Coronavirus (COVID-19) for Employers
During this pandemic, employers are forced to learn new regulations under the Families First Coronavirus Response Act and the CARES Act. This is in addition to balancing the statutes and regulations long in place, such as:
- The Fair Labor Standards Act (FLSA)
- The Family and Medical Leave Act (FMLA)
- Americans with Disabilities Act (ADA)
- Occupational Safety and Health Act (OSHA)
- National Labor Relations Act (NLRA)
- Workers’ Compensation
- Unemployment Compensation
- Workshare Programs
- Worker Adjustment and Retraining Notification Act of 1988 (WARN)
At DeSanto Morgan & Taylor, we are ready to help you balance the old and the new as your company evaluates the rapidly changing employment and financial landscape created by COVID-19.What You Need to Know
If an employee believes they are sick
First and foremost, an employer must consider their obligations to all employees to provide a safe workplace under the Occupational Safety and Health Act. If an employee is a threat to the health and safety of colleagues, the employer must take action. These actions include taking precautions as recommended by the Centers for Disease Control and Prevention (CDC). That being said, an employer can require that the employee seek a diagnosis in order to receive paid time off benefits or under the Families First Coronavirus Response Act.
Self-isolating employees who have traveled
The CDC has recommended quarantine or self-isolation for individuals who have traveled to certain countries. If this is applicable to an employee, an employer is permitted to require self-isolation. However, the employer should be cognizant of the various laws it balances in making this decision. Under the Americans with Disabilities Act (ADA), discrimination against an employee who is regarded as having or has a disability is prohibited. Whether an individual with COVID-19 would be classified as having a disability with the ADA depends on severity of the case and whether it substantially limits a major life activity. Under the ADA, an employer cannot exclude individuals with disabilities from the workplace for health or safety reasons unless there is a significant risk of harm to others even with reasonable accommodation. The uniqueness of this potential disability is the rapid progression. When symptoms of COVID-19 appear, there are many cases of this virus escalating quickly. For that reason, communication with the employee is important and constantly analyzing the employee’s need for and the employer’s ability to accommodate are important.
Confidentiality of medical information
If an employee has disclosed a diagnosis to COVID-19 to his or her employer, the employer is required to keep this information confidential. As with all medical conditions, this information is strictly confidential unless the employee has stated otherwise.
If an employee is sick
If an employee has become ill with COVID-19 and requires medical treatment, the employer should consider their paid time off policies and the Families First Coronavirus Response Act. With regard to paid time off or sick leave, employees are entitled to benefits under your employer policies, whether referenced as sick time, paid time off, or other leaves of absence.
In addition to paid time off, sick time, or vacation time, the federal government has enacted the Families First Coronavirus Response Act. This Act, effective April 1, 2020, applies to leaves taken from April 1, 2020 through December 31, 2020. This Act provides two forms of paid leave and is required for those employers employing less than 500 full and part time employees. Applicable to the situation where an employee is ill would be the Emergency Paid Sick Leave. Emergency Paid Sick Leave is capped at 80 hours. The employee should receive their regular pay, however, this regular pay is capped at $511/day or $5,110 in the aggregate for employees who have been diagnosed with COVID-19, have symptoms and are seeking a medical diagnosis, or are subject to a quarantine government order or health provider recommendation. Significantly, this leave will not apply if an employee has elected to self-quarantine because of personal fears of COVID-19. The employee’s isolation or quarantine must be mandated by either a health care provider or governmental entity. That being said, this benefit is required to be administered by employers employing less than 500 people and this benefit is specifically in addition to any other benefits that the employee may be entitled to under their employer’s policies.
If paid leave options have been exhausted and an employee is isolated or quarantined because they have COVID-19, a relative has COVID-19, or a physician has ordered a quarantine, the employee would generally be considered unemployed through no fault of their own. However, the employee would still need to meet other eligibility requirements, namely that the individual is able and available for work. An employee would be considered available for work if there is some work that they could perform remotely. In other words, depending on the severity of illness, unemployment benefits may be applicable.
If an employee’s family member is sick or an employee has childcare issues
Under the Families First Coronavirus Response Act, it is a qualifying reason for Emergency Paid Sick Leave that an employee is caring for an individual under a government quarantine or health care provider self-quarantine order. It is also a qualifying reason that an employee is caring for employee’s child if the child’s school or childcare facility is closed or the childcare provider is unavailable due to COVID–19 precautions. Under Emergency Paid Sick Leave, the employee would be eligible for 80 hours of Paid Sick Leave, however, these benefits are capped at $200/day or $2,000 in the aggregate.
In addition, under the Families First Coronavirus Response Act, an employee may be eligible for Emergency Family Medical Leave. Under this leave, an employee can use up to 12 weeks of protected Emergency Family Medical Leave. The benefit of this leave is compensation at two-thirds of the employee’s regular pay after the first ten days. Note, that the Emergency Paid Leave described above may cover an employee during the initial ten days. A substantial benefit of the Emergency Family Medical Leave is that, with limited exception for small businesses, the employer is required to return the employee to their same position when the employees returns from leave. In addition, unlike traditional Family Medical Leave, also known as FMLA, Emergency Family Medical Leave applies to employers of less than 500 employees. This includes employers that have between 1 and 50 employees.
Again, it is significant to note that compliance with these additional laws is required. Benefits are in addition to whatever other benefits the employee would be entitled to under employer policies.
For small businesses of less than 50 employees, there is a hardship exception. If providing Emergency Family Medical Leave jeopardizes the viability of your business, the employer can apply under the small business exemption. The Department of Labor is providing additional guidance and regulation as to what this requires.
If you are in a temporary shut down
If you are subject to a shelter in place order or are otherwise temporarily shut down, your next steps depend on your ability to operate in the interim, classification as an essential business, and your unique business factors. If you have been classified as an essential business, you are entitled to have your employees report to work, in compliance with any shelter in place order. You may remain open and operational. This means that employees must report to work.
If you are a non-essential business, employees cannot be required to report to the business location for work. However, employees can still be requested to work remotely. If remote work is available, and allows your business to function, there is no difference between an employee reporting for remote work and work at a business location. Failure to report to work would otherwise be a voluntary resignation under your attendance policies.
Beyond whether employees need to report to work, the issues of compensation and benefits are forcing many employers to make very difficult decisions. Namely, employers are having to decide whether to terminate employees or temporarily lay employees off. The first consideration in this decision is what is economically feasible for your business. Each business is different as is the financial viability of each business. In some cases, employee retention in any manner simply may not be possible. Subject to cost of continued operations, furloughing versus terminating employees is discussed further below.
Furloughing employees or reducing their hours
If the coronavirus has forced an employer to make business modifications, such as temporarily laying off employees or reducing their hours, under the CARES Act these employees will be eligible to receive unemployment benefits. In addition, under the CARES Act, unemployment benefits will be supplemented by $600/week and an additional 13 weeks of benefits may be available.
If an employee has been furloughed, the employee would otherwise be eligible for health insurance through the employer. Unless an employee is terminated, health insurance benefits should remain in effect. Therefore, one cost to consider in retaining employees is providing this additional benefit.
A further concern in reducing hours and compensation is compliance with the Paycheck Protection Program under the CARES Act. This program is specifically designed to help employers with less than 500 employees retaining their employees. The program provides loans to small businesses. Forgiveness of this loan depends on what the loan is used for and other eligibility requirements. Specifically, if employees are terminated or have their compensation reduced by 25% or more, an employer will no longer be eligible for loan forgiveness.
Can employees be terminated for not returning to work?
The relevant considerations in answering this question are the reason the employee is not returning to work and whether the employer’s business is deemed essential under the Governor’s mandatory shelter in place order. If your business is considered an essential business under Governor Pritzker’s mandatory shelter in place order, then employees can be required to report to work at a physical location. In that event, if an employee does not report to work, the employer may be able to consider this a voluntary resignation under its attendance policy. The distinction of voluntary leaving and termination is relevant for qualification for unemployment benefits. If an employer’s business is not an essential business, an employee is not required to report to a physical location. If a non-essential business has the ability to work remotely, an employee can be required to report to work in that capacity. For information of Governor Pritzker’s executive order, visit Stay at Home.
If an employee is not reporting to work because of a COVID-19 diagnosis or fear of diagnosis, the relevant inquiry is whether the employee has symptoms, has a diagnosis, and is receiving treatment. For example, if an asymptomatic employee wants to self-quarantine, but had not been recommended by a health care provider, failure to report to work would be deemed a voluntary resignation.
The government cannot require employers to continue to employ employees, particularly when it is not economically feasible. Therefore, employers remain free to terminate employees under employment at will.
That being said, the federal government has sought to strongly encourage employers to retain employees during these uncertain times. With regard to unemployment benefits, under the CARES Act, eligibility has been dramatically expanded. Ordinarily, unemployment benefits are a government benefit that provides temporary cash relief to employees terminated through no fault of their own. Under the CARES Act, employees who have had their hours reduced or have been temporarily laid off are eligible for unemployment benefits. Employees are also eligible for the federal government supplement of state unemployment benefits with $600/week under the CARES Act. In addition, under the federal loan program called the Paycheck Protection Program, employers are being strongly incentivized to retain employees in order to receive loan forgiveness.
The most notable difference between furlough and termination is health insurance benefits. If these benefits are offered to your employees, termination will end health insurance benefits. For this reason, the federal government has made it clear that furloughed workers are eligible for unemployment benefits. The goal here being to encourage employers to retain employees, and employee benefits like health insurance, even if the employer cannot afford to pay workers. In the event of termination, an employee would be eligible for continued participation in their employer-sponsored health plan under COBRA, however, many employees may find COBRA to be cost-prohibitive.
Freedom from discrimination because of national origin
At times, the message surrounding COVID-19 had placed blame for the virus on certain regions of the world. It is important that employers do not fall into any stereotypical view of the virus or those who get it. Employment laws of Illinois prohibiting discrimination on the basis of race, national origin, and ethnic background remain in effect during this pandemic and the employer’s policies regarding anti-discrimination should be strictly enforced.
No company is like yours. At DeSanto Morgan & Taylor, we seek to understand the uniqueness of your company and employees in order to provide individualized consultation and advice. We offer employment consultations focusing on the uniqueness of your employment and providing individualized advice. We would be happy to speak with you today.