Over the past few weeks, we’ve been doing a lot of talking
and listening about one particular topic: COVID-19. HR and business leaders are
all doing their best to address the situation in the best, safest way possible,
but there’s a lack of clarity out there when it comes to what is recommended
and what is required.
That’s why we decided to compile a list of the questions
we’re hearing most and provide some answers to them in a centralized,
easy-to-reference place.
Moving forward we’ll explore:
How to approach employee health and safety in a
way that is legal & compliant
What you can and can’t do when it comes to a
work-from-home policy
What you can and can’t do when it comes to pay
at this time
How to approach the expanded FMLA leave
requirements
What you need to know about terminating
employees at this time
How to support your employees through
unemployment insurance
Questions About Employee Health & Safety
Should we be working right now? Is this safe for our employees?
Based on guidance from the CDC and WHO, gatherings of people
should be limited and eliminated whenever possible. In some states and
counties, gatherings are restricted based on a specific number of attendees. It
is also recommended that all people maintain
a distance of two meters (about six feet) between themselves and all other
individuals.
That means that unless you are an essential industry, you
should not be maintaining standard, traditional office-style operations. That
does not mean, however, that the work needs to grind to a halt. If you have the
capacity to enable employees to do meaningful work from home, then it is safe
and advisable to maintain the highest possible degree of operational normalcy
that way.
What if we’re an essential business and employees are refusing to come to
work?
This is one of the trickier hypothetical situations
businesses are dealing with today. If you are a qualified essential business,
you can continue operations more or less as usual. However, other federal,
state, and local guidance – as well as personal fears and anxieties – could be
reasonably pulling your employees in a different direction.
This scenario is most likely for employees who have a
pre-existing health condition or are immunocompromised. To prevent
discrimination claims, it’s crucial you provide such workers with access to
reasonable accommodations to protect their health or paid leave if you feel
accommodations cannot be made.
In the case of employees without pre-existing conditions,
it’s important you hear their concerns about health and safety, do everything
you can to keep them safe in terms of following guidance, providing PPE, etc.
Only when those concerns have been squared away can you begin to address
whether an employee is being noncompliant.
Can I send an employee home from work if I believe they are exhibiting
symptoms of COVID-19?
Yes! In fact, the CDC recommends separating employees from
the rest of the team and sending them home if they are exhibiting symptoms in
the workplace.
If the employee feels strongly that they are well enough to
work, you can set up a remote work program for them to continue their
productivity while doing your best to protect essential workers in the office.
What if an employee is clearly displaying symptoms of illness but insists
they are not sick with COVID-19?
The CDC and EEOC have both issued guidance advising
employers to send employees home when they are exhibiting symptoms of COVID-19.
Therefore, the best and safest approach is to send people home when they appear
to be sick.
If an employee is displaying concerning symptoms but states
they are related to allergies, asthma, etc., the safest course of action for
your team and business is to send that employee home. Of course, if they feel
well, you need to be sure you’re either connecting them with resources that
allow them to work from home or offering relevant paid leave.
This particular issue may seem frustrating in the present
moment, but an abundance of caution now (and some small inconvenience to a few)
will go a long way to clarify the scope of the pandemic and enable the best
possible business decisions.
How should I address employees who have sick family members/roommates/etc.?
CDC guidance recommends such employees contact a direct
supervisor and/or HR to keep them apprised of the situation as soon as
possible. To ensure that happens, you need to be sure your employees are
familiar with the guidance and know who their relevant point of contact should
be.
From there, you’ll need a consistent, fair policy to address
how these employees should proceed. It’s reasonable to ask such workers to stay
away from the rest of the team if possible, but you must offer them remote work
opportunities or FMLA leave (see below).
If employees are calling out sick, can you ask them about their symptoms
for your own internal COVID-19 response planning?
The short answer is yes, but it’s important to be careful.
If you ask people to “defend” their sick-out, it can be construed as
discriminatory, especially if the employee has a pre-existing health condition.
However, you can ask them politely and let them know it’s to help guide
your response plan.
Also, if you are gathering information about symptoms, it’s
important to understand that it’s private healthcare information, which means
the data must be confidential. The worst mistake a business could make at this
moment would be creating a backlog of discrimination and HIPAA complaints.
Questions About Employees Working from Home
Can we enable certain groups of employees (departments, teams, roles, etc.)
to work from home but not all employees?
Yes, as long as you are using non-discriminatory criteria.
For example, you can enable your whole sales team to work from home without
enabling work-from-home for your production workers, but you cannot base
remote work opportunities on criteria like gender, age, disability, etc.
Do we need an official policy to address remote work expectations?
This isn’t a point of regulatory compliance yet, but
a codified remote work policy is absolutely an HR best practice for any
organization. When you have a remote work policy, it’s easier to monitor
workers, assess their productivity, and hold them accountable.
Remote work
policies need to address two main issues: communication expectations for
employees and work enablement expectations that you will fulfill as the
employer. It’s crucial that your remote work policy addresses meaningful
enablement and isn’t just a list of employee-facing rules.
Questions About Closures & Pay Adjustments
Can we reduce pay due to the economic slowdown and loss of business?
You can, but you need to provide written notice and may not
retroactively lower pay for hours already worked under the previous rate. You
may not lower pay below federal, state, or local minimum wage.
If you work in a unionized and/or collective bargaining
environment, you will need to speak with your lawyers and connect with union
leadership before making or announcing any decisions about pay.
If we close our business down for a few weeks/months, do we need to
continue to pay employees?
You only need to pay your nonexempt (hourly) workers for
hours worked. That means, if your business is closed, you do not need to pay
them for work that is not happening. However, if you are planning to reopen and
continue to employ those employees in the future, you need to address their
employment status in some way, either by continuing to pay them, allowing them
to use banked vacation/PTO, or requiring them to take an unpaid vacation.
Exempt employees must be paid their salaries unless the
business is closed and they are doing no work from home. During a
closure, exempt employees may also use vacation/PTO time.
If we close temporarily, will our employees be eligible for unemployment
insurance?
Unemployment regulations vary from state to state, so you
need to consult your local laws. Most states have a waiting time of 1-3 weeks
before benefits kick in, so it’s important to plan your closing in a way that
ensures continuity of income for employees.
Which leave regulations apply to missing work at this time?
Depending on your situation, federal FMLA or other state
leave frameworks will apply. At this time, best practice is to treat all leaves
as job-protected to allow workers to protect their health, their families’
health, and the health of your business overall.
How are we supposed to pay for leave under the new FMLA extension?
The recent FMLA extension expanded requirements for
thousands of medium-sized businesses around the country. At first blush, many
people were scared about how businesses could possibly cover those expenses while
facing an economic slowdown.
However, the Families First Coronavirus Act has built a
variety of tax credits into the law for businesses to help meet these new
burdens. While the picture is far from completely clear, it appears the federal
government is willing to step in and help employers support their workers while
maintaining the health of the economy.
The rapidly evolving COVID-19 outbreak has HR and business
leaders scrambling for answers to pressing questions caused by various unknown
factors. However, as we move into the third-week of our nationwide workforce
response, some best practices and paths forward are finally becoming clear.
Remember:
If you’re still working a traditional
office/storefront/etc., you need to manage your workforce in a way that
protects everybody’s health
You should be putting your efforts into keeping
work alive via remote work, if possible
It’s crucial to address employee needs,
concerns, and fears in a way that is compliant and avoids unintentional
discrimination
You can reduce pay or close your business at
this time, but you must do so in a thoughtful, well-planned way that gives your
team members time to adjust
FMLA leave and paid sick time expansion is
presenting some additional challenges to business, but tax credits should
offset costs in the long-run
How to Learn More
[Webinar] What Employers Need to Know About the COVID-19 Outbreak
Last week, Launchways hosted a webinar on the most crucial considerations employers must have in mind as the COVID-19 crisis unfolds. On the webinar we covered:
-Formalizing your COVID-19 strategy & response plan -The difference between furloughs and layoffs -The COVID Relief Bill HR6201 -Crucial FMLA & Sick Leave considerations -What to do if one of your employees has COVID-19 or has been exposed to COVID-19 -Employee benefits considerations including telemedicine, COBRA, & STD
Launchways is adjusting along with the rest of the world to
comply with guidance from public health experts without sacrificing continuity
of service for our clients.
We’ve always offered progressive work-from-home plans and
evangelized for work arrangement flexibility for years, but we’re still feeling
many of the same pains as everybody else during this transition to a
fully-remote team. Thanks to our team’s adaptability, though, we’ve stumbled
upon some powerful remote work practices, and we’re happy to share those
insights forward with other organizations looking for some resources and ideas
to keep the work, team, and culture alive.
We’re specifically excited to provide some actionable
recommendations related to:
How we’ve adjusted the way we communicate to keep
the work alive
How we’ve come together in new ways to keep our
team spirit and company culture alive while practicing social distancing and
maximizing everyone’s safety and health
Leveraging a Powerful Online Communication Platform
Our first big question when we made the decision to
decentralize was, “How can we keep positive, collegial interactions alive?”
Emails lack immediacy, and nobody enjoys going back and
forth on a big “Reply All” thread. At the same time, texting each other felt
like it worked in a pinch but lacked formality and connection to our actual
work.
What we settled on was the Microsoft Teams platform, a
communication and collaboration space that we can use as a chat board with
built-in document sharing. We were able to segment the board to create a
whole-staff conversation as well as team-level and project-based sub-boards.
Microsoft Teams also provides direct messaging, so we can
get the immediacy and directness of a text message or verbal conversation with
any of our co-workers at any time. This ensures consistent open lines of
communication, avoiding the communication breakdown that can sometimes occur
when teams work remotely for the first time.
Remote Work Without Sacrificing In-Person Meetings
Another tool we’re leveraging more than ever is Zoom
Meetings. We’ve used Zoom for several years to interact with clients and team
members who were out-of-office, but now it’s an application that’s allowing us
to continue our practice of face-to-face meetings.
When people have to look presentable and make eye contact
with each other, it builds that invested professionalism that powers remote
work and prevents the tune-out that eConferencing sometimes invites. After just
a couple of meetings, we were impressed how readily our brains accepted this as
the new norm, and we found that we were recreating the same exhilarating
atmosphere that powers our usual in-office meetings.
Maintaining the Team Connection & Spirit
Doing great work as a group of remote employees isn’t just
about coming together to “work,” though; it’s also about building on the great
team we’ve already created and continuing that culture in new, authentic ways. As
we’ve always said, when people feel like they’re part of a great culture, they
do great work. The same goes for either full-time or ad-hoc remote employees.
Creating a Shared Work Experience
The COVID-19 pandemic has created a variety of awesome new home
workspaces for members of the Launchways team, and we’ve had a lot of fun
sharing them with each other. We’ve added a board with pictures of all our new
“offices” so we can visualize each other’s experiences, get a powerful sense of
the human side of this moment, and have a few laughs along the way.
Launchways Account Executive, James Miller, shared a snapshot of his brand new home office in the wake of the COVID-19 social distancing.
Company Care Packages
After we saw our team member’s awesome at-home offices, we
wanted to make sure everybody felt like their work was connected to our team
and shared purpose, even if they were in sweats sometimes. That’s why we sent
everybody a care package containing Launchways-branded hoodies and t-shirts! We
felt it was important to reach out to everybody in a fun, human way that
reminds everybody that we all have more than one thing in common and we’re all
in this together.
Friday Happy Hours
Employers don’t talk about this enough, but the social side
of work is just as important to people’s sense of accomplishment, community,
and mental health as coming together to do great work, earn a living, and
continue to keep each other and our families healthy.
That’s why we’re creating an online “Zoom Happy Hour” for
Launchways employees each Friday. During this time, team members are encouraged
to jump on an all-team video chat and enjoy drinks together, while still safely
practicing social distancing. We’re looking forward to relaxing together,
enjoying a cocktail, and sharing a snack from the safety of our own home
offices.
Takeaways
We’re still in the relatively early days of the COVID-19
response, and there’s a lot of work to do moving forward. At this time,
however, it’s important to have a strategy in place to address remote work
enablement and employee communication. Remember:
Work enablement requires a communication framework
that allows whole-group communication, team-specific discussions, and
one-to-one conversations on the same platform
We’re finding success with Microsoft Team for
text-based communication and document sharing and Zoom for video chat remote
meetings
Managing and maintaining a remote team for
long-term success needs to address the human side of work as well and connect
people in fun, authentic social ways
The ongoing COVID-19 outbreak has many businesses rethinking
their operations in the near future. Due to global economic panic and
productivity interruptions from the illness, many organizations are faced with
downsizing, at least temporarily, in order to weather the storm.
One of the biggest questions for HR and business leaders
right now is whether it’s best to lay employees off or furlough them during
this tough time. The differences between the two classifications are subtle,
but they can mean the world of difference when it comes to benefits and
unemployment accessibility.
In this post we’ll:
Define “layoff” & “furlough”
Describe the specific differences between the
two
Explore how layoffs & furloughs affect
employees & employers differently
What is a Layoff?
Layoffs are employee terminations necessitated by business
need. Layoffs are not related to employee performance (compared to being
“fired”) but rather the need to streamline operations.
When employees are laid off, their jobs are often eliminated
from the organizational depth chart and their responsibilities get assigned to
others.
For some layoffs (such as those being necessitated by
COVID-19), employers may provide a reassessment window during which the
laid-off employee would have the first opportunity to return to their position
when/if it becomes feasible from a business standpoint again.
What is a Furlough?
A furlough is a forced worked reduction. Employers inform
their teams that there is limited or no work for them for the time being,
creating a de facto unpaid vacation. A furlough can apply to company-wide
operations or specific teams, departments, etc.
During a furlough, workers are not terminated, but their
jobs are effectively put on hold.
What’s the Difference from the Employer’s Perspective?
What Do Layoffs & Furloughs Mean from an HR Function Standpoint?
When you lay an employee off, they must go through your
entire offboarding process as dictated by your HR policies and procedures.
Furloughing employees requires documentation and clear, written notice, but with the right
communication framework and HR tools in place, there’s less work up-front
per employee compared to a layoff.
What Do Layoffs & Furloughs Mean from an Employer Branding Standpoint?
Any mass separation event has the potential to disrupt your
employee culture and perception in the marketplace, which makes strategy
additionally important.
Furloughs send the message that you know you’ve built the
right team – it’s just not the right moment to do great work together. When you
lay employees off, on the other hand (even in the case of a softer layoff with
a reassessment window), you’re essentially telling them that as it stands, their
position is no longer viable within your organization.
That doesn’t mean furloughs are always preferable by any
means, as stringing workers along for extended periods of time without delivering
appropriate updates or adhering to set timetables can also damage your
reputation. If your business is in a critical situation and you don’t believe
you will be able to offer the same jobs in the future, layoffs may be a better
situation.
What FLSA Says About Exempt Workers
The Fair Labor Standards Act dictates that exempt workers
(salaried professionals) must be paid their full salary during any week during
which they perform any work duties. This means that asking a furloughed
executive to take a phone call or check an email can cost you a week of pay or
create a potential pay dispute/compliance issue.
Which is Better for Employers: Layoffs of Furloughs?
The honest answer is that neither approach is ideal, and which
is the right option will depend on your business’s specific situation and
goals.
If you believe you have future business potential but it’s
just not the right time to do business in this moment, furloughs can encourage
your core employees to stay together and maintain their team spirit as they
weather the storm. If you know current events will fundamentally reshape your
opportunity to continue work the way you’ve been doing it, layoffs provide a more
formal, change-minded approach to business moving forward.
What’s the Difference from the Employee’s Perspective?
How Can Laid Off Employees Support Themselves & Their Families?
When employees are laid off, they can generally continue to
receive benefits through COBRA for a set period of time. Once that window ends,
though, they need to find a new employer to sponsor them or purchase their own
coverage.
Employees that have been laid off are also eligible for
unemployment benefits, so there is a safety net in place.
How Can Furloughed Employees Support Themselves & Their Families?
Furloughed employees are entitled to unemployment during the
time they are not working. A good best-practice to recommend to all furloughed
employees that they apply for unemployment benefits immediately.
Furloughed employees are also entitled to their existing
employee benefits through their current stability period as defined by the ACA,
but their furloughed status can impact plan eligibility for the next window.
Which is Better for Employees: Layoffs of Furloughs?
Again, there is no single right answer here.
Although it sounds counter-intuitive, layoffs can ultimately
be more worker-friendly than furloughs, as they create more direct access to
social services. At the same time, however, in a scenario where employees
believe they are part of a strong, functional team and are able to survive
without pay or the guarantee of unemployment benefits, being furloughed offers
the hope of a return to normalcy down the line.
Key Concept: Three Key Differences Between Furloughs and Layoffs
Furloughed employees have an expectation that
they will return to work. Typically, an employer will give furloughed employees
either a specific date or a specific condition for resuming duties.
Furloughed employees typically retain their
benefits. That is, employees usually retain access to any health and life
insurance during the furlough.
Laying off employees requires an extensive
process of offboarding employees and paying out accrued PTO. Additionally, once
needed, re-hiring for those positions can be time intensive. On the other hand,
a furlough is more seamless. Furloughed employees can come and go fairly easily
with less administrative burden.
Key Takeaways
With many businesses pondering shutdowns or major
operational reductions in the coming weeks, layoffs and furloughs are set to
affect an incredible number of professionals around the United States.
As an employer, it’s your responsibility to handle this
process in an employee-friendly way that provides an honest vision for each
employee’s future and allows them to react and plan in ways that maximize their
ability to continue life as normal.
Remember:
A layoff is a termination
Layoffs can be temporary with a built-in
reevaluation period
A furlough is a mandatory work reduction
Furloughs and layoffs both allow employees to
maintain health coverage for a set time
Furloughing exempt workers like executives is more
complex because any work done results in an obligation to pay
No single approach is right for every situation,
it’s all about your company’s goal, your company culture, your belief in your
team, and your vision of how you’ll adapt to ongoing challenges
How to Learn More
During this challenging time, Launchways is offering a centralized hub of COVID-19 resources, templates, & policies. Use this bundle to enact your company’s response to the COVID-19 outbreak. The resource bundle includes:
The ongoing COVID-19 outbreak has caused significant
disruption for people and businesses alike. But while the challenges are very real,
they are made much worse by the amount of uncertainty and misinformation that
surrounds the outbreak. To combat the spread of misinformation, Launchways held
a comprehensive webinar on March 20th to help business leaders
understand the situation and create a comprehensive strategy that keeps their
business running and protects their team.
In the webinar, our panel of experts addressed major areas
of concern for business and HR leaders amid the COVID-19 crisis, including:
Understanding new legislative updates and how
they will affect human capital strategies
The critical human-resources best-practices you
should be following during this turbulent time
How this outbreak will affect employee benefits
offerings & processes including FMLA, STD, & COBRA
Meet The Panel
Heather Bailey
Heather is a partner in
SmithAmundsen’s Labor & Enforcement Practice Group and has practiced in
employment and labor counseling and litigation for 18 years. In addition
to her extensive experience in all things compliance and workforce, Heather is
a member of SmithAmundsen’s COVID-19 Task Force
and has been tackling COVID-19 issues for the firm’s clients and at the
firm itself.
Karina Castaneda
Karina is one of Launchways’ HR Client Success Managers and
is a seasoned HR practitioner with over 15 years of experience working in
employee relations, talent management, and benefits. She has been working
closely with Launchways’ HR clients to help them navigate the COVID-19 crisis.
Devon Bellamy
Devon is a benefits expert on the Launchways Employee
Benefits team. Recently he has been helping each client review their policies
to see how they can protect their employees during the outbreak.
Jim Taylor
Jim is the CEO and Founder of Launchways. He is a serial
entrepreneur and has founded and scaled several notable businesses. At
Launchways, Jim has spent over 10 years providing business counsel to clients,
helping business leaders make the best decisions to grow their businesses.
Understanding
Legislative Updates
Our panelists explored the nuances of how upcoming
legislation may affect small and medium-sized businesses in the months to come.
Special attention was paid to the pending COVID-19 Relief Bill and its impact
on several existing workforce regulations. Here are the major changes that were
addressed:
Family Medical Leave Act Expansion
The bill will require employers with fewer than 500
employees, as well as government employers, to provide up to 12 weeks of
protected leave for any employees who have to comply with a quarantine, care
for a family member in quarantine, or care for a minor whose school is closed
due to COVID-19. The first two weeks of leave may be unpaid but the rest must
be paid at 2/3 of the employee’s standard rate of pay. This expansion only
applies to employees who cannot work remotely. And companies with fewer than 50
employees may be exempt from the expansion, although that remains to be seen.
Emergency Paid Sick Leave Act
In addition to the Family Medical Leave provisions, the
COVID-19 Relief Bill requires small and medium-sized businesses to provide two
weeks of paid time off for several COVID-related issues including quarantine or
exposure.
Notably, Heather pointed out that employers can require
employees to work remotely rather than go on leave so long as they can work
remotely. The Emergency Paid Sick Leave Act only applies to employees who
cannot work remotely.
Employer Tax Credits
To ease the economic impact of the outbreak and the employee
protections, the government is poised to offer tax credits for employee wages
paid as a result of the changes to the FMLA and Emergency Paid Sick Leave Act
as well as sick leave credits for each day that employees are out on paid sick
leave. All of these tax credits are applied against employers’ Social Security
taxes.
The US Treasury Secretary is also being given broad
authority to help employers meet their financial obligations while they wait to
claim the tax credit to address cash flow concerns.
Human Resources
Best Practices
In addition to reviewing upcoming legislation, our panelists
examined human resources best-practices that employers should consider in light
of the COVID-19 outbreak. Three major topics of conversation included:
Enabling Remote Work
Karina drew upon her extensive human capital management
experience to weigh in on what is a very hot topic at the moment: how to enable
effective remote work.
Whenever possible, employers should encourage their team
members to work remotely to keep their business running without exposing
employees to the virus. Remote work is also the best way for companies to
minimize their FMLA and Emergency Paid Sick Leave Act expenses.
Karina laid out a three-step process for creating an
effective remote-work environment:
Determine who is eligible for remote work and
the reasons why they are eligible: Identifying who can work remotely will
help you develop your remote-work strategy, engage those stakeholders, and
justify the move to remote work
Identify and distribute necessary technology
and software: Many companies will have to distribute new technology and
roll out new software to help their teams work remotely. From laptops to
project management and communications software, you should figure out what your
suite will look like and create a strategy for getting the necessary tools into
your teams’ hands.
Facilitating Communication: Communication
is crucial for productivity and collaboration as you shift towards a
remote-work model. You not only need to ensure that standard touchpoints such
as weekly or daily all-hands stand-ups are maintained via video chat meetings
but you also need to implement a more proactive communications policy to
compensate for the physical disconnect within your team.
Protecting Employees at Work
While remote-work is the ideal solution during the COVID-19
outbreak, the fact of the matter is that not all employees or businesses can
work remotely. Karina outlined best-practices to protect employees when they
have to work in person, including:
Provide hygiene supplies such as hand soap and
tissues
Sanitize high-touch work surfaces to reduce the
risk of exposure
Arrange schedules to minimize employee interaction
Minimize face-to-face meetings
Understanding the Difference Between Layoffs and Furloughs
On the legal end of employment best-practices, Heather
explored the difference between layoffs and furloughs as strategies to reduce
labor costs during the outbreak. While most employers will want to maintain
their teams to the best of their abilities, many will have to reduce their
workforce as the outbreak continues to take a toll on the business community.
As Heather explained, layoffs are permanent termination
events that could leave employers understaffed once the outbreak subsides or
expose them to retaliation or discrimination lawsuits down the road. Plus,
employers generally have to pay out any accrued PTO at termination, so layoffs
could result in significant short-term workforce costs.
On the whole, employers are increasingly opting for
temporary furloughs that maintain the employment relationship but render
employees eligible for unemployment insurance benefits. While usually
associated with government shutdowns, furloughs are a useful tool to help
employers stay afloat during the outbreak while keeping their team intact once
business returns to normal.
How the COVID-19
Outbreak Affects Employee Benefits
Devon explored the issues that Launchways clients are facing
regarding employee benefits and the best practices that have helped them
navigate the situation.
The best practices he reviewed included:
Make sure employees have appropriate access to
care, whether for COVID-19 or other health concerns
Understand how your employee health insurance
covers and responds to COVID-19
Know if you can extend COBRA or State
Continuation in the case of an extended furlough
Understand and inform your team on employee
rights on disability, unemployment, workers compensation, and more
Devon then outlined enhanced benefits that most insurance
carriers have added to their plans in light of the outbreak:
Free COVID-19 testing in-network
$0 copays for telemedicine
Free home delivery for prescriptions
Key Takeaways
In the 75-minute webinar, our panelists explored the
ins-and-outs of managing the COVID-19 outbreak as a growing business. They
explained how to tackle the dual-priorities of protecting your workforce and
keeping your business running from the three angles of:
Adapting to new legislation
Managing your workforce by encouraging remote
work, protecting non-remote workers, and reducing workforce costs without
causing unnecessary harm or expenses
Understanding how the outbreak affects employee
benefits and keeping employees apprised of the changes
The panel discussion was in-depth and nuanced: there’s no way that we can capture all of the lessons that the four experts shared during the webinar in a single blog article. That is why we have made the entire webinar available to watch for free, stream the full webinar on-demand now.
The Families First Coronavirus Response Act was signed into law on March 18, 2020.
In the coming days and weeks, federal regulatory agencies, including the Department of Labor (DOL) and Health and Human Services (HHS), will provide guidance on how to execute or implement the new requirements. In the meantime, employers and advisors must rely on a good faith interpretation of the act’s text.
Summary
For certain circumstances related to COVID-19, employees will be eligible for:
Up to two weeks of sick leave (full pay for self, 2/3 pay for family care) for illness, quarantine, or school closures.
Up to 12 weeks of Family and Medical Leave Act (FMLA) leave for school closures (10 days unpaid and then up to 10 weeks at 2/3 pay).
Effective Date of Law
The FMLA and Paid Sick Leave sections discussed below will go into effect on April 1, 2020 and expire December 31, 2020.
It appears there is no retroactive application.
Key Elements for Employers
FMLA expansion
Paid sick leave
Payroll tax credit
Group health plan benefit mandate
Emergency FMLA Expansion
Covered Employers: Employers with fewer than 500 employees are covered.
Covered Employees: Any employee who has been employed for at least 30 calendar days, though employers can choose to exclude employees who are health care providers or emergency responders.
Covered Leave Purposes: To care for a child under 18 of an employee if the child’s school or place of care has been closed, or the childcare provider is unavailable, due to a public health emergency, defined as an emergency with respect to the coronavirus declared by a federal, state, or local authority.
Duration: Up to 12 weeks of job-protected leave.
Compensation:
No pay for first 10 days of leave (other paid time off, and emergency sick leave under the FFCRA, may be applied).
After 10 days, employers must pay two thirds of the employee’s regular rate of pay for the number of hours they would normally be scheduled to work, capped at $200/day and $10,000 total.
Reinstatement to Position after Leave:
The same reinstatement provisions apply as apply under the traditional FMLA. However, restoration to position does not apply to employers with fewer than 25 employees if certain conditions are met:
The job no longer exists because of changes affecting employment caused by an economic downturn or other operating conditions that affect employment caused by a public health emergency; and
The employer makes reasonable efforts to return the employee to an equivalent position, and makes efforts to contact a displaced employee if anything comes up within a year of when they would have returned to work.
Note: The act reserves the right for the Secretary of Labor to exclude certain care providers and first responders from the list of eligible employees and to exempt small businesses with fewer than 50 employees if business viability is jeopardized.
Emergency Paid Sick Leave
Covered Employers: Employers with fewer than 500 employees.
Covered Employees: All employees (no matter how long they have been employed), though employers may be able to exclude employees who are health care providers or emergency responders.
Covered Leave Purposes:
When quarantined or isolated subject to federal, state, or local quarantine/isolation order;
When advised by a health care provider to self-quarantine (due to concerns related to COVID-19);
When experiencing symptoms of COVID-19 and seeking a medical diagnosis;
When caring for an individual doing #1 or #2 (2/3 pay);
When caring for a child whose school or place of care is closed due to COVID-19 (2/3 pay); or
When the employee is experiencing any other substantially similar condition (2/3 pay).
Duration of Leave:
Full time employees are entitled to 80 hours of paid sick leave.
Part time employees are entitled to sick leave equal to the amount of hours worked on average over a typical two-week period.
Rate of Pay:
Sick leave must be paid at the employee’s regular rate of pay for leave used for the employee’s own illness, quarantine, or care.
Sick leave must be paid at two-thirds of the employee’s regular rate if taken to care for a family member or to care for a child whose school has closed, or if the employee’s childcare provider is unavailable due to the coronavirus.
Pay is capped at $511/day and $5,110 total for reasons 1, 2, and 3 described above.
Pay is capped at $200/day and $2,000 total for reasons 4, 5, and 6 described above.
Interaction with Other Employer-Provided Paid Sick Leave and other Paid Leave:
This act does not pre-empt existing state and local paid sick leave requirements.
Employers cannot require employees to use other leave first.
Sick leave provided for under the act does not carry over from year to year, and the requirements expire December 31, 2020.
Notice Requirements:
Employers must post a model notice, which will be provided by the federal government.
Note: The act reserves the right for the Secretary of Labor to exclude certain care providers and first responders from the list of eligible employees and to exempt small businesses with fewer than 50 employees from providing paid leave for child care if business viability is jeopardized.
Payroll Tax Credit
Applies to both the emergency FMLA expansion and the emergency sick leave.
Dollar for dollar credit for sick leave and paid FMLA wages against the employer portion of Social Security taxes.
Refund is possible for amounts that exceed what is available as a credit.
Limits on what can be claimed mirror the caps for what must be paid.
Health Plan Benefit Mandate
The act requires all insured and self-funded medical plans, including grandfathered plans, to cover diagnostic testing-related services for COVID-19 at 100 percent without any deductibles or co-pays.
Examples include services provided by doctors, emergency rooms, and urgent care centers leading up to the decision that testing is needed, along with the actual lab-based testing.
FFCRA Payroll Tax Credit — Easing the Burden for Employers
On Friday, March 20, the U.S. Treasury, IRS, and U.S. Department of Labor announced their plans for making the paid leave provisions in the Families First Coronavirus Response Act (FFCRA) less burdensome for small businesses. Key points include:
To take immediate advantage of the paid leave credits, businesses can retain and access funds that they would otherwise pay to the IRS in payroll taxes. If those amounts are not sufficient to cover the cost of paid leave, employers can seek an expedited advance from the IRS by submitting a streamlined claim form that will be released next week.
The Department of Labor will release “simple and clear” criteria for businesses with fewer than 50 employees to apply for exemptions from the leave provisions related to school and childcare closures; and
There will be a 30-day non-enforcement period for businesses making a reasonable effort.
We know that for many of our clients, business slowdowns related to the spread of COVID-19 have made it hard to imagine how they could bear any additional expenses. We encourage anyone with these concerns to read the linked announcement carefully.
Including the information in the link above, this is all we currently know about the payroll tax credit under the FFCRA and how to access or administer it. We will update Comply as soon as new information or guidance is available. You can learn more about the details of the leaves (who is covered, what it’s for, duration, etc.) in the materials on this page.
COVID-19 and Flexibility in Mandatory, In-Person Signatures
Form I-9
On March 20, 2020, the Department of Homeland Security announced that effective immediately, the physical presence requirement of the Employment Eligibility Verification, Form I-9, has been temporarily suspended for employers and workplaces that are operating remotely due to COVID-19 related precautions. In other words, employers with employees taking physical proximity precautions due to COVID-19 (and operating remotely) are not required to review the employee’s identity and employment authorization documents in the employee’s physical presence.
The physical presence requirement that was temporarily suspended mandated that employers, or an authorized representative, physically examine, in the employee’s physical presence, the unexpired document(s) the employee presents from the Lists of Acceptable Documents to complete the Documents fields in Form I-9’s Section 2.
Employers must also be aware of the following regarding the temporary suspension:
If there are employees physically present at a work location, then in-person verification of identity and employment eligibility documentation for Form I-9 continues to be required. However, if newly hired employees or existing employees are subject to COVID-19 quarantine or lockdown protocols, DHS will evaluate this on a case-by-case basis.
Employers may designate an authorized representative to act on their behalf to complete Section 2 and may be any person the employer designates to complete and sign Form I-9 on their behalf. However, employers are liable for any violations in connection with the form or the verification process, including any violations in connection with the form or the verification process, including any violations of the employer sanctions laws committed by the person designated to act on the employer’s behalf.
Form I-9, Section 2 Documents Must Be Inspected Remotely
Employers must still inspect the Section 2 documents but may do so remotely (for instance, over video link, fax or email). Employers must also obtain, inspect, and retain copies of the documents they inspect, within three business days so as to complete Section 2. Employers are also directed to:
Enter “COVID-19” as the reason for the physical inspection delay in the additional information field of Section 2 once physical inspection takes place after normal operations resume; and
Add “documents physically examined,” with the date of inspection to either the additional information field of Section 2 or to section 3 (as appropriate) once the documents have been physically inspected.
Employers may implement remote document inspections until May 19, 2020 (“up to 60 days from the date of the announcement”) or within three business days after the termination of the National Emergency, whichever comes first. Importantly, employers who implement remote onboarding and telework policies must provide documentation for each employee. This burden rests solely with the employers.
In-Person Verification Required After Normal Operations Resume
Once normal operations resume, all employees who were onboarded using remote verification must report to their employer within three business days for in-person verification of identity and employment eligibility documentation they presented for their Form I-9. Once the documents have been physically inspected, the employer should add “documents physically examined” with the date of inspection to the Section 2 additional information field or to section 3, as appropriate.
Any audit of subsequent Forms I-9 would use the “in-person completed date” as a starting point for these employees only.
Extension on Inspections
Effective March 19, 2020, any employers who were served Notice of Inspections (NOI) by DHS during the month of March 2020 and have not already responded will be granted an automatic extension for 60 days from the effective date. At the end of the 60-day extension period, DHS will determine if an additional extension will be granted.
Employers are required to monitor the DHS and ICE websites for additional updates regarding when the extensions will be terminated, and normal operations will resume.
USCIS and Benefits Forms
On March 20, 2020, the U.S. Citizenship and Immigration Services (USCIS) announced that it will accept all benefit forms and documents with reproduced original signatures, including the Form I-129, Petition for Nonimmigrant Worker, for submissions dated March 21, 2020, and beyond. This flexibility is in response to the ongoing COVID-19 National Emergency. This means that a document may be scanned, faxed, photocopied, or similarly reproduced provided that the copy must be of an original document containing an original handwritten signature, unless otherwise specified.
For forms that require an original “wet” signature, per form instructions, USCIS will accept electronically reproduced original signatures for the duration of the National Emergency. This temporary change only applies to signatures. All other form instructions should be followed when completing a form. Individuals or entities that submit documents bearing an electronically reproduced original signature must also retain copies of the original documents containing the “wet” signature. USCIS may, at any time, request the original documents, which if not produced, could negatively impact the adjudication of the immigration benefit.
SBA Disaster Assistance in Response to COVID-19
The U.S. Small Business Administration (SBA) is offering designated states and territories low-interest federal disaster loans for working capital to small businesses suffering substantial economic injury as a result of the Coronavirus (COVID-19). Upon a request received from a state’s or territory’s Governor, SBA will issue under its own authority, as provided by the Coronavirus Preparedness and Response Supplemental Appropriations Act that was recently signed by the President, an Economic Injury Disaster Loan declaration.
IRS, Coronavirus (COVID-19), and High-Deductible Health Plans
On March 11, 2020, the Internal Revenue Service (IRS) released Notice 2020-15 for high deductible health plans and expenses related to 2019 novel coronavirus (COVID-19) stating that, until further guidance is released, a health plan that otherwise satisfies the requirements of a high deductible health plan (HDHP) under I.R.C. § 223(c)(2)(A) will not fail to be an HDHP merely because it provides health benefits associated with testing for and treatment of COVID-19 without a deductible, or with a deductible below the minimum deductible (self only or family) for an HDHP. Therefore, an individual covered by the HDHP will not be disqualified from being an eligible individual under § 223(c)(1) who may make tax-favored contributions to a health savings account (HSA).
This does not modify previous guidance with respect to the requirements of an HDHP in any manner other than with respect to the relief for testing for and treatment of COVID-19. Vaccinations continue to be considered preventive care under § 223(c)(2)(C) for purposes of determining whether a health plan is an HDHP. Rather, the notice provides flexibility to HDHPs to provide health benefits for testing and treatment of COVID-19 without application of a deductible or cost sharing. Individuals participating in HDHPs or any other type of health plan should consult their particular health plan regarding the health benefits for testing and treatment of COVID-19 provided by the plan, including the potential application of any deductible or cost sharing.
