Tag: sick leave

COVID-19 Leave

Congress: Some Employers Must Give Paid COVID-19 Leave

On March 18, 2020, Congress passed and President Trump signed the Families First Coronavirus Response Act. This legislation includes an Emergency Paid Sick Leave Act and amendments to the Family and Medical Leave Act, along with corresponding tax credits. These provisions give some employees the right to up to 12 weeks of paid leave related to the public health emergency caused by the novel coronavirus. These COVID-19 leave entitlements will be in place beginning April 2, 2020, and end December 31, 2020.

Emergency Paid Sick Leave

The Emergency Paid Sick Leave Act gives employees the right to take up to 80 hours (less for part-time employees) for certain COVID-19 related conditions.

This sick leave is in addition to any other sick leave available to employees under employer plans or other laws. Employers cannot require employees to use other forms of paid leave before this emergency paid sick leave.

Covered Employers

The law applies to all public (governmental) employers and private employers with fewer than 500 employees.

However, employers of health care providers or emergency responders can choose to excuse those employees from the sick leave requirements.

The law also gives the Secretary of Labor the right to issue regulations that further limit the coverage, including:

  • to exclude health care providers and emergency responders; and
  • to exempt small businesses with fewer than 50 employees from the requirement to provide paid sick leave to employees to care for children whose schools are closed or child care is unavailable.

Hopefully, the Department of Labor will issue any such regulations before April 2nd.

Qualifying Conditions

Employees of covered employees can take sick leave when the employee is:

  1. subject to a Federal, State, or local quarantine or isolation order related to COVID-19;
  2. advised by a health care provider to self-quarantine due to concerns related to COVID-19;
  3. experiencing symptoms of COVID-19 and seeking a medical diagnosis;
  4. caring for an individual who is subject to a quarantine or isolation order;
  5. caring for a son or daughter if their school has been closed or their child care provider is unavailable due to COVID-19 precautions; and
  6. experiencing any other substantially similar condition specified by the Secretary of Health and Human Services in consultation with the Secretary of the Treasury and the Secretary of Labor.

Duration of Leave

Full-time employees will be eligible to take up to 80 hours of paid sick leave for the above circumstances.

Part-time employees can take up to the average number of hours they work in two weeks

The law does not clarify who qualifies as a full- vs. part-time employee. However, it seems like anyone who averages 40 hours or more could take up to 80 hours of leave. Employees who average less than that would get the number of hours they average in two weeks.

For part-time employees whose hours vary, employers should calculate the average number of hours the employee was scheduled to work over the past 6-months (dating back from the start of the paid sick time). Or if the employee didn’t work in the past 6 months, use the employee’s reasonable expectation of hours at the time of hiring.

Amount of Pay

Employers must pay employees on paid COVID-19 sick leave based on their “regular rate of pay” under the FLSA (assuming it is above minimum wage). There is some uncertainty about exactly what that would mean in the case of employees who receive compensation beyond base hourly and salary rates. For example, some non-discretionary bonuses and commission payments apparently would need to be factored in.

Employees will receive 100 percent of the lost wages as so determined when the leave is based on the employee’s own health situation (conditions 1-3 above). When the leave is to care for others (conditions 4-6 above), the employee will receive two-thirds of that amount.

Sick leave pay under the law is capped at $511 per day ($5,110 total) when the leave is based on the employee’s own health situation (conditions 1-3 above). The cap is lower, $200 per day ($2,000 total), when the employee needs to care for others (conditions 4-6 above).

Additional Conditions

Before the law takes effect, the Department of Labor will issue a model notice for employers to post. The notice will advise employees of the requirements of the Emergency Paid Sick Leave Act.

Employers who do not provide the required paid sick leave will be liable for the unpaid leave benefits plus additional penalties available for violations of the Fair Labor Standards Act.

Employers may not discriminate against employees who take paid sick leave related to COVID-19 or require employees to find coverage for their shifts.

The law only stays in effect until December 31, 2020. Thus, not surprisingly, there is no carryover of unused paid sick leave. Employers do not have to pay out unused leave under this law upon separation from employment.

Emergency Family and Medical Leave Expansion Act

This legislation temporarily amends the FMLA only until December 31, 2020. While in effect, it provides a combination of paid and unpaid leave related to COVID-19 issues.

Covered Employers

The pre-existing FMLA unpaid leave requirements effectively only apply to employers with at least 50 employees. The new COVID-19 leave provisions will apply to private (non-government) employers with less than 500 employees, as well as all government entities.

The law also gives the Secretary of Labor the right to issue regulations that further limit the coverage, including:

  • to exclude health care providers and emergency responders; and
  • to exempt small businesses with fewer than 50 employees when the imposition of the new requirements would jeopardize the viability of the business as a going concern.

It also appears employees generally can’t sue employers with less than 50 employees for coronavirus-related FMLA violations. But the U.S. Department of Labor presumably could still enforce the law against them if it doesn’t adopt an applicable exemption.

Covered Employees

The FMLA has previously only afforded leave to employees who have been employed with their current employer for at least a year. The employee must also have worked for at least 1250 hours in the past 12-months and work within 75 miles of at least 50 other employees of their employer.

The new COVID-19 leave provisions will apply to all employees of covered employers who have been with the organization for at least 30 days.

Note that these amendments do not change the coverage and eligibility requirements for the standard FMLA leave categories.

Employers may choose not to permit employees who are health care providers or emergency responders to take this form of FMLA leave.

New COVID-19 Leave Category

For the rest of 2020, the FMLA will allow up to 12 weeks of leave “because of a qualifying need related to a public health emergency.”

This leave is limited to a situation where an employee is unable to work or telework because of a need to care for their minor child whose school or place of care has been closed or their child care provider is unavailable due to a declared COVID-19 emergency.

Employees who experience coronavirus symptoms or need to care for a family member with a serious health condition related to COVID-19 may still be eligible for leave under pre-existing FMLA provisions. However, they will not qualify under this new category. As a result, they will not be eligible for paid FMLA leave. Nor will they be eligible unless they meet the broader employer and employee coverage requirements that still apply to the other leave circumstances.

Any time taken for this new form of leave will apply toward the 12 weeks of total annual leave that a qualifying employee can take under the FMLA.

Paid FMLA Leave Related to COVID-19

The first two weeks (10 days) of leave taken to care for children out of school can be unpaid. Employees have the right to use any other accrued vacation, personal, medical, or sick leave during that time. In some cases, that will include the new emergency sick leave discussed above.

After the first 10 days, the employer must pay employees for additional leave up to the 12 weeks allowed.

Employers must pay at least two-thirds of the employee’s regular rate of pay (as discussed above regarding paid sick leave). However, the paid FMLA leave cannot exceed $200 per day or $10,000 total for an employee.

Reinstatement Rights

In some cases, employees who take this new form of FMLA leave will have different job restoration rights than those using other types of FMLA leave.

Employers with less than 25 employees do not have to allow an employee to return to work from leave taken to care for children whose schools are closed if:

  • the position no longer exists due to economic conditions or other changes in operating conditions of the employer that affect employment and are caused by a COVID-19 public health emergency during the leave;
  • the employer makes reasonable efforts to restore the employee to an equivalent position with equivalent pay and benefits; and
  • if the employee could not be initially reinstated to an equivalent position, the employer makes reasonable efforts to contact the employee if an equivalent position later becomes available.

Tax Credits

The Families First Coronavirus Response Act includes tax credits to enable private (non-government) employers to recoup their costs of providing these new forms of paid COVID-19 leave.

First, employers will obtain a credit against their quarterly payroll taxes equal to the full amount of wages paid under the Emergency Paid Sick Leave and the Emergency Family and Medical Leave Expansion Act. If the credit exceeds the amount of taxes due from an employer, the employer will receive a refund in the amount of any excess credit. The IRS should issue further guidance regarding these tax credits.

Second, employers will not pay the 6.2% payroll tax on the wages they pay to employees as sick leave or paid family leave to satisfy these new requirements.

Employers should consult with their tax advisors for more details on the potential tax implications in their specific situations.

Next Steps for Employers

Public employers and private employers with less than 500 employees must start planning for compliance with these new requirements by April 2, 2020. If nothing else, most schools are or will be closed between now and then. This reality will give many employees the basis for FMLA leave.

We expect additional guidance from the Department of Labor. One big question is which additional employers and employees will be exempt from coverage. Ideally, we will have these answers before employers must start complying with the law. But employers cannot rely on any delays in regulations to put off compliance.

Eventually, employers will have to post a notice regarding the new paid sick leave requirements. New FMLA notices and other related documents will likely also be necessary. Again, it would be best for the DOL to provide these quickly. However, that might prove challenging under current circumstances.

 

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Hiring First Employee New York

Hiring Your First Employee in New York

There are three general scenarios for a business hiring its first employee in New York State:

  1. A New York-based business is hiring its first employee overall.
  2. A company that already has one or more employees in another state is hiring its first employee in New York.
  3. A foreign company is hiring its first U.S. employee, who will work in New York.

I have represented employers in all of these scenarios. Some of the issues are the same across the board. Others differ.

This post gives an overview of the considerations in each of the situations above. As always, don’t rely entirely on this blog to guide your hiring process. You should seek legal and other assistance to ensure compliance.

First Employee Overall

Some businesses start out with employees. Others are run entirely by the owner(s) until they decide to hire someone to help run the business. Either way, once the first non-owner comes on board, the business (or its owner(s) personally) becomes an employer. Having employees can be great for many reasons, but being an employer imposes many new requirements.

As an employer, you now (in most cases) have to get several kinds of mandatory insurance: workers’ compensation, unemployment, and (in New York) disability. Failure to immediately obtain these insurance coverages can result in significant liability.

Other forms of employee insurance are technically optional. This includes health insurance and life insurance. Many small employers do not provide these benefits, but many others do. Unless you have to offer these to attract the employees you’re trying to hire, these benefits should not be your first concern. Get the statutorily required insurances first. And make sure you comply with the various other notice and recordkeeping requirements that now apply to your business.

Once you are an employer, you also become subject to various notice posting requirements. For example, all employers must post information in the workplace about minimum wage and overtime requirements. Some posting requirements depend on the number of employees you have, either in the state, in the United States, or overall. All of the required notices are probably available online through the various enforcement agencies, but many employers purchase posters from private vendors. In either case, you must ensure that you have all of the necessary (and current) postings up based on your size and location(s).

First Employee in New York

Even if your company already has employees in other U.S. states, New York has its own specific requirements. If you have an employee based in New York, you probably have to satisfy most of these to avoid potential liability.

Insurance

This includes obtaining the disability insurance coverage mentioned above. Whereas most states require workers’ compensation insurance, New York is one of only five states that require this coverage. It provides partial compensation for employees unable to work based on a non-work illness/injury. (California, Hawaii, New Jersey, and Rhode Island have similar requirements.)

Wages

New York also has specific wage notice requirements. Basically, each employee in New York must receive written notice of certain information about their employer and their compensation. The employee must sign and return a copy, and the employer must retain the copy in its files. Moreover, if the employee’s primary language is one other than English, the notice may have to be provided in that language. Finally, changes in compensation or company information may require employers to give employees new notices. I have discussed New York’s wage notice requirements in more detail here.

Upon hiring an employee in New York, you must also notify the state that you have done so. More information about that requirement/process can be found here.

Policies

In the past couple of years, New York has also add written employee policy requirements for the first time. All employers must provide every employee with a copy of a written sexual harassment prevention policy and a paid family leave policy. New York employers must also provide annual sexual harassment prevention training to all employees. New hires must receive a copy of the sexual harassment training materials at the time of hire.

There are some requirements that depend more specifically on where within New York the employee works. Most of these relate to employees in New York City. For example, New York City has a paid sick leave law that requires employers to notify employees of their sick leave rights.

First Employee in the United States

There are some requirements that will apply to all employees in the United States, whether in New York or another state.

Employers must obtain and retain a completed I-9 form for each employee hired after November 6, 1986. This form confirms the individual’s eligibility to work in the United States. In addition to providing information on the form, employees must show documentation establishing their right to work. This may include drivers’ licenses, passports, social security cards, visas, etc. Allowing an employee to work without completing the form in the first 3 days of employment creates significant legal exposure under U.S. immigration laws.

Employees should also complete a W-4 form to enable the employer to make appropriate tax deductions from their compensation. Many states also impose income taxes, and may have their own employee withholding form. For example, New York’s IT-2104 form is available here. Failure to properly deduct income taxes can create problems for both the employer and the employee.

Finally, the Fair Labor Standards Act establishes both a minimum wage (currently $7.25 per hour) and overtime requirements (generally time and half pay for hours worked beyond 40 in a week). Many states, including New York, have similar laws that may impose higher wage requirements (as is currently the case in New York). Some employees, however, are exempt from minimum wage and/or overtime pay requirements. Be sure you know how these (extremely complicated) laws affect your employee(s) before bringing them on board.

Don’t Stop Here

If you are hiring your first employee in New York (or anywhere else), make sure you thoroughly consider all of the legal and financial implications.  They are not all mentioned here, but hopefully this is a good place to start. Most business owners should speak to both an accountant and an employment lawyer before adding employees. This is definitely a situation where being proactive can save you considerably in the long run.