On March 27, 2020, the $2 trillion Coronavirus Aid, Relief, and Economic Safety (CARES) Act was passed by the House of Representatives and signed into law by President Trump as the largest emergency aid bill in history. The CARES Act significantly expands unemployment benefits and comes on the heels of 3.3 million Americans having applied for unemployment benefits last week. In California specifically, there were 186,809 claims for unemployment benefits to the Employment Development Department last week.

The CARES Act includes a temporary Pandemic Unemployment Assistance program that is fully funded by the federal government. The assistance applies retroactively to January 27th and extends through December 31st, with a maximum of 39 weeks of assistance (inclusive of weeks when the employee received extended benefits or regular compensation). Individuals who are receiving paid sick leave or other paid leave benefits and those that can work remotely with pay are excluded from the program.

The program expands unemployment insurance to those who do not typically qualify, including gig economy workers who are classified as independent contractors and self-employed individuals. Specifically, benefits will be provided to any person who is unemployed or partially unemployed due to any of the following:

  • The individual has received a COVID-19 diagnosis, or is experiencing symptoms and seeking a medical diagnosis;
  • A member of the individual’s household has been diagnosed with COVID-19;
  • The individual is providing care for a family member or household member who has been diagnosed with COVID-19;
  • The individual is the primary caregiver for a another person in the household who is unable to attend school or another facility due to COVID-19;
  • The individual is unable to reach the workplace because of a quarantine imposed due to COVID-19;
  • The individual was scheduled to begin work, but could not do so because the place they were scheduled to begin work at has been shut down due to COVID-19;
  • The individual lives in a household where the head of household died directly due to COVID-19;
  • The individual’s workplace has been closed because of COVID-19.

Individuals who are furloughed, but have not fully been laid off, are also eligible for unemployment benefits.

Every individual receiving unemployment benefits will be provided $600 per week, in addition to the weekly benefit amount authorized under state unemployment compensation law, for up to four months. Additionally, the program provides an extra thirteen weeks of federally funded unemployment benefits through the end of the year to assist individuals who remain unemployed after state unemployment benefits are no longer available.

For the standard unemployment benefits that the state remains responsible for, the federal government will provide payments to the state to reimburse government agencies, nonprofits, and Indian tribes for fifty percent of the costs they incur through the end of the year to pay unemployment benefits. For those states that decide to pay recipients of unemployment benefits as soon as they become unemployed, rather than waiting a week, the federal government will provide funding to pay the first week of unemployment benefits. This is applicable in California, as Governor Newsom has waived the first week waiting period, meaning that people will receive a full two weeks of benefits on their first unemployment benefits check, as opposed to one week. Further, for those states that offer “short-term compensation” programs for employees who have their hours reduced, California being one of them, the federal government will pay one hundred percent of the costs incurred by the state through the end of the year.

The attorneys at Weintraub Tobin continue to wish you and your families good health during these difficult times. Please feel free to reach out to one of us if you have any questions regarding this expansion of unemployment benefits and how that may relate to your workforce.

 

Earlier this week, we advised you that the US Department of Labor had issued a Question & Answers webpage that addressed some issues arising out of the passage of the FFCRA, most importantly clarifying that it would become effective on April 1, 2020. (Click here.) Yesterday, the DOL updated that “Questions and Answers” webpage and added more than 25 new questions and answers regarding various issues under the FFCRA for both employers and employees. Here is a summary of the various issues addressed by the updated Q&A page:

  • Clarifies that the FFCRA creates a new paid leave as of April 1st and does not apply retroactively:
    • Employees are not entitled to FFCRA leave if:
      • Employer has closed work site and/or furloughed employee prior to April 1; 2020; or
      • Employer closes work site and/or furloughs employee after April 1, 2020 but before employee has started FFCRA leave.
  • Makes clear that FFCRA leave can be taken intermittently in certain circumstances related to having to take care of children who are subject to school/child care closures.
  • Only employees who have been on the employer’s payroll for at least 30 calendar days prior to the FFCRA’s effective date (i.e. as of March 2, 2020) are eligible for FFCRA leave.
  • Explains the types of documentation that an employer can require from an employee (and must maintain) in relation to FFCRA leave as well as the employee’s obligations to provide such documentation.
  • Employees are only eligible for FFCRA leave if they are unable to work (even remotely) as a result of COVID-19, which includes those employees required to stay-home by local authorities and are unable to work remotely. If an employer has work for the employee, and the employee can perform that work remotely, the employee is not eligible for the leave (absent having symptoms of, or caring for a family member with symptoms of COVID-19) just because they cannot report to their normal worksite.
  • Employees cannot receive both unemployment pay and FFCRA paid leave.
  • Although employers can consider paying employees on FFCRA leave an amount in excess to that required by the law, the employer will not be able to claim, or be entitled to receive, a tax credit for that excess amount.
  • Employers who are subject to multi-employer collective bargaining agreements may be able to satisfy their FFCRA obligations by making contributions to the multi-employer fund or plan under certain conditions.

California employers should continue to monitor our blog for future updates concerning the FFCRA and other employment developments as a result of the COVID-19 pandemic. We also advise employers to seek legal advice to determine whether the FFCRA applies to their business, and if so, what steps to take to ensure compliance.

 

On March 24, 2020, the San Francisco Office of Labor Standards Enforcement issued guidance pertaining to the use of Paid Sick Leave under the San Francisco Paid Sick Leave Ordinance (PSLO).  This publication supersedes the OLSE’s guidance issued just last week. Employers should be aware of temporary changes in the PSLO rules specific to the current pandemic:

  1. No Doctor’s Notes for Duration of COVID-19 Local Health Emergency

Under normal circumstances, employers may require a doctor’s note to verify the need for sick leave of more than three consecutive work days.  For the duration of the COVID-19 “Local Health Emergency,” however, employers may not require a doctor’s note or other documentation for the use of paid sick leave taken pursuant to the San Francisco Paid Sick Leave Ordinance.

The rule will automatically revert to normal after the Local Health Emergency expires, or the OLSE revokes it sooner.

  1. Eligibility for Paid Sick Leave

The OLSE clarifies that employees who have been laid off, as opposed to furloughed, are not entitled to Paid Sick Leave.

Employees who are not ill and otherwise do not qualify for PSL (see item 3, below), but who have had their hours reduced or eliminated due to business slowdowns, are not entitled to use accrued paid sick leave to make up their lost pay.  Employees who remain scheduled to work may continue to use their accrued paid sick leave for any qualifying reason for any portion of their scheduled hours they are unable to work.

Note, however, that employers with 499 or fewer employees in San Francisco may need to provide employees who are unable to work or telework due to local, State or Federal quarantine or isolation orders, with up to 80 hours of Emergency Paid Sick Leave under the Families First Coronavirus Response Act, which takes effect April 1, 2020.  See https://www.dol.gov/agencies/whd/pandemic/ffcra-questions.

  1. Employee Use of Paid Sick Leave for Local Health Emergency Reasons

An employee may use accrued paid sick leave if he or she needs to take time off work because:

  • Public health officials or healthcare providers require or recommend that the employee isolate or quarantine him or herself;
  • The employee falls within the definition of a “vulnerable population” under the San Francisco Department of Public Health’s (DPH) March 6, 2020 guidelines or any subsequent updates.  As of March 6, 2020, a “vulnerable population” is a person who is 60 years old or older or a person with a health condition such as heart disease, lung disease, diabetes, kidney disease, or weakened immune system;
  • The employee takes time off work because the employee’s business or a work location temporarily ceases operations in response to a public health or other public official’s recommendation – subject to the “Eligibility for Paid Sick Leave” guidelines above;
  • The employee takes time off work because the employee needs to provide care for a family member who is not sick but who public health officials or healthcare providers have required or recommended isolate or quarantine; or
  • The employee takes time off work because the employee needs to provide care for a family member whose school, child care provider, senior care provider, or work temporarily ceases operations in response to a public health or other public official’s recommendation.
  1. Paid Sick Leave Not Paid Out at Separation

The OLSE also revised two of its FAQs, which clarify but do not represent a change in the law:

  • Employees are not entitled to a payout of Paid Sick Leave upon termination. However, if the employer uses a combined “PTO,” unlimited PTO, or vacation policy to comply with the SF PSLO (and does not separately track and accrue Paid Sick Leave for its employees) then the PTO is paid out upon separation. This is consistent with existing California law.
  • If there is a separation from employment, and an employee is later rehired by the employer within one year, previously accrued and unused paid sick leave must be reinstated, and the employee is entitled to use the previously accrued and unused paid sick leave and to accrue additional paid sick leave upon rehiring.

Financial Relief Available for Employers (Updated 3/30/2020)

As noted in my blog post last week, if employers pay their San Francisco employees for extra sick time (beyond the amount required by the SF PSLO), the City will reimburse $15.59 per hour for extra sick leave up to 40 hours, for up to 499 employees, through its new Workers and Families First Program.  Employers will need to pay their San Francisco staff the extra sick time at their regular rate before they can get reimbursed.

A step-by-step program guide has been published here, and the reimbursement application form is now available here.

Employers should apply for reimbursement as soon as possible once they have paid out sick time, because the funding is limited to $10 million and is first-come, first-served.

Additional financial relief for San Francisco businesses is available during the local COVID-19 emergency:

  • The City has deferred business taxes due April 30, 2020, for businesses with up to $10 million in gross receipts, for nine months with no interest or penalties.
  • The City is deferring collection of annual small business license and permit fees, for at least three months.
  • Water shut offs and late fees are being suspended for at least 60 days.
  • The City has declared a moratorium on commercial (and residential) evictions due to nonpayment until at least April 15, 2020, for small business and residents.

Please be sure to frequently check the Office of Economic and Workforce Development’s list of resources and financial assistance available, or contact one of the Labor and Employment attorneys at Weintraub for guidance.

In response to the COVID-19 pandemic, Congress recently passed the Families First Coronavirus Response Act (“FFCRA”). Among other things, the FFCRA requires certain employers to provide their employees with paid sick leave and expanded family and medical leave for specified reasons related to COVID-19. Employees’ leave rights under the FFCRA apply from April 1, 2020 through December 31, 2020.

The FFCRA requires that employers “post and keep posted, in conspicuous places on the premises of the employer where notices to employees are customarily posted, a notice, to be prepared or approved by the Secretary of Labor, of the [FFCRA’s requirements].”  The FFCRA also requires the Labor Secretary to create that model notice and make it publicly available within 7 days.

Today, the Department of Labor issued that notice. The document is entitled Employee Rights: Paid Sick Leave and Expanded Family and Medical Leave Under the Families First Coronavirus Response Act, and a copy of can be found on the DOL’s website here.

The notice contains summaries of employees’ paid leave entitlement amounts, an explanation of which employees are eligible, the qualifying reasons for which employees can use the leave, and information on the DOL’s enforcement mechanisms.

Consistent with other employment law posting obligations, employers should post this DOL notice in a conspicuous place where it can be easily read throughout the workday. Employers who have employees telecommuting should post the notice in an online portal where remote workers can easily access and read it, or alternatively email or otherwise electronically transmit a copy of the document to its remote workforce.

More information about the FFCRA can be found in our previous blogs here (summary of the new law), here (tax relief for employers), here (payroll tax credit and period of non-enforcement), and here (DOL Qs & As).  If you have any questions regarding the FFCRA or the impacts of the COVID-19 pandemic on your workplace, please do not hesitate to reach out to any of our Labor and Employment attorneys for guidance.

We have kept you advised of recent federal actions taken in response to the COVID-19 outbreak, including the passage of the Families First Coronavirus Response Act (“FFCRA”) which, among other things, provides paid family leave for certain employees. (See previous blogs at here, here, and here.) The FFCRA was to take effect “no later than 15 days” after being signed by the President. Given that it was signed on March 18, 2020, many legal commentators advised that it would take effect on April 2nd. The U.S. Department of Labor has now clarified that the FFCRA will instead take effect one day earlier on April 1, 2020.

Yesterday, the DOL issued a “Questions and Answers” webpage for the FFCRA. This Q&A page states: “The FFCRA’s paid leave provisions are effective April 1, 2020, and apply to leave taken between April 1, 2020 and December 31, 2020.” The Q&A page addresses a number of questions for both employers and employees, including which employers are subject to the FFCRA and calculating pay for purposes of complying with the FFCRA, such as computing hours for part-time employees and including overtime for full-time employees. The Q&A page also states that while there is an exemption for small businesses, the DOL will address that exemption in more detail in a future Q&A page.

We recommend that employers continue to monitor our blog for future updates concerning the FFCRA and other employment developments as a result of the COVID-19 pandemic. We also advise employers to seek legal advice to determine whether the FFCRA applies to their business, and if so, what steps to take to ensure compliance.