A day after reporting that Texas employees rejecting a return to suitable work for fear of contracting COVID-19 could lose unemployment benefits, Govenor Abbott announced that the TWC has promulgated rules allowing employees to continue receipt of benefits even if rejecting a return to suitable work. According to the Governor’s press release:

Each unemployment insurance claim is currently evaluated on an individual basis. However, because of the COVID-19 emergency, the following are reasons benefits would be granted if the individual refused suitable work.

Reason for refusal:

  • At High Risk: People 65 years or older are at a higher risk for getting very sick from COVID-19.
  • Household member at high risk: People 65 years or older are at a higher risk of getting very sick from COVID-19.
  • Diagnosed with COVID: The individual has tested positive for COVID-19 by a source authorized by the State of Texas and is not recovered.
  • Family member with COVID: Anybody in the household has tested positive for COVID-19 by a source authorized by the State of Texas and is not recovered and 14 days have not yet passed.
  • Quarantined: Individual is currently in 14-day quarantine due to close contact exposure to COVID-19.
  • Child care: Child’s school or daycare closed and no alternatives are available.

Any other situation will be subject to a case by case review by TWC based on individual circumstances.

This rule change allows high risk or COVID-19 infected employees and employees without childcare due to COVID-19 to maintain unemployment benefits despite being offered and rejecting a return to work

 

 

When Congress was drafting the enhanced unemployment benefits available under the FFCRA some lawmakers opposed the additional $600 per week benefit because it could incentivize workers to remain on unemployment rather than returning to work. As Texas prepares to return to work, those lawmakers concerns are coming to fruition.

There are anecdotal reports that some employers making plans to bring employees back to work are encountering some employees who do not want to return to work either due to COVId-19 fears or because they receive as much or more through unemployment benefits as they do through working.

According the Texas Tribune, a spokesperson for the Texas Workforce Commissioner announced that employees who refuse to return to work when asked by the employer risk losing their unemployment benefits.  However, employers should keep in mind that employees may be entitled to paid sick leave or expanded FMLA benefits, including job protection, in some situations.

Moreover, if employers are SBA PPP recipients who want to maintain their payroll to maximize their loan forgiveness, employers should keep in mind that the payroll comparison for loan forgiveness is not tied to specific employees.  Instead, the loan forgiveness is tied to the payroll numbers and total payroll during a specified period before receipt of the loan and in the eight weeks after receipt of the loan. Thus, should employers face employees who refuse return to work, the employer can still use it payroll on new employees and use that payroll for PPP loan forgiveness purposes.

The President and governors of individual states are discussing plans to reopen businesses in the coming weeks.  Some of the measures employers will be required to take will be dictated by governmental agencies and for particular industries.  A few of the most commonly discussed steps include: temperature checks, use of PPE, heightened hygiene maintenance, return to work certificates and testing.

Employers May Take Employee Temperatures

Usually (such as during the regular cold and flu season), taking employee temperatures is an impermissible medical exam under the ADA . The ADA prohibits medical exams during a person’s employment unless it is job related and consistent with business necessity . A medical exam is job related and consistent with business necessity if the employer has a reasonable belief based on objective evidence that 1) the employee has a medical condition that will impair their ability to perform essential functions of the job or 2) that the employee may pose a direct threat to others in the workplace due to a medical condition.

The EEOC recently clarified in its update to its Pandemic Preparedness in the Workplace and the ADA guidance that because the CDC and the WHO have designated COVID-19 as a pandemic, measuring employee temperatures meets the direct threat standard and is allowed during this public health crisis . Employers should remember that employee temperatures are medical information that must be kept confidential under the ADA and only shared with supervisors or other employees on a need to know basis. Employers should also protect the persons taking employee temperatures by issuing them some form of PPE (masks and gloves) and using no touch thermometers where possible.

Employers May Ask Employees Who Report Feeling Ill if They Are Experiencing COVID-19 Symptoms

The EEOC’s guidance says that employers may ask employees if they are experiencing COVID-19 symptoms (fever, cough, chills, shortness of breath, loss of taste, sore throat etc) if they report feeling ill . But, the EEOC’s guidance leaves it unclear as to whether employers can ask employees who are not feeling ill to disclosure whether they have a medical condition that would put them at risk of complications from COVID-19. The pandemic preparedness guidance updated by the EEOC says that employers may ask questions about medical conditions that predispose individuals to complications only if the pandemic creates a direct threat to the disabled individuals . Unlike other questions answered by the EEOC in their updated guidance (such as whether employers may take employee temperatures), the EEOC did NOT specify whether the current COVID-19 pandemic has reached this direct threat threshold . Because the EEOC has left this as somewhat of a grey area, the safest course of action for employers is to avoid asking these questions.

Employers Can Require Employees to Wear PPE and Wash Hands

Employers can and should require employees to wear personal protective equipment (PPE), like masks, while in common areas of the workplace and wash their hands while at work . However, employers still must engage in the interactive process if an employee requests an accommodation to deviate from these protocols if a disability would make these requirements difficult for them. For example, if an employee has eczema and using the hand sanitizer provided by the employer inflames their skin, the employer can offer an alternative of washing their hands with sensitive soap instead.

Employers Can Require Fitness For Duty Certification For Employees Returning to Work

The EEOC says that employers may require employees returning to the workplace after COVID-19 to first submit a note from a doctor certifying that they are fit for duty . However, doctors may be overwhelmed at this time and not have time to perform these kinds of exams.

Serology Testing Should Not be Used for the Time Being

Serology tests that would identify whether someone has the antibodies to combat COVID-19 (meaning they previously contracted the illness and are now potentially immune) have recently come on the market. Some businesses are wondering if they would be able to use these so called “immunity passports” to test employees and return those to work who are immune. There are multiple problems with this idea. First, these tests are still in development and have a high false negative rate. The World Health Organization issued guidance on April 24, 2020, that there is no evidence that persons who have recovered from COVID-19 and have antibodies are immune from contracting it again . Further, because these tests look for the presence of antibodies created to fight COVID-19, they will not identify a person who is currently infected by the virus and has not yet developed the antibodies. Moreover, under current EEOC guidance, these tests would most likely constitute a medical exam that is prohibited by the ADA. In the event that these tests are improved or become much more accurate, the EEOC may update its guidance to allow employers to use these during this pandemic.

While businesses may still be several weeks away from reopening, employers need to start developing their return to work plans for employees so that comprehensive health and safety measures can be implemented when those businesses reopen and employees return to work.

On April 1, 2020, the DOL issued its regulations on the paid leave provision of the Families First Coronavirus Response Act (i.e., the Emergency Paid Sick Leave Act and the Emergency Family and Medical Leave Act).  While there is a lot to digest in the rule, the most significant aspect is the definition of and commentary surrounding quarantine or isolation orders.

The Rule defines “quarantine or isolation orders” to include a broad range of governmental orders, including orders that advise some or all citizens to shelter in place, stay at home, quarantine, or otherwise restrict their own mobility.  The commentary (page 14) to the Rule explains that:

An employee subject to one of these orders may not take paid sick leave where the employer does not have work for the employee. This is because the employee would be unable to work even if he or she were not required to comply with the quarantine or isolation order. For example, if a coffee shop closes temporarily or indefinitely due to a downturn in business related to COVID-19, it would no longer have any work for its employees. A cashier previously employed at the coffee shop who is subject to a stay-at-home order would not be able to work even if he were not required to stay at home. As such, he may not take paid sick leave because his inability to work is not due to his need to comply with the stay-at-home order, but rather due to the closure of his place of employment.1 That said, he may be eligible for state unemployment insurance and should contact his State workforce agency or State unemployment insurance office
for specific questions about his eligibility.

And just like legal briefs, the best stuff comes in a footnote explaining that:

This analysis holds even if the closure of the coffee shop was substantially caused by a stay-at-home order. If the coffee shop closed due to its customers being required to stay at home, the reason for the cashier being unable to work would be because those customers were subject to the stay-at-home order, not because the cashier himself was subject to the order. Similarly, if the order forced the coffee shop to close, the reason for the cashier being unable to work would be because the coffee shop was subject to the order, not because the cashier himself was subject to the order.

Consequently, the regulations provide that if a business is closed directly or indirectly by a shelter-in-place or stay-at-home order and the business has no work for its workers, paid leave under the FFCRA is not available.

You can see the full rule and commentary here.

 

 

As the paid leave provisions of the FFCRA take effect today, many employers are asking what information they should maintain so they can claim the tax credits that are available to pay for this leave.  Luckily, the IRS has come to the rescue describing the information that should be maintained.  The Service’s guidance explains that:

FAQ 44: An Eligible Employer will substantiate eligibility for the sick leave or family leave credits if the employer receives a written request for such leave from the employee in which the employee provides:

  1. The employee’s name;
  2. The date or dates for which leave is requested;
  3. A statement of the COVID-19 related reason the employee is requesting leave and written support for such reason; and
  4. A statement that the employee is unable to work, including by means of telework, for such reason.

In the case of a leave request based on a quarantine order or self-quarantine advice, the statement from the employee should include the name of the governmental entity ordering quarantine or the name of the health care professional advising self-quarantine, and, if the person subject to quarantine or advised to self-quarantine is not the employee, that person’s name and relation to the employee.

In the case of a leave request based on a school closing or child care provider unavailability, the statement from the employee should include the name and age of the child (or children) to be cared for, the name of the school that has closed or place of care that is unavailable, and a representation that no other person will be providing care for the child during the period for which the employee is receiving family medical leave and, with respect to the employee’s inability to work or telework because of a need to provide care for a child older than fourteen during daylight hours, a statement that special circumstances exist requiring the employee to provide care.

The Guidance goes on to explain that:

FAQ 45:  An Eligible Employer will substantiate eligibility for the sick leave or family leave credits if, in addition to the information set forth in FAQ 44 (“What information should an Eligible Employer receive from an employee and maintain to substantiate eligibility for the sick leave or family leave credits?”), the employer creates and maintains records that include the following information:

  1. Documentation to show how the employer determined the amount of qualified sick and family leave wages paid to employees that are eligible for the credit, including records of work, telework and qualified sick leave and qualified family leave.

  2. Documentation to show how the employer determined the amount of qualified health plan expenses that the employer allocated to wages. See FAQ 31 (“Determining the Amount of Allocable Qualified Health Plan Expenses”) for methods to compute this allocation.

  3. Copies of any completed Forms 7200, Advance of Employer Credits Due To COVID-19, that the employer submitted to the IRS.

  4. Copies of the completed Forms 941, Employer’s Quarterly Federal Tax Return, that the employer submitted to the IRS (or, for employers that use third party payers to meet their employment tax obligations, records of information provided to the third party payer regarding the employer’s entitlement to the credit claimed on Form 941).

Employers should maintain their records for at least four years.  The IRS FAQ is full of other information related to the tax credits and other tax aspects of the FFCRA and can be found here.

Yesterday, a U.S. District Judge enjoined enforcement of the Dallas Paid Sick Leave Ordinance.  The law, effective August 1, 2019, was scheduled to start being enforced by the City of Dallas on April 1, 2020.  Dallas’s law, similar to laws passed by the City of Austin and San Antonio, will now wait until the Texas Supreme Court rules on the appeal it is considering the legality of Austin’s ordinance.  Meanwhile, the Emergency Paid Sick Leave Act and Family and Medical Leave Expansion Acts will take effect tomorrow.

A copy of the Preliminary Injunction is here.

On March 27, 2020, Congress passed and the President signed, the Coronavirus Aid, Relief, and Economic Security (CARES) Act. The Act appropriated $2 Trillion to preserve and stimulate the U.S. economy during the Coronavirus crisis. In addition to important economic relief provided to individual tax payers and government backed loans and grants to especially hard hit industries, the Act establishes a $349 Billion program to issue payroll protection loans intended to encourage small businesses to retain their employees and remain in business during this crisis.

Because the law only passed 48 hours ago, there are no regulations or guidance published by the Small Business Administration outlining how to apply for and take advantage of the paycheck protection loans. Here is what we know from the text of the Act. The Act amends the Small Business Act and will be administered by the Small Business Administration.

Who Businesses are Eligible?

  • Eligible businesses are small business concerns and business concerns as that terms is defined by the Small Business Act.
  • Business concerns are entities that are organized for profit, have a place of business in the U.S. and make a significant contribution to the U.S. economy through the payment of taxes or use of American products, materials or labor and have fewer than 500 employees. Small business concerns have the same meaning as used in the Small Business Act.
  • Loans are available to small businesses in operation on February 15, 2020 that paid, and reported to the IRS, compensation (and in the case of employees paid payroll taxes) to employees or independent contractors.
  • Eligible business must certify that the uncertainly of current economic conditions make the loan necessary to support ongoing operations, funds will be used to retain workers and pay payroll/mortgage/lease/utility payments; the business does not have a duplicative loan pending under the Small Business Act and the business has not received a similar loan from February 15, 2020 to December 31, 2020.

What Loan Can A Small Business Apply For?

  • Small business may be eligible for a payroll protection loan totaling the lesser of: the average total of monthly payments for business payroll costs during a one-year period plus the amount of any outstanding disaster loan that has been refinanced into a paycheck protection loan multiplied by 2.5 or $10 Million.

How can the money be used?

  • Payroll protection loans may be used to pay for: payroll taxes (including salary, wages, commissions or other similar compensation up to $100,000); payment of interest on mortgage obligations; rent; utilities; interest on debt; and costs related to group health care benefits.

What are the terms of the Loan?

  • Loan interest rates are not to exceed 4 percent. Payments of loan principle, interest and fees are deferred for at least the first six months following issuance.
  • Personal guarantees or collateral is not required to obtain a loan.
  • Loan forgiveness is available for certain costs incurred during the period from February 15, 2020 to June 30, 2020. Costs incurred that may be included in loan forgiveness include: payroll costs, mortgage interest payments, rent and utility payments. Loan forgiveness can be reduced or denied if the employer lays off employees or reduces employee salaries.

This is an important stop-gap measure that may provide small business with much needed cash to weather the 90-120 day period when much of the economy is closed for business.

I would like to thank Kelly Hart associates Joanna McKinney and Jonathan Petree for their contributions to this post.

On March 26, 2020, the U.S. Department of Labor published a Field Assistance Bulletin and additional answers to what it anticipates are Frequently Asked Questions about the FFCRA’ s posting obligations.

The Field Assistance Bulletin No. 2020-1 announced that the Department would take a nonenforcement position during the first 30 days when the Act is in effect so long as the employer 1) remedies any violations by making the affected employees whole as soon as practicable; 2) the violations were not willful (i.e., the violations were not knowingly made or made recklessly); and 3) the employer commits, in writing, to future compliance with the Act.

The new FAQ answers a variety of questions about the mandatory posting of rights and responsibilities under the Emergency Paid Sick Leave Act and the Family and Medical Leave Expansion Act.  The Families First Coronavirus Response Act Notice – Frequently Asked Questions can be reviewed here.

This morning the government reported a record number of new unemployment benefit claims: 3.283 Million new claims.  Meanwhile, based on directive from Governor Abbott last week, the Texas Workforce Commission Unemployment Division is waiving the seven day waiting period for receipt of unemployment benefits and temporarily suspending the work search requirements for unemployment eligibility.

The Families First Coronavirus Response Act that provides emergency paid leave and expanded FMLA rights to employees of small and mid-sized employers requires covered employer to post notice of rights and responsibilities under the Act in the workplace.  The U.S. DOL has posted model posters employers can use and post in conspicuous places where employees can review them.  Here are the links the model postings.

Employee Rights: Paid Sick Leave and Expanded Family and Medical Leave under The Families First Coronavirus Response Act (FFCRA)

Federal Employee Rights: Paid Sick Leave and Expanded Family and Medical Leave under The Families First Coronavirus Response Act (FFCRA)