Client Alert: Update on Recent Legal Developments in wake of Ongoing COVID-19 Crisis

March 23, 2020

In this update:

1. Congress enacts the Families First Coronavirus Response Act (“FFCRA”)
2. New York expands paid sick leave, paid family leave, and disability benefits
3. U.S. Small business Administration offers low-interest federal disaster loans to small businesses and private non-profit organizations
4. New Jersey Attorney General warns that employees may not be fired based on COVID-19 symptoms, notes potential workplace harassment concerns

As the ongoing coronavirus/COVID-19 crisis continues to play out, federal, state, and local governments have been scrambling to enact various measures to mitigate the effects of the crisis on individuals and businesses. As part of our effort to keep our clients advised of the changing legal landscape during this tumultuous period, this alert will provide some updates on four recent developments related to the COVID-19 crisis.

1. Congress enacts the Families First Coronavirus Response Act – including additional paid sick leave and FMLA requirements for employers

President Trump has now signed the Families First Coronavirus Response Act (“FFCRA”) after revisions to the version first passed by the House of Representatives. Among other things, the FFCRA expands federal (a) paid sick leave and (b) Family and Medical Leave Act (“FMLA”) benefits available to certain employees. These provisions of the FFCRA apply to employers with fewer than 500 total employees (as well as some public employers). Note that the FFCRA allows the Department of Labor to promulgate future regulations to exempt certain healthcare and emergency response personnel as well as exempt small businesses with fewer than 50 employees if these provisions would jeopardize the continued viability of the business.

FFCRA requires that Paid sick leave benefits be provided. Specifically, employers must immediately make 80 hours of paid sick leave available to all full-time employees. For part-time employees, the requirement is the average number of hours over two weeks. The hours must be available for the following reasons:

• The employee is subject to a federal, state, or local quarantine or isolation order related to COVID-19.
• The employee has been advised by a healthcare provider to self-quarantine due to concerns related to COVID-19.
• The employee is experiencing symptoms of COVID-19 and seeking a medical diagnosis.
• The employee is caring for an individual who is subject to an order as described in subparagraph (1) or has been advised as described in paragraph (2).
• The employee is caring for a child and the school or place of care of the child has been closed, or the childcare provider of the child is unavailable, due to COVID-19 precautions.
• The employee is 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.

The rate and maximum amount of pay for sick leave depends on the reason for the leave. The first three reasons listed above entitle the employee to their regular rate of pay, capped at $511 daily and $5,110 aggregate. The fourth through sixth reasons listed above entitle the employee to two-thirds of their regular rate, capped at $200 daily and $2,000 aggregate. These requirements apply to all employees of covered employers.

FMLA benefits have been amended to allow an employee who cannot work (or work remotely) to take up to 12 weeks of protected leave in order to care for their minor child in the event that the child’s elementary school, secondary school, or place of childcare is closed (or the childcare provider is unavailable) as a result of a public health emergency. “Public health emergency” is defined to mean an emergency concerning COVID-19 declared by a federal, state, or local government authority. Employers are permitted to provide the first 10 days of leave unpaid, but further absences are required to be paid at a rate equal to two-thirds of the employee’s regular rate, capped at $200 daily and $10,000 aggregate. Additionally, if the first 10 days are unpaid, the employee may substitute any accrued vacation, personal, or sick leave for the unpaid days. These requirements apply only to employees of covered employers who have been employed for 30 calendar days.

Under the FFCRA, both the paid sick leave and FMLA provisions outlined above must take effect by April 2 and will remain in effect for the remainder of 2020.

The FFCRA does offer job protection provisions (including reasonable reinstatement and restoration efforts), but they are subject to exceptions for employers with fewer than 25 employees if the position no longer exists as a result of economic conditions caused by the COVID-19 crisis.

Notably, an employer may not require an employee to exhaust other paid leave before using the leave provided by the FFCRA. The benefits are paid by the employer, which will receive a tax credit for doing so.

2. New York State expands paid sick leave, paid family leave, and disability benefits

Additionally, New York State has enacted its own package of employee protections in response to the COVID-19 pandemic. These protections include expansions in three key areas: (a) paid sick leave, (b) paid family leave, and (c) disability benefits. The specific measures taken in each area are briefly outlined below.

Note, the law provides that these additional protections and benefits are in addition to any preexisting sick leave or paid time off – employers are specifically prohibited from charging an employee’s existing accrued PTO balance.

First, the paid sick leave requirements for employers varies based on the size of the employer.

• For employers with 1-10 employees and net income of less than $1M: unpaid sick leave until the termination of any mandatory or precautionary order of quarantine or isolation related to COVID-19 (in addition to any other benefits provided by law).
• For employers with 1-10 employees and net income of $1M or more: 5 days paid sick leave plus unpaid leave until the termination of any mandatory or precautionary order of quarantine or isolation.
• For employers with 11-99 employees: 5 days paid sick leave plus unpaid leave until the termination of any mandatory or precautionary order of quarantine or isolation.
• For employers with more than 100 employees: 14 days paid sick leave during any mandatory or precautionary order of quarantine or isolation.
• For public employers (regardless of size): 14 days paid sick leave during any mandatory or precautionary order of quarantine or isolation.

Second, disability benefits under the Disability Benefits Law have been expanded. The definition of “disability” has been amended to now include “the inability to do work because of a mandatory or precautionary order of quarantine after the employee has exhausted all paid sick leave.” Eligible employees may receive a percentage of their average weekly wages, capping out at $2,043.92 in maximum weekly benefits.

Third, family leave under the Paid Family Leave Law has been expanded. The definition of “family leave” has been amended to include both “leave taken to comply with a mandatory or precautionary order of quarantine” as well as leave taken “to provide care for the employee’s minor, dependent child who is subject to a mandatory or precautionary order of quarantine.” Eligible employees may receive a percentage of their average weekly wages, capping out at $840.70 in maximum weekly benefits.

The disability benefits and family leave benefits may be collected concurrently.

Employees are entitled to job restoration following leave taken under the new law.

However, there are also some important limitations on these expanded benefits. For example, these expanded benefits are inapplicable to: employees in voluntary isolation (or who object to appearing for work for fear of exposure), employees receiving leave/benefits under the federal FFCRA (see above) unless the New York benefits are in excess of the federal benefits, employees who are asymptomatic/undiagnosed and able to work remotely while under quarantine or isolation, employees who returned to the US from a non-work-related visit to certain countries designated by the CDC, and employees placed on leave, laid off, or furloughed by the employer.

3. U.S. Small business Administration offers low-interest federal disaster loans to small businesses and private non-profit organizations

Under the recently passed Coronavirus Preparedness and Response Supplemental Appropriations Act, the SBA is offering low-interest disaster loans to provide working capital to small businesses suffering substantial economic injury as a result of COVID-19. Under the recent statute, the SBA may offer Economic Injury Disaster Loans (EIDLs) to businesses that have a credit history acceptable to the SBA and that are located in states that have been designated as disaster areas by the SBA upon request of the state’s governor. As of March 19th, both New Jersey and New York have been declared as disaster areas, enabling small business located in either state, or in certain enumerated contiguous counties in Connecticut and Pennsylvania, to apply for EIDLs.

In addition to small businesses, private non-profit organizations are also eligible. The disaster loans are meant to help a business meet its financial obligations and operating expenses that could have been met had the coronavirus disaster not occurred.  The loan funds cannot be used to pay down long-term debt. Businesses may apply for loans up to a maximum of $2 million, with a repayment period of 30 years. The interest rate is 3.75% for small businesses and 2.75% for private, nonprofit organizations. In order to qualify for an SBA EIDL the business must be able to demonstrate that it has sustained losses caused by COVID-19 and the exact amount and terms of the loan will depend upon the type of business and its financial resources.

More information is available at https://www.sba.gov/disaster-assistance/coronavirus-covid-19. Applicants may apply online, receive additional disaster assistance information, and download applications at: https://disasterloan.sba.gov/ela. Applicants may also call the SBA’s Customer Service Center at (800) 659-2955 or email disastercustomerservice@sba.gov for more information on SBA disaster assistance.

4. New Jersey Attorney General warns that employees may not be fired based on COVID-19 symptoms, notes potential workplace harassment concerns

Yesterday, New Jersey Attorney General Gurbir S. Grewal issued a statement confirming that New Jersey’s workplace protection laws continue to apply during the COVID-19 crisis. Grewal specifically stated that state law bars New Jersey employers from firing workers based upon perceived coronavirus symptoms. Guidance offered by the Office of the Attorney General clarified that “your employer cannot fire you because you coughed at work and they perceived you to have a disability related to COVID-19.”

The OAG’s statement also touched upon harassment and discrimination concerns, noting that “COVID-19 is no excuse for racism, xenophobia or hate.” On this point, the OAG advises employers that they take reasonable action to stop coronavirus-related harassment among employees, such as one worker telling another with East Asian heritage that the disease is “the Chinese virus.” The guidance offered by the OAG states: “And if you have East Asian heritage and a co-worker repeatedly harasses you by claiming that Asian people caused COVID-19 or calling this ‘the Chinese virus,’ your employer must take reasonable action to stop the harassment if they knew or should have known about it.” Additionally, the OAG reminds employers that, under the state anti-discrimination laws, employers can’t fire an employee for reporting coronavirus-related harassment to human resources.

If you need assistance or have questions during this evolving situation contact Anselmi & Carvelli, LLP today. Our attorneys are prepared to assist you.

In light of governmental mandates, Anselmi & Carvelli, LLP offices are transitioning to full remote operations. Over the past few weeks, we have been steadily moving to a virtual work model and are now working remotely at full capacity. Our attorneys are still available 24-7 through email, phone, and videoconferencing to address any of your legal needs—that is our promise to you as we navigate this global health crisis.

In the meantime, here are some reminders of best practices to ensure continued seamless delivery of legal services to you and your organization:

• Use email and direct phone numbers available on our website to connect with our attorneys. Calls to the office will be transferred directly to attorney cell phones. Voicemails left at direct numbers are delivered to our attorneys in real time.
• Our attorneys will accommodate all meeting requests using phone and video conferencing. Our attorneys will adapt to any client-preferred conferencing technology.

Thank you for your continued trust and confidence in Anselmi & Carvelli, LLP. In return, we will be right by your side helping you and your organization to get through this challenging time.