meets or does not meet the traditional FMLA eligibility criteria.

Exemption from Coverage

The exemptions from the obligation to provide EFMLA and EPSL includes employers with fewer than 50 employees (“small business” or “small employer”), health care providers and emergency responders who may be excluded by their employer from the definition of “eligible employee,” among other governmental entities.

Small Business

DOL’s prior guidance on this issue caused frustration among small business. Small business found themselves having to make adequate preparation in the event the exemption was narrowly defined while also hoping the exemption would be more clearly and broadly defined.

However, the regulations provide a comparatively more clearly delineated exemption for small businesses with fewer than 50 employees. These small employers do not have to provide employees with paid sick leave and expanded family and medical leave to care for children whose school or place of care is closed, or child care provider is unavailable, when such leave would jeopardize the viability of the business as a going concern. This FFCRA language is put into context by the regulations.

Using the definition “ongoing concern assumption” (“concern”) from the American Institute of Certified Public Accountants (AICPA), the regulations note that the definition permits companies to use the concern to defer prepaid expenses until a future accounting period to allow the entity to continue in business for the foreseeable future without the intention nor the necessity to liquidate, cease trading, or seek protection from creditors pursuant to laws or regulations and remain a viable business for the foreseeable future. The concern standard considers conditions or events in the aggregate. To utilize this exemption, an authorized officer of the small business must determine that:

  1. The leave requested under either the EFMLA or the EPSLA would result in the small business’s expenses and financial obligations exceeding available business revenues and cause the small business to cease operating at a minimal capacity;
  2. The absence of an employee or the employees requesting leave under either the EFMLA or the EPSLA would entail a substantial risk to the financial health or operational capabilities of the business because of their specialized skills, knowledge of the business, or responsibilities; or
  3. There are not sufficient employees who are able, willing, and qualified, and who will be available at the time and place needed, to perform the labor or services provided by the Employee or Employees requesting leave under either the EFMLA or the EPSLA and these labor or services are needed for the small business to operate at a minimal capacity.

As such, it is recommended that, the small business conduct an analysis of the impact of the EFMLA, the EPSLA or both under each of the criteria set forth above.

The explanation of regulation provides that a small business, for reasons 1., 2., and 3. above, may deny EPLS or EFMLA only to those otherwise eligible employees whose absence would cause the small business a hardship provided it examines whether its expenses and financial obligations to exceed available business revenue, whether use of either the EFMLA or the EPSL pose a substantial risk, or would prevent the small employer from operating at minimum capacity.

Notably, while the explanation of this regulation uses the conjunctive “and,” and seems to indicate that all three conditions must be met, as noted above, the actual text of the regulation uses the disjunctive “or,” and, as a result, permits a small business to deny requests for either the EFMLA or the EPSL if such leave may impact any one of the three conditions outlined above.

There appears to be some suggestion by DOL that this analysis must be conducted when a request for leave either the EFMLA or the EPSL is received from an employee. This conclusion is supported by later indication that, regardless of whether a small business chooses to exempt “one or more employees,” the small business is still obligated to post both the required the EFMLA notice and the EPSL notice.

Accordingly, it is reasonable to assume that a small employer can conduct an initial analysis with regard to the application of the exemption and conduct a partial analysis each time a request is made by any employee deemed ineligible to provide an updated analysis.

Regardless, the regulation provides that a small employer must document the facts and circumstances that meet these criteria to justify such denial and maintain all such documents within its own files. As noted, because a small employer is not normally covered by the FMLA, its records do not need to be the type of formal records required by that law. However, the records should be sufficient to defend the small business if an employee files a complaint with the DOL contesting the small business’s decision to exempt its employees. The documentation may be reviewed by a DOL investigator during an investigation, but rather should retain such records for its own files. As a result, while a small business may create a form to analyze this issue in each instance, such examination likely should be conducted in order to fend off any subsequent DOL claims.

Health Care Providers and Emergency Responders

The regulatory language initially notes that “an [e]mployer whose [e]mployee is a health care provider or an emergency responder may exclude such [e]mployee from the EPSLA… and/or the EFML[]A’s… requirements.” Following up on the prior guidance provided by Questions and Answer Nos. 56-57, the regulations further clarify the extent of this exemption, which permits these employers to remove employees from the definition of “eligible employees.”

Health Care Providers

A health care provider that may be exempted from the EFMLA and/or EPSL obligations by their employer under the FFCRA is broadly defined to include “anyone employed at any doctor’s office, hospital, health care center, clinic, post-secondary educational institution offering health care instruction, medical school, local health department or agency, nursing facility, retirement facility, nursing home, home health care provider, any facility that performs laboratory or medical testing, pharmacy, or any similar institution, Employer, or entity” including “any permanent or temporary institution, facility, location, or site where medical services are provided that are similar to such institutions.”

In a more detailed fashion, the regulations note, as did Question and Answer Nos. 56-57, that the broadly-worded definition includes:

  1. Any individual employed by an entity that contracts with any of these institutions described above to provide services or to maintain the operation of the facility where that individual’s services support the operation of the facility;
  2. Anyone employed by any entity that provides medical services, produces medical products, or is otherwise involved in the making of COVID-19 related medical equipment, tests, drugs, vaccines, diagnostic vehicles, or treatments; and
  3. Any individual that the highest official of a State or territory, including the District of Columbia, determines is a health care provider necessary for that State’s or territory’s or the District of Columbia’s response to COVID-19.

Because the term “health care provider” is used elsewhere in the regulations, this definition applies only for the purpose of determining whether an employer may elect to exclude an employee. The other definition of “health care provider” is the traditional definition used within the FMLA and the EFMLA as those providers that can provider medical certification of the need for leave.

Emergency Responders

An emergency responder is anyone necessary for the provision of transport, care, healthcare, comfort and nutrition of such patients, or others needed for the response to COVID-19 including, but not expressly limited to, the following:

  1. Military or national guard, law enforcement officers, correctional institution personnel, fire fighters, emergency medical services personnel, physicians, nurses, public health personnel, emergency medical technicians, paramedics, emergency management personnel, 911 operators, child welfare workers and service providers, public works personnel; and,
  2. Persons with skills or training in operating specialized equipment or other skills needed to provide aid in a declared emergency; and,
  3. Individuals who work for such facilities employing these individuals and whose work is necessary to maintain the operation of the facility; and,
  4. Any individual whom the highest official of a State or territory, including the District of Columbia, determines is an emergency responder necessary for that State’s or territory’s or the District of Columbia’s response to COVID-19.

One cautionary note is that the Background section of the regulations explain, at page 65, that “although the rule exempts certain health care providers and emergency responders from the definition of eligible employee for purposes of the FFCRA, their employers may have some employees who do not meet this definition, so these employers may still be impacted by the provisions of the FFCRA.” However, as a result of the fact that the regulations do not further clarify which employees may not meet the broadly-worded definitions, this may be an area rife for future disputes.

Paid Leave entitlements under Emergency Paid Sick Leave (EPSL)

Under the EPSL, a covered Employer must provide to each of its Employees Paid Sick Leave to the extent that an Employee is unable to work (including telework) due to any of the following reasons:

(i) The Employee is subject to a Federal, State, or local quarantine or isolation order related to COVID-19;

(ii) The Employee has been advised by a health care provider to self-quarantine due to concerns related to COVID-19;

(iii) The Employee is experiencing symptoms of COVID-19 and seeking medical diagnosis from a health care provider;

(iv) The Employee is caring for an individual who is subject to an order as described in (i) or directed as described in (ii) of this subsection;

(v) The Employee is caring for his or her Son or Daughter whose School or Place of Care has been closed for a period of time, whether by order of a State or local official or authority or at the decision of the individual School or Place of Care, or the Child Care Provider of such Son or Daughter is unavailable, for reasons related to COVID-19; or

(vi) The Employee has a substantially similar condition as specified by the Secretary of Health and Human Services, in consultation with the Secretary of the Treasury and the Secretary of Labor. The substantially similar condition may be defined at any point during the Effective Period, April 1, 2020, to December 31, 2020.

Under subsection (i), an Employee is “subject to a Quarantine or Isolation Order” if he or she is subject to a quarantine, isolation, containment, shelter-in-place, or stay-at-home order issued by any Federal, State, or local government authority that caused the Employee to be unable to work even though his or her Employer has work that the Employee could perform, but for the order.  An employee may not take paid sick leave where the Employer does not have work for the Employee as a result of the order or other circumstances.

Under subsection (ii), an Employee is “advised by a health care provider to self-quarantine” where a health care provider (as defined under 29 CFR § 825.102 (1)) advises the Employee to self-quarantine (1) because (a) the Employee has COVID-19; (b) the Employee may have COVID-19; or (c) the Employee is particularly vulnerable to COVID-19; and (2) following the advice of the health care provider to self-quarantine prevents the Employee from being able to work or Telework.

Under subsection (iii), an Employee will be deemed to be “seeking medical diagnosis for COVID-19” where the Employee is experiencing symptoms of COVID-19 and he or she is seeking a medical diagnosis involving any of the following symptoms: (a) fever; (b) dry cough; (c) shortness of breath; or (d) any other COVID-19 symptoms identified by the U.S. Centers for Disease Control and Prevention.  Any Paid Sick Leave taken for this reason is limited to the time the Employee is unable to work because the Employee is taking affirmative steps to obtain a medical diagnosis, such as making, waiting for, or attending an appointment for a test for COVID-19.

Under subsection (iv), “caring for an individual” means caring for an Employee’s immediate family member, a person who regularly resides in the Employee’s home, or a similar person with whom the Employee has a relationship that creates an expectation that the Employee would care for the person if he or she were quarantined or self-quarantined.  This does not include persons with whom the Employee has no personal relationship.  In order for an Employee to qualify under this subsection, the “individual” for whom they are caring must be (1) subject to a quarantine or isolation order; or (2) has been self-quarantined by a health care provider because (a) the individual has COVID-19; (b) the individual may have COVID-19 due to known exposure or symptoms; or (c) the individual is particularly vulnerable to COVID-19.  An Employee caring for an individual may not take Paid Sick Leave where the Employer does not have work available for the Employee.

Under subsection (v), an Employee is entitled to paid sick leave to care for a son or daughter whose school or Place of Care has closed, or whose Child Care Provider is unavailable, for reasons related to COVID-19, only if no there is no other suitable person to care for the Son or Daughter during the period of the leave.  This provision would seem to indicate that two parents cannot simultaneously take paid sick leave to care for the same child.  An Employee caring for his Son or Daughter may not take Paid Sick Leave where the Employer does not have work for the Employee.

Emergency Family and Medical Leave (EFMLA)

Similarly, under the EFMLA, an eligible Employee may take emergency leave where the Employee is unable to work due to a need to care for his or her Son or Daughter whose School or Place of Care has been closed, or whose Child Care Provider is unavailable, for reasons related to COVID-19.  An Eligible Employee has the need to take EFMLA for this purpose only if no other suitable person is available to care for his or her Son or Daughter during the period of such leave.  An Employee caring for his Son or Daughter may not take Paid Sick Leave where the Employer does not have work available for the Employee.

Amount of Paid Sick Leave

A full-time Employee who is scheduled to work at least 40 hours per week is entitled to up to 80 hours of EPLS.  An Employee is still considered a full-time Employee if he or she does not have a normal weekly schedule, but the Employee averages at least 40 hours per week during the six-month period preceding the leave.

A part-time Employee is entitled to take EPSL equal to the number of hours that the Employee is typically scheduled to work over two workweeks.  If the Employee does not have a normal weekly schedule, and the Employee has worked for at least six months, he or she is entitled to EPSL equal to 14 times the average number of hours the Employee was scheduled to work each calendar day during that six-month period.  If the Employee has worked less than six months, then the leave amount is equal to 14 times the average number of hours that the Employer and Employee agreed the Employee would work, on average, each calendar day.  If there is no agreement, then leave entitlement is equal to 14 times the average number of hours that the Employee worked each calendar day, over the entire period of employment.  Hours that a part-time Employee took leave from the employer is also counted in these calculations.

Amount of Expanded Family and Medical Leave

An Eligible Employee is entitled to take up to 12 workweeks of EFMLA between April 1, 2020 and December 31, 2020.  Any leave taken under the EFMLA counts toward the total 12-week entitlement that the Employee would be entitled to take under the standard FMLA.  Additionally, an Eligible Employee may elect, and the Employee may require an Eligible Employee, to substitute any accrued paid vacation leave, personal leave, or paid time off to cover a portion of the Employee’s salary during the first two weeks of EFMLA.  If an Eligible Employee is also eligible to take EPSL leave during those two weeks. There appears to be a conflict between the regulations and the DOL’s Q&A’s on whether an Employer can force substitution of paid leave.

Employee Notice of Need for Leave

The DOL encourages employees to notify an employer of their need for EFMLA or EPSL as soon as practicable.  If an employee fails to give proper notice, an employer should notify the employee and allow the employee an opportunity to provide required documentation before denying the leave.  Employers may require employees to follow their reasonable notice procedures after the first workday the employee takes EPSL.  Whether an employer’s notice procedure is reasonable will be determined on a case-by-case basis.

Notice may not be required in advance – and may only be required after the first workday that an employee takes EPSL or EFMLA.  Notice may be given by an employee’s spokesperson (e.g. spouse) if the employee is unable to do so personally.

Documentation of Need for Leave 

An employer may only require documentation which includes: (i) the employee’s name; (ii) dates for which leave is requested; (iii) qualifying reason for the leave; and (iv) oral or written statement that the employee is unable to work because of the qualifying reason.

In addition, an employer can require certain additional information related to EPSL:

  • If the employee is taking leave because s/he has been issued a quarantine/isolation order, the employee must provide the name of the governmental entity that issued the order.
  • If the employee needs leave due to being advised to self-quarantine, the employee must provide the name of the health care provider who advised the employee to self-quarantine.
  • If the employee needs leave to care for another who has been issued a quarantine/isolation order or who has been advised to self-quarantine, the employee must provide the name of the person being cared for, their relationship to the employee and either (i) the name of the governmental entity that issued the order or (ii) the name of the health care provider who advised the employee to self-quarantine.
  • If the employee is taking leave because a school or place of care is closed or provider is unavailable, the employee must provide (i) the name of the child/ren being cared for; (ii) the name of the school/child care that has closed or the name of the provider who is unavailable and (iii) a representation that no other suitable person will be caring for the child/ren during the period the employee is taking EPSL or EFML.

Finally, an employer can request an employee to provide additional material needed for the employer to request the tax credits, and an employer need not provide leave if materials sufficient to support the tax credits are not provided. Additional information on this point is noted below.

Intermittent Leave

Employees are permitted to take intermittent leave for EFML and for some EPSL provisions in any increment of time acceptable to the employer.  Intermittent leave is not permitted, however, for leave taken where (i) the employee is subject to a quarantine or isolation order, (ii) the employee has been advised to self-quarantine by a health care provider, (iii) the employee is experiencing COVID-19 symptoms and is seeking a medical diagnosis or (iv) the employee is caring for an individual who is subject to a quarantine/isolation order or has been advised to self-quarantine by a health care provider.

An intermittent arrangement must clearly be understood by the parties.  We agree with the DOL’s recommendation that the intermittent arrangement should be reduced to writing.

If an employee is allowed or directed to Telework, the employee can use EFML or EPSL when the employee is unable to Telework because of a COVID-19-related reason.  The regulations clarify that if leave is permitted intermittently, only the amount of leave actually taken by the employee will count toward his/her leave entitlement.  For example, if an Employee needs only 4 hours of EFMLA each day because s/he can Telework 4 hours, then the Employee will only have taken 20 hours of EFMLA during that week. 

Interplay between EFMLA and EPSL

The regulations also clarify that if an Employee needs leave because a child’s school or place of care is closed, or where the provider is unavailable, the Employee is allowed to take both EPSL and EFMLA, and the benefits run concurrently.  For example, if Susan needs leave to care for her children because her daycare facility is closed, and if she has not already used her EPSL, she is allowed to use the 2 weeks of EPSL to cover the first 2 weeks of unpaid EFMLA, and then she is eligible for another 10 weeks of EFMLA.  If, however, Susan had already used her 2 weeks of EPSL to care for a family member suffering from COVID-19, then Susan’s first 2 weeks of EFMLA are unpaid, and she remains eligible for 10 weeks of EFMLA.  As noted earlier, there is a conflict in the regulations on whether paid time can be substituted for unpaid time. 

Interplay between EFMLA and Traditional FMLA

The regulations acknowledge that some employers already have to comply with the FMLA.  If, for example, an employee has already taken traditional FMLA for another qualifying reason during the applicable leave year, the employee can use the remaining portion of the 12 workweeks for EFMLA.  If an employee has already exhausted the full 12 workweeks of traditional FMLA, s/he is not eligible for EFMLA, but is allowed to use EPSL.  Similarly, if an employee has not used traditional FMLA and does not use all available EFMLA, the employee may still use the remaining 12 workweeks for traditional FMLA purposes.The regulations also clarify that an employee is allowed to take no more than 12 workweeks of EFMLA—even if the time period spans two of the employer’s leave years. For example, if the company’s 12-month period begins on July 1, and the employee took 7 weeks of EFMLA in May and June, 2020, the employee could take only up to 5 additional weeks of EFMLA between July 1 and December 31.

As we know, the pay for EFMLA is 2/3 of the employee’s regular rate of pay, up to $200/day.  However, the employer and employee may agree that an employee may use available paid time to supplement the unpaid 1/3 of EFMLA.  The employer may not require the employee to supplement the unpaid time with his/her available paid time. 

Health Care Coverage During Leave

When an employee is taking EPSL or EFMLA, the employer must maintain the employee’s group health coverage on the same conditions as if the employee continued to work during the leave period.  For example, if an employee has family coverage before taking leave, the employee must be allowed to continue family coverage while on leave.  Maintenance of individual health insurance policies purchased by an employee, however, are the responsibility of the employee.

Employees remain responsible for paying their portion of group health plan benefits while taking leave. Increases or decreases to the employee portion must be applied to employees on leave.  The employee’s share of the premium must be paid by the method normally used during any paid leave – e.g., by payroll deduction.  During any unpaid leave or if an employee’s pay during leave is insufficient to cover the employee’s share of the premiums, an employer can obtain payment from the employee as provided under traditional FMLA, including making payment due at the same time as it would be made if by payroll deduction.

An Employee may choose not to retain group health plan coverage while the employee is taking EPSL or EFMLA.  In such event, when an employee returns from leave, coverage has to be reinstated on the same terms as prior to taking leave, without a new qualifying period or other requirements.

If an employer offers a new health plan or changes its health plan while an employee is on covered leave, the employee is allowed to make changes to the same extent that would have been allowed had the employee not been on leave.  Changes in coverage, premiums and deductibles which apply to all employees also apply to employees taking leave.  Notice of changes must be given to an employee, and if an employee requests changed coverage, the employer must provide it.

An employer’s obligation to maintain health benefits while an employee is taking EPSL or EFMLA ends if the employment relationship would have terminated if the employee had not taken leave (e.g., the employee fails to return from leave or entitlement to leave stops because the employer closes its business). In such instance, COBRA rules apply. 

Return to Work

Generally, an employee is entitled to be restored to the same or equivalent position when returning from EPSL and EFMLA.  However, an employee is not protected from employment actions, such as layoffs, which would have affected the employee regardless of whether the employee took leave.

Key employees, as defined by the FMLA, who take EFMLA can be denied restoration if denial is necessary to prevent substantial and grievous economic injury to the employer’s operations.

Finally, employers with less than 25 employees may deny restoration to an employee who takes EFMLA if all of the following exist:

  • The employee took leave to care for a child whose school or place of care was closed or provider was unavailable for COVID-19 related reasons;
  • The position held when leave began does not exist due to economic conditions or other operating conditions caused by a public health emergency during the leave;
  • The employer makes reasonable efforts to restore the employee to an equivalent position, with equivalent benefits, pay and other terms/conditions; and
  • Where an employer’s reasonable efforts fail, the employer makes reasonable efforts to contact the employee during a 1-year period if an equivalent position becomes available. The 1-year period begins on the earlier of the date the leave ended or the date 12 weeks after the employee’s leave began. 

Employer Notice

Last week, we provided you with access to the DOL’s model notice. The EPSL notices can be found here and the EFMLA notice can be found here.

An employer can satisfy its obligation to post by posting in all of its facilities. However, if you have employees who are already working remotely, the regulations allow you to communicate the notice to those employees through email or by posting on your internal or external website.  Interestingly, you need only provide the notice in English; translation to another language is not required.

Employer Recordkeeping

Employers are required to retain all documents supporting the need for an employee’s leave for 4 years – regardless of whether the request was granted to denied. If an employee provided oral statements to support a request for leave, it is the employer’s responsibility to document the request and maintain the required information described above for 4 years.

If an employer denies EPSL or EFMLA, the determination must be documented and retained for 4 years.

In order to claim tax credits from the IRS, an employer should maintain the following for 4 years:

  • Documentation to show how the employer determined the amount of EPSL and EFMLA to employees eligible for the credit, including records of work, telework, EPLS and EFMLA;
  • Documentation to show how the employer determined the amount of qualified health plan expenses allocated to the wages;
  • Copies of completed IRS Forms 7200 submitted to the IRS;
  • Copies of completed IRS Forms 941 submitted to the IRS, or if you use a third-party payer to meet your tax obligations, records of information provided to that third-party payer substantiating entitlement to the credit claims on the IRS Form 941; and
  • The other documentation described in the tax credit section below.

Documentation Needed to Substantiate Eligibility for Tax Credits

The IRS has published FAQs relating to the tax credits.  At this time, the IRS says the following information should be obtained to substantiate eligibility for the EFMLA and EPSL tax credits:

A written request for the applicable leave from the employee in which the employee provides:

  1. The employee’s name;
  2. The date or dates for which leave is requested;
  3. A statement of the COVID-19 related reason the employee is requesting leave and written support for such reason; and
  4. A statement that the employee is unable to work, including by means of telework, for such reason.

In the case of a leave request based on a quarantine order or self-quarantine advice, the statement from the employee should include the name of the governmental entity ordering quarantine or the name of the health care professional advising self-quarantine, and, if the person subject to quarantine or advised to self-quarantine is not the employee, that person’s name and relation to the employee.

In the case of a leave request based on a school closing or child care provider unavailability, the statement from the employee should include the name and age of the child (or children) to be cared for, the name of the school that has closed or place of care that is unavailable, and a representation that no other person will be providing care for the child during the period for which the employee is receiving family medical leave and, with respect to the employee’s inability to work or telework because of a need to provide care for a child older than 14 during daylight hours, a statement that special circumstances exist requiring the employee to provide care.

Effect on Other Laws, Employer Practices and Collective Bargaining Agreements

An employee’s entitlement to EPSL and EFMLA is in addition to other rights or benefits employees have under any federal, state or local law (except FMLA), under a collective bargaining agreement (CBA) or under any employer policy that existed prior to April 1, 2020.  In addition, EPSL must be used before an employee can be forced to use any other pay to cover a leave provided under the EPSL.

In addition, an employer cannot deny, postpone or delay EPSL or EFMLA to any employee who may have taken leave prior to April 1, 2020 for any COVID-19-related reasons—with the exception of employees who may have already exhausted traditional FMLA.  Similarly, employees are not entitled to retroactive compensation through EPSL or EFMLA for leave taken prior to April 1, 2020.

Employees are not entitled to be paid out for unused EPSL or EFMLA upon employment separation or when the law sunsets on December 31, 2020.

Interestingly, EPSL is provided on a 1-time-use basis – meaning that if a full-time employee uses less than 80 hours of EPSL and then changes employers, the employee is only entitled to the remainder of the 80 hours from the new employer – provided the new employer is covered by the law.  Notably absent in the regulations is a process or procedure by which the new employer is able to ascertain how to obtain this information from the employee or the former employer.

Multi-Employer Plans

Employers who are signatory to multi-employer CBAs can satisfy their obligations under EPSL and EFMLA by making contributions to a multiemployer fund, plan or other program.  Contributions must be based on the hours of EPSL and EFMLA an employee is entitled to receive.  The fund, plan or program must allow employees to access payments.  Alternatively, an employer signatory to a multiemployer CBAs may satisfy its obligations by other means, provided the means are consistent with existing bargaining obligations and any applicable CBA.

Employer Prohibitions

As expected, employers may not discharge, discipline or discriminate against an employee who takes EPSL or EFMLA.  Similarly, you may not discharge, discipline or discriminate against an employee because the employee either files a complaint, institutes a proceeding relating to the leave or has testified or is about to testify in such a proceeding.

Employees who believe that they have been discharged, disciplined or discriminated against for taking or attempting to take EFMLA have a private cause of action against the employer only if the employer is otherwise subject to traditional FMLA.

Temporary Period of Non-Enforcement

As DOL previously noted in its Field Assistance Bulletin 2020-1, DOL not bring enforcement actions against any employer for alleged violations of the FFCRA until April 17, 2020, provided that the employer has made reasonable, good faith efforts to comply.  For purposes of this non-enforcement position, an employer who may be found to have violated the FFCRA acts “reasonably” and “in good faith” when all of the following facts are present:

  1. The employer remedies any violations, including by making all affected employees whole as soon as practicable. As explained in a Joint Statement by the Department, the Treasury Department and the Internal Revenue Service (IRS) issued on March 20, 2020, this program is designed to ensure that all covered employers have access to sufficient resources to pay required sick leave and family leave wages.
  1. The violations of the Act were not “willful” based on the criteria set forth in McLaughlin v. Richland Shoe, 486 U.S. 128, 133 (1988) (the employer “either knew or showed reckless disregard for the matter of whether its conduct was prohibited…”).
  1. The Department receives a written commitment from the employer to comply with the Act in the future.

With that said, provided employers are able to establish its reasons and thought process used when applying the regulations to a particular set of circumstance with good faith, such information will provide a defense to a DOL enforcement action provided remedies any violations when necessary and commits to further compliance.

The CARES Act Provides Substantial Assistance to American Businesses

By Daniel Finerty and Oyvind Wistrom

 On March 27, 2020, President Trump signed the “Coronavirus Aid, Relief, and Economic Security Act,” or the CARES Act (“Act”), the most dramatic financial legislation yet in response to the COVID-19 pandemic. In total, the Act provides $2 trillion in financial assistance, a portion of which is allocated to American businesses, in addition to clarifying and delaying the terms of some business obligations going forward.

Changes and Clarifications to the Families First Coronavirus Response Act

The Act provides a few clarifications and makes modest changes to the extended Family Medical Leave Act provisions in the Families First Coronavirus Response Act (FFCRA). Those changes include definitional changes and clarifications as to the limitation on paid leave:

  • An addition to the definition of “eligible employee” (defined as employed for at least the last 30 calendar days) to include an employee who was laid off by the employer March 1, 2020 or later, worked for the employer for at least 30 days in the last 60 calendar days prior to the lay-off and was subsequently rehired by the employer. (Section 3606.) Therefore, employers should ensure that the amended definition is applied when considering who is eligible for Emergency FMLA.
  • The Act also clarifies that an employer shall not be required to pay “more than $511 per day and $5,110 in the aggregate for each employee,” when the employee is taking leave for the following reason (the numbers correspond to those outlined in the FFCRA):
  1. The employee is subject to a Federal, State, or local quarantine or isolation order related to COVID–19;
  1. The employee has been advised by a health care provider to self-quarantine due to concerns related to COVID–19; or,
  1. The employee is experiencing symptoms of COVID–19 and seeking a medical diagnosis. (Section 3602.)
  • The Act further clarifies that “[a]n employer shall not be required to pay more than $200 per day and $10,000 in the aggregate for each employee” for paid leave, which was not specifically made clear in the FFCRA, for employees taking leave for the following reasons:
  1. The employee is caring for an individual subject to an order described in (1) or self-quarantine as described in (2) above;
  1. The employee is caring for a child whose school or place of care is closed (or child care provider is unavailable) for reasons related to COVID-19; or
  1. The employee is experiencing any other substantially-similar condition specified by the Secretary of Health and Human Services, in consultation with the Secretaries of Labor and Treasury. (Section 3601.)

Unemployment Insurance Support

The Act not only provides additional funds for unemployment insurance (“UI”) benefits through the Department of Labor (“DOL”) but provides states, like Wisconsin, with the opportunity to secure additional supplement benefits. It appears that the federal government is covering 100% of the costs of the expanded UI benefits, and covering the additional administrative expenses that will be incurred to provide these benefits; however, while it does not appear these amounts will have to be repaid to the federal government in a manner similar to prior DOL loans taken in 2008 and 2009, it is not entirely clear.

Support for Non-Traditional Workers

The Act provides the following support to states and waives other DOL requirements:

  • The Act provides additional UI benefits, if caused by COVID-19, to those who are:
  • Self-employed;
  • Seeking part-time employment;
  • Do not have sufficient work history, or otherwise would not qualify for regular unemployment or extended benefits under State or Federal law or pandemic emergency unemployment compensation.

The inclusion of these non-traditional groups is a reflection of the need to allow UI support to a broader category of workers to whom traditional UI is not usually available, such as independent contractors. Specifically exempted from this section, however, are those who have the ability to telework with pay or who are receiving paid sick leave or other paid leave benefits. (Sec. 2101).

In addition to providing independent contractors the ability to apply for Small Business Administration (“SBA”) loan (see below), independent contractors (“ICs”) may able be entitled to obtain UI benefits through the provision above. Business should communicate with their ICs to let them know these avenues of additional relief may be available. However, consideration should be given to the impact of an IC filing for UI on a business’s reserve account compared to an IC seeking to access relief through an SBA loan. The former action portrays an IC akin to an employee, while the latter action stresses the independent nature of the IC’s business and the risk associated with that business. Whether a UI filing by an IC will come back to haunt a business sometime down the road is anyone’s guess.

Waiver of Waiting Period

While DOL typically requires a waiting period before UI benefits start, the federal waiting period has been waived and DOL has offered to pay for the one-week waiting period; however, two clarifications are necessary. First, Wisconsin must opt into this benefits by entering into an agreement with DOL to provide for full DOL funding for the first week of UI benefits. The Unemployment Insurance Division is indicating that they are awaiting further word from DOL on this issue.

Second, if Wisconsin does opt in, which remains to be seen, Wisconsin’s waiting period is statutory in nature instead of a regulatory requirement which could be waived by the Governor. See Wis. Stats. §§ 108.02(26m), 108.04(3). These provisions must be amended by the Legislature and enacted by the Governor. Assembly Bill 1034, relating to the suspension of the waiting period for collection of unemployment insurance benefits, has been introduced in the Assembly and referred to the Rules Committee. Accordingly, the one-week waiting period is still in place pending further action in the Assembly.

Additional UI Supplemental Funding

States can also, upon agreement with DOL, receive additional federal funding through the Pandemic Unemployment Assistance (PUA), for a period of their choosing to end no later than December 31, 2020, to provide UI benefits, where permissible under state law in a supplemented amount. This supplemented amount includes the amount permitted by state law plus “an additional amount of $600.” (Section 2104.) Wisconsin must also opt into or agree to receive this DOL funding.

Tax Credits

Other sections of the Act provide a business tax credit based on a percentage of wages paid to be taken as a tax credit, for businesses closed due to COVID-19 if the business sustains a specifically outlined loss in gross receipts provided the business achieves the same or similar gross revenue from the calendar quarter in the prior year. (Section 2301.)

Delay of Employer Payroll Taxes

Additional provisions delay the obligation to pay employer payroll taxes. (Section 2302.) The Act postpones the due date for depositing employer payroll taxes and 50% of self-employment taxes related to Social Security and attributable to wages paid during 2020. Any deferred tax payments would then be due in two installments, the first at the end of this year on December 31, 2021 and the second half due a year after on December 31, 2022.

Employee Retention Credit

The Act provides eligible employers, including 501(c)(3) entity non-profits, with a refundable credit against payroll tax (Social Security) liability equal to 50% of the first $10,000 in wages per employee (including value of health plan benefits). To be eligible, the business must have carried on a trade or business during 2020 and satisfy one of two tests. First, the business must have operations fully or partially suspended due to orders from a governmental entity limiting commerce, travel, or group meetings. Second, alternatively, the business must experience a year-over-year (comparing calendar quarters) reduction in gross receipts of at least 50% – until gross receipts exceed 80% year-over-year.

For employers with more than 100 full-time employees, only employees who are currently not providing services for the employer due to COVID-19 causes are eligible for the credit. The employee retention credit is effective for wages paid after March 12, 2020, and before January 1, 2021.

SBA Paycheck Protection Program

The $349 billion SBA lending program will help keep small businesses operating, to keep their workers employed and to encourage rehiring of employees that have been furloughed or laid off. Eligible businesses include certain business concerns, nonprofit organizations, veterans’ organizations, or certain Tribal business concerns with fewer than 500 employees, hospitality businesses with fewer than 500 employees at each location, sole-proprietors, independent contractors, and self-employed individuals. (Section 1102(2)). The maximum amount of any such loan is calculated using a formula based upon number of employees and other factors, not to exceed $10,000,000.

For an eligible self-employed individual, independent contractor, or sole proprietorship seeking a covered loan, these entities must submit such documentation as is necessary to establish eligibility, including payroll tax filings reported to the Internal Revenue Service, Forms 1099–MISC, and income and expenses from the sole proprietorship.

These businesses may be eligible for forgiveness of indebtedness on a covered loan in an amount equal to the sum of the costs incurred and payments made during the time of the loan including payroll costs, any payment of interest on any covered mortgage obligation (which shall not include any prepayment of or payment of principal on a covered mortgage obligation), any payment on any covered rent obligation and any covered utility payment. When forgiven, the amount of the loan is paid by the federal government to the lender.

Of particular note for businesses is that these loans may be forgiven for an amount equal to the amount spent on payroll (capped at $100,000 in wages), rent, mortgage interest, and utilities for eight weeks beginning on the origination date of the loan. However, forgiveness will be reduced in proportion to any reduction in employees and to a reduction in employees’ pay of greater than 25 percent.

The SBA will issue implementing regulations within 15 days of the Act’s enactment. Regulations are likely on either Saturday, April 11, 2020, or the next business day, Monday, April 13, 2020. The provisions are retroactive to February 15, 2020, and cover loans from that date to June 30, 2020.

Additional Business Loans to Distressed Industries

The Act creates a new Business Loan Program category (Program) for a period from February 15, 2020 to June 30, 2020 and allows the SBA to provide 100% federally-backed loans up to a maximum amount to eligible businesses to help pay operational costs like payroll, rent, health benefits, insurance premiums, utilities, etc. to certain recipients subject to certain conditions. The Program provides financing for banks to loan money to business with between 500 and 10,000 employees; specifically, $25 billion is allocated for passenger airlines; $4 billion for cargo airlines; $17 billion for businesses critical to “maintaining national security;” and $454 billion for loans, loan guarantees, and investments in businesses and municipalities.

Notably, the $454 billion Program provides assistance to businesses that otherwise do not receive relief under the Act and, in this regard, this program should be considered a business’s option of last resort. While there are numerous conditions upon a loan under the program, among those that are troubling from a labor and employment perspective are the following conditions, which the business must certify that:

  • The funds the business receives will be used to retain at least 90 percent of the business’s workforce, at full compensation and benefits, until September 30, 2020;
  • The business intends to restore not less than 90 percent of the business’s workforce that existed as of February 1, 2020, and to restore all compensation and benefits to the workers no later than 4 months after the termination date of the public health emergency declared by the Secretary of Health and Human Services on January 31, 2020;
  • The business will not outsource or offshore jobs for the term of the loan and 2 years after completing repayment of the loan;
  • The business will not abrogate existing collective bargaining agreements for the term of the loan and 2 years after completing repayment of the loan; and,
  • The business will remain neutral in any union organizing effort for the term of the loan.

(Section 4003(c)(3)(D)). Because of the uncharted territory that both union and non-union businesses are traveling, in which the economic future may not be predictable, it may be understandably difficulty to certify these conditions and/or comply with them in the long-run. In addition to the difficulty of this certification, this Program does not provide loan forgiveness and requires a business that is not publicly traded provide the government with a warrant, equity interest or senior debt instrument in the business. As a result, to the extent support is available through other SBA programs, businesses should turn to those options first.

Pension Extensions

The Act permits single-employer pension plan businesses to delay the due date for any contribution otherwise due during 2020 until January 1, 2021. As such, a business’s contribution typically due on July 1, 2020 may be delayed until January 1, 2021, which will free up financial resources that can be used to assist in pandemic response and/or ramp up when the economy comes back on line.

If you have questions or concerns, please contact your Lindner & Marsack attorney.

This Legal Alert provides an overview of a specific developing situation. It is not intended to be, and should not be construed as, legal advice for any particular fact situation.

DOL ISSUES MODEL NOTICE FOR FAMILIES FIRST CORONAVIRUS RESPONSE ACT

By; Sally A. Piefer

This afternoon the Department of Labor (DOL) issued its Families First Coronavirus Response Act Notice. A copy of the notice can be found here.

Please note the following about the Notice:

  • The effective date for the new Act will be April 1, 2020.
  • Covered employers (those with fewer than 500 employees) must post this notice in a conspicuous place on your premises.
  • For employees who are already working remotely or are on leave, you may also satisfy your posting requirement by emailing or mailing a copy of the notice to employees, or posting it on your intranet.
  • You need not provide the notice to employees who are laid off. You only need to provide notice to current employees.
  • If you are hiring new employees, you must convey the notice to them, either by email, direct mail or by posting the notice on your premises. If new employees will not have access to your premises, we recommend conveying the notice by email or direct mail.

While not required to post the notice in multiple languages, be aware that the DOL is working on translating the notice in other languages.

We will continue to monitor further COVID-19 developments. If you have questions or concerns, please contact your Lindner & Marsack attorney.

GOVERNOR EVERS SIGNS EMERGENCY ORDER #12, ALSO KNOWN AS THE SAFER-AT-HOME ORDER

Today, Wisconsin Governor Tony Evers directed the Department of Health Services (DHS) to issue a Safer at Home order that prohibits all nonessential travel, with various exceptions.  The Order is available here.

Businesses should review the Order to see if they quality as an exempted business and, if not, what restrictions exist.  If a business is unsure whether it qualifies as an essential business under the Order, representatives are encouraged to contact the Wisconsin Economic Development Corporation https://wedc.org/essentialbusiness/ for clarification.  For businesses not exempted from coverage by the Order to which exceptional circumstances apply, an exemption from the Order can be requested:

In the exceptional circumstance that a business is not listed in this Order as an Essential Business or Operations but believes that it should be included in that designation, a business is not listed in this Order as an Essential Business or Operations but believes that it should be included in that designation, the business should consult the information page on the Wisconsin Economic Development Corporation (WEDC) website.  If a business still believes that it does not fall within the meaning of Essential Businesses and Operations, it may apply to the Wisconsin Economic Development Corporation (WEDC) using the provided form requesting designation as such.

Order, Section 13(z), p. 14.  The order is effective from 8:00 a.m. on Wednesday, March 25, 2020 until 8:00 a.m. Fri., April 24, 2020, or until the Governor issues a superseding Executive Order.

As a result of the Order, the majority of Lindner & Marsack, S.C. personnel will be working from home, except for a small number of employees necessary to complete on-site projects each day.  All employees are available as if they were sitting at their desk.

PRESIDENT SIGNS FAMILIES FIRST CORONAVIRUS RESPONSE ACT

By Sally Piefer and Oyvind Wistrom

Last evening the President signed the Families First Coronavirus Response Act. The legislation had passed the Senate only hours before. The Response Act has a number of provisions which employers must be aware of—an expansion of the federal Family & Medical Leave Act (FMLA) and a paid sick time.

Expansion of the FMLA

The expanded provisions, which provide coverage for public health emergency leave, are in place through December 31, 2020, and this public health emergency leave covers all employers with fewer than 500 employees. This is a significant departure from the current provisions of the FMLA—which apply to employers with 50 or more employees who work within a 75-mile area. An eligible employee is one who has been employed with the employer for at least 30 calendar days.

The new leave provides coverage for employees who are unable to work (or telework) because they need leave to care for a child (under age 18) if the child’s elementary or secondary school or place of care has been closed or if the child care provider is unavailable because of a public health emergency. Of course, the term “public health emergency” means an emergency with respect to COVID-19 declared by a federal, state or local authority. This is the only qualifying need for emergency FMLA leave and is a departure from the earlier version of the bill.

The specific leave provisions allow an employee to take up to 12 weeks of job-protected leave. If the need for such leave is foreseeable, the employee must provide notice of leave as soon as practicable. The first 10 days of leave are unpaid, but the employee may substitute available paid leave. After the first 10 days, the employer must provide paid leave for each day the employee takes leave, up to a maximum of 12 total weeks of leave. Pay for the employee must be at no less than 2/3 of the employee’s regular rate of pay for each hour the employee would normally be scheduled to work. Special rules are in place for employees who have variable work schedules. The pay is also capped at $200 per day and $10,000 in total.

Employees are also generally entitled to reinstatement—but restoration is not required of an employer with less than 25 employees if (i) the position the employee held does not exist due economic conditions or other conditions caused by the public health emergency; (ii) the employer makes a reasonable effort to restore the employee to a position similar to the one held before the leave, with equivalent pay, benefits and other terms and conditions of employment; and (iii) if the employer’s reasonable efforts fail, the employer makes reasonable efforts to contact the employee if an equivalent position becomes available during the earlier of the 1-year period after the public health emergency concludes or the date which is 12 weeks after the date the employee’s leave began.

Employers who are subject to a multi-employer collective bargaining agreement (CBA) can fulfill their obligations under this FMLA expansion by making contributions to the fund, plan or program based on the paid leave provisions provided under the CBA.

Emergency Paid Sick Leave

The Emergency Paid Sick Leave Act provisions of the legislation mandate that employers who employ less than 500 employees provide limited paid sick leave to employees who are unable to work (or telework) because of leave needed for any of the following reasons:

  1. The employee is subject to a state, federal or local quarantine or isolation related to COVID-19;
  2. The employee has been advised by a health care provider to self-quarantine due to concerns related to COVID-19;
  3. The employee is experiencing symptoms of COVID-19 and is seeking a medical diagnosis;
  4. The employee is caring for an individual subject to a state, federal or local quarantine or isolation related to COVID-19;
  5. The employee is caring for their child if the child’s school or place of care has been closed, or the child care provider is unavailable due to COVID-19 precautions; or
  6. The employee is experiencing any other substantially similar conditions specified by the Secretary of HHS in consultation with the Secretary of the Treasury and the Secretary of Labor.

All employees are eligible for the emergency paid sick leave—regardless of the length of their employment. After the first workday an employee needs leave, the company may require an employee to follow its normal call-in procedures to continue receiving paid sick time. However, employers may not require employees to first exhaust other available paid leave before providing emergency paid sick leave. This emergency leave is in addition to, other leave which an employer may already provide under existing policies or CBAs.

For full-time employees, the paid sick leave is limited to 80 hours; for part-time employees, the paid leave is equal to the number of average hours that an employee works during a 2-week period.

The sick leave is paid at the employee’s regular rate of pay for qualifying leave reasons 1-3 above, but only at 2/3 of the employee’s regular rate of pay for qualifying reasons 4-6. Paid sick leave is calculated at not less than the greater of the following: (i) the employee’s regular rate of pay, (ii) the federal minimum wage or (iii) the state minimum wage in the state in which the employee is employed. The pay is further limited and shall not exceed $511 per day (or $5,110 in the aggregate) for leave connected with reasons 1-3 above, and shall not exceed $200 per day (or $2,000 in the aggregate) for reasons 4-6 above. Different rules apply for employees with variable work schedules.

This paid sick leave does not carry over from one year to the next, and this part of the legislation also sunsets on December 31, 2020. Employers may not discriminate against, discipline or discharge an employee who takes emergency paid sick leave, files a complaint or initiates a lawsuit about the emergency leave, or otherwise participates in a proceeding. Employers who violate the Act are subject to the same penalties as are provided for violations of the Fair Labor Standards Act (FLSA).

Small employers employing fewer than 50 employees may be able to claim an exemption to the requirements of the paid sick leave portion of the Act if it can show that compliance would jeopardize the viability of the business as a going concern.

Tax Credits for Employers

The Act also provides a series of refundable tax credits for employers who are required to provide the Emergency Paid Sick Leave and Emergency Paid Family and Medical Leave described above. These tax credits are allowed against the employer portion of social security and Medicare taxes (collectively referred to as FICA). While this limits application of the tax credit, employers will be reimbursed if their costs for qualified sick leave or qualified family leave wages exceed the taxes they would owe.

Specifically, employers are entitled to a refundable tax credit equal to 100% of the qualified sick leave wages paid by the employer for each calendar quarter in adherence with this Act. The qualified sick leave wages are capped at $511 per day ($200 per day if the leave is for caring for a family member or child).

Similarly, employers are entitled to a refundable tax credit equal to 100% of the qualified family leave wages paid by the employers for each calendar quarter in accordance with this Act. The qualified family leave wages are capped at $200 per day for each individual up to $10,000 total per calendar quarter. Only those employers who are required to offer Emergency FMLA and Emergency Paid Sick Leave may receive these credits.

Next Steps

The Secretary of Labor will have the authority to (i) issue regulations, (ii) exclude certain health care providers and emergency responders from the definition of an eligible employee and (iii) exempt small businesses with less than 50 employees where compliance would jeopardize the viability of the business.

The effective date of the new mandate will be no later than 15 days after the Act was signed by President Trump, which means an effective date no later than April 2, 2020.  Also, a model notice that employers will need to post, should be available from the Secretary of Labor within the next week, and regulations for calculating the paid sick leave are supposed to be available within the next 15 days.

We will continue to monitor further COVID-19 developments. If you have questions or concerns, please contact your Lindner & Marsack attorney.

 

This Legal Alert provides an overview of a specific developing situation. It is not intended to be, and should not be construed as, legal advice for any particular fact situation.

 

COVID-19 Update and Cancellation of Firm Seminar

By: Oyvind Wistrom

These are difficult and unusual times, to say the least.  We wanted to let you know that Lindner & Marsack, S.C. remains as committed as ever to your success, and are working extra diligently to help you prepare and answer questions about COVID-19, and to navigate this quickly evolving situation.

To do this, we will be making a few changes that will help us to continue to serve our clients (while keeping you and our staff safe).  Here are some of the things we are doing:

  • We have ensured that there will be no disruption in our service to you. Many of our attorneys are fully equipped to work from home. Our IT infrastructure is backed up and is secured.
  • We will continue to provide you with E-alerts as necessary to help address the continually evolving legal landscape associated with COVID-19.
  • At this point, we are not prohibiting any visitors from entering our offices. This policy may change, depending on further word from the CDC, and we will keep you posted.
  • If clients prefer, we can shift in-person client meetings to conference calls.
  • If any of our lawyers are working remotely, calls can be forwarded to their cell phones and the voicemail messages will continue to be sent to the lawyer via email.
  • We have cancelled the May 6, 2020 Firm Seminar, which was scheduled to be held at the new Brookfield Conference Center. We are planning to present information from this seminar through periodic E-alerts after we stabilize from the effects of the coronavirus.

Thank you for your understanding as we take these precautionary steps.  If you have any questions or concerns, please reach out to your Lindner & Marsack attorney.

Wisconsin Worker’s Compensation In-Person Hearings, Prehearings and Mediations Suspended!

By: Chelsie Springstead

Per the OWCH COVID-19 Notice from State of Wisconsin, Division of Hearings and Appeals, issued on Friday, March 13, 2020, as of next Monday, March 23, 2020, the Office of Worker’s Compensation Hearings will stop conducting in-person hearings, prehearings and mediations.  This is expected to continue through April 20, 2020.

Hearings will be converted to telephonic settlement conferences.  Prehearings and mediations will be conducted telephonically, as well.  Revised notices will be sent out to all parties with call-in instructions.

Please note that Hearings scheduled for this week, March 16-20, are still being held in-person.  However, the parties can contact the Administrative Law Judge assigned to the file if they would like to convert any hearings this week to telephonic settlement conferences.

If you have any questions, please feel free to contact Chelsie Springstead or any member of the Lindner & Marsack worker’s compensation team.  We will continue to provide you with email updates as things change.

 

 

Addressing COVID-19 Workplace Issues: Responding to Employers’ Most Common Questions

By:  Oyvind Wistrom and Sally Piefer

The NBA has suspended play.  The NCAA tournament has been cancelled.  The World Health Organization (WHO) has now declared that the COVID-19 Coronavirus is a pandemic.  Either your business has already been directly or indirectly affected or it inevitably will be affected by COVID-19.  What can you do as an employer?  The following tips should help you navigate the novel issues created by this unprecedented situation.

  1. What if an employee reports to work with flu-like symptoms – what can we do as an employer?

If any employee presents themselves at work with a fever or difficulty breathing, employers may ask such employees if they are experiencing influenza-like symptoms, such as fever or chills and a cough or sore throat.  Employers must maintain all information about employee illness as a confidential medical record in compliance with the Americans with Disabilities Act (ADA).  If an employee is experiencing these symptoms, the employee should be directed to seek immediate medical evaluation.  It is also recommended that employers train supervisors on how to recognize these symptoms, while stressing the importance of not overreacting to situations in the workplace potentially related to COVID-19 in order to prevent panic among the workforce.

  1. Can we ask an employee to stay home or leave work if they exhibit symptoms of the COVID-19 coronavirus or the flu?

Yes.  The Center for Disease Control (CDC) has made it clear that employees who exhibit influenza-like symptoms at work during a pandemic should leave the workplace and be asked to stay home.  Employees who have symptoms of acute respiratory illness are recommended to stay home until they are free of a fever (100.4º F), signs of a fever, or any other symptoms for at least 24 hours, without the use of fever-reducing or other symptom altering medicines.  Now that the COVID-19 virus has been declared a pandemic by the WHO, the Equal Employment Opportunity Commission (EEOC) has stated that advising workers to go home is not disability-related if the symptoms presented are akin to the seasonal influenza.  An employer may therefore require workers to go home if they exhibit symptoms of the COVID-19 coronavirus or the flu without running afoul of the EEOC’s interpretation of the ADA.

  1. Can an employer take an employee’s temperature at work to determine whether they might be infected?

Maybe.  The ADA places restrictions on the inquiries that an employer can make into an employee’s medical status, and the EEOC considers taking an employee’s temperature to constitute a “medical examination” under the ADA.  The ADA prohibits employers from requiring medical examinations and making disability-related inquiries unless (1) the employer can show that the inquiry or exam is job-related and consistent with business necessity, or (2) the employer has a reasonable belief that the employee poses a “direct threat” to the health or safety of the individual or others that cannot otherwise be eliminated or reduced by reasonable accommodation.

The EEOC takes the position during a pandemic that employers should rely on the latest CDC and state or local public health assessments to determine whether the pandemic rises to the level of a “direct threat.”  The assessment by the CDC as to the severity of COVID-19 will likely provide the objective evidence needed for a medical examination.  If COVID-19 becomes widespread, as determined by state or local health authorities or the CDC, then employers would likely be permitted to take an employee’s temperature at work.  However, as a practical matter, an employee may be infected with COVID-19 without exhibiting any symptoms such as a fever, so temperature checks may not be the most effective method for protecting your workforce.

  1. An employee of ours has tested positive for COVID-19. What should we do?

In addition to sending the employee with the positive test home, you should send all employees who worked closely with that employee home for a 14-day period of time to ensure the infection does not spread.  Make sure the affected employee identifies all individuals who worked in close proximity (within six feet) with them in the previous 14 days to ensure you have a full list of those who should be sent home.  When sending the employees home, do not identify by name the infected employee or you could risk a violation of the ADA.  You may also want to consider asking a cleaning / remediation company to undertake a deep cleaning of your affected workspaces. If you work in a shared office building or area, you should inform building management so they can take whatever precautions they deem necessary.

  1. Can an employee refuse to come to work because of fear of COVID-19 infection?

Employees are only entitled to refuse to report to work if they believe they are in imminent danger.  Section 13(a) of the Occupational Safety and Health Act (OSH Act) defines “imminent danger” to include “any conditions or practices in any place of employment which are such that a danger exists which can reasonably be expected to cause death or serious physical harm immediately or before the imminence of such danger can be eliminated through the enforcement procedures otherwise provided by this Act.”  This is a relatively high standard that requires a “threat of death or serious physical harm,” or “a reasonable expectation that toxic substances or other health hazards are present, and exposure to them will shorten life or cause substantial reduction in physical or mental efficiency.”

For an employee to refuse to report for work, the threat must be immediate or imminent, which means that an employee must believe that death or serious physical harm could occur within a short period of time.  Requiring travel to certain areas of the world or requiring employees to work with patients in a medical setting without personal protective equipment at this time may rise to this threshold.  Most work conditions in the United States, however, would not presently meet this threshold.  Each case must be evaluated on its own merits and employers should seek to determine whether their workplace creates imminent danger to employees.

  1. May an employer require a new employee to have a post-offer medical examination to determine their general health status?

Yes, the ADA allows a medical examination of a new employee as long as it is required only after a conditional offer of employment is made.  The medical examination is permitted so long as all entering employees in the same job category are required to undergo the medical examination and the information obtained regarding the medical condition or history of the applicant is collected and maintained on separate forms and in separate medical files and is treated as a confidential medical record.

Employers may also ask if they are experiencing any symptoms of COVID-19 – fever, cough, shortness of breath or other acute respiratory symptoms.  If the applicant or new employee answers yes, then you can ask them to delay starting for 14 days.  Be sure to maintain the confidentiality of the responses.

  1. May an employer encourage employees to telework (i.e., work from an alternative location such as home) as an infection-control strategy during a pandemic?

Yes.  Telework is an effective infection-control strategy that is also familiar to ADA-covered employers as a reasonable accommodation.  In addition, employees with disabilities that put them at high risk for complications of pandemic influenza may request telework as a reasonable accommodation to reduce their chances of infection during a pandemic.  An employer is not required to provide telework as an option to all employees, but is recommended that if the opportunity is presented to a certain classification of employees, all other employees in that job classification should similarly be permitted to telework.

8.     During a pandemic, may an employer require its employees to adopt infection-control practices, such as regular hand washing, in the workplace?

Yes.  Requiring infection control practices, such as regular hand washing, coughing and sneezing etiquette, and proper tissue usage and disposal, does not implicate the ADA.  The messages you should be giving to your employees are:

  • Wash your hands often with soap and water for at least 20 seconds. If soap and water are not available, use an alcohol-based hand sanitizer.
  • Avoid touching your eyes, nose, and mouth with unwashed hands.
  • Avoid close contact with others, especially those who are sick.
  • Refrain from shaking hands with others for the time being.
  • Cover your cough or sneeze with a tissue, then throw the tissue in the trash.
  • Clean and disinfect frequently touched objects and surfaces.
  • And, perhaps most importantly, tell employees to stay home if they are sick.

9.     Can we require employees who are sent home or who do not report for work to use accrued PTO time?

Yes.  At least under Wisconsin law, an employer may require employees to use accrued PTO time if they are unable or unwilling to report to work – this is the case even if the employer shuts down a facility and the employee is therefore unable to work.  The only exception in Wisconsin would be with respect to employees who suffer from a serious health condition under the Wisconsin FMLA.  In such cases, an employer is not permitted to mandate that employees use their personal PTO time during the pendency of the Wisconsin approved portion of the FMLA leave (two weeks).  After an employee has used up their two-week allotment of Wisconsin FMLA, an employer can then mandate that PTO be utilized.

  1. As Spring Break is approaching, what questions can I ask about employees’ personal vacations?

You can ask your employees whether they have traveled to any locations the CDC or state health officials have indicated are destinations with a risk of community-spread coronavirus—currently about 30 countries in Europe (along with China, Iran, Japan, Singapore, South Korea, Taiwan & Thailand).  Check the CDC website for a list of current countries (https://wwwnc.cdc.gov/travel).  The CDC recommends that anyone traveling to these countries should stay home for 14 days from the time the employee left the country and to practice social distancing.  Some employers have initiated mandatory time away from work if employees are returning from a country on the CDC list.

You can also ask employees whether they been on a cruise ship.  If on a cruise ship in the last 14 days, the employee should stay home for 14 days if a case of Coronavirus was reported on the ship during the cruise.  Otherwise, it does not appear the CDC is currently recommending any work-related social distancing – unless the person is exhibiting symptoms – fever, cough, trouble breathing.  However, the situation is in constant flux, so you may want to check the CDC website or contact legal counsel for up to date guidance.

Lindner & Marsack, S.C. represents employers in all areas of labor and employment law.  If you have any other labor or employment matter involving your business, please either contact Oyvind Wistrom at owistrom@lindner-marsack.com or Sally Piefer at spiefer@lindner-marsack.com, or any other attorney you may work with at the firm.

 

LINDNER & MARSACK, S.C., ANNOUNCES DANIEL PEDRIANA’S NOMINATION AS A FELLOW OF THE COLLEGE OF WORKERS’ COMPENSATION LAWYERS

Lindner & Marsack, S.C., today announced that Daniel Pedriana has been nominated as a Fellow of the College of Workers’ Compensation Lawyers.

According to the College’s Board of Governors, who approved Pedriana’s nomination, election as a Fellow represents the recognition by your colleagues that you have distinguished yourself as an outstanding professional. It recognizes that an attorney has made a sustained contribution to the field and meets the College’s standards of integrity, professionalism and character.

“I’m honored to be recognized by the highly-regarded College of Workers’ Compensation Lawyers,” says Pedriana. “In addition, I’m humbled by the company I’ll join as a Fellow of the College – attorneys who demonstrate the highest level of professional expertise as well as a strong commitment to ethical standards, integrity and leadership.”

Pedriana is a shareholder and member of the Board of Directors of Lindner & Marsack. His practice primarily focuses on defending workers’ compensation claims for the insurance industry and self-insured employers. He also frequently handles related employment and subrogation issues. Pedriana lectures and speaks on workers’ compensation law, along with related labor and employment law and subrogation topics, in Wisconsin and throughout the United States.

A special induction ceremony and dinner for new Fellows will be held at the Westin New Orleans Canal Place Hotel on Saturday, March 28, 2020.