On March 18, 2020, President Trump signed the Families First Corona Virus Response Act.  The Families First Act requires small and midsized employers to provide paid sick leave benefits and expanded FMLA leave to employees needing time away from work due to COVID-19 reasons.  While the Act provide others benefits, the FMLA Expansion Act and Emergency Paid Sick Leave Act are summarized here.

Family and Medical Leave Expansion Act

The Emergency Family and Medical Leave Expansion Act also takes effect on April 2, 2020 and expires on December 31, 2020. The Act requires covered employers provide up to 12 weeks of FMLA leave for a qualifying need related to a public health emergency.

     Covered Employers and Eligible Employees

Most private employers with fewer than 500 employees are covered by the Act. Employees eligible to take public health emergency leave are employees who have been employed for at least 30 calendar days by the covered employer when public health emergency leave is requested.

Leave under the Act is allowed for a qualifying need related to a public health emergency. A qualifying need related to a public health emergency means the employee is unable to work (or telework) due to a need for leave to care for the son or daughter under 18 years of age of such employee if the school or place of care has been closed, or the child care provider of such son or daughter is unavailable, due to a public health emergency which includes an emergency with respect to COVID-19 declared by the Federal, State or local authority.

     Pay While on Leave

The first 10 days of public health emergency leave may be unpaid. However, the Emergency Paid Sick Leave Act may provide an eligible employee with pay during this time period. After the initial 10 day period, the employer must pay the employee at a rate not less than 2/3 the employee’s regular rate of pay for the balance of the FMLA leave not to exceed $200 per day and $10,000 in the aggregate.

     Restoration of Position

Employees of employers with 25 or more employees are entitled to be restored to an equivalent position at the end of their leave. Employees of an employer with fewer than 25 employees are not entitled to job restoration if the position held by the employee when the leave commenced does not exist due to economic conditions or other changes in operating conditions of the employer that affect employment; and are caused by a public health emergency during the period of leave.

In that case, the employer must make reasonable efforts to restore the employee to a position equivalent to the position the employee held when the leave commenced, with equivalent employment benefits, pay, and other terms and conditions of employment. If these reasonable efforts to find an equivalent position fail, the employer must continue to make reasonable efforts to contact the employee if an equivalent position becomes available. This contact period runs from the 1-year period beginning on the earlier of the date on which the qualifying need related to a public health emergency concludes; or the date that is 12 weeks after the date on which the employee’s leave commenced.

Employers will be entitled to take certain payroll tax credits for payment of required paid family leave and paid sick leave.

Emergency Paid Sick Leave Act

The Emergency Paid Sick Leave Act requires most employers having fewer than 500 employees to provide up to 80 hours of paid sick leave taken for full time employees (part time employees receive the number of hours they worked on average over a 2 week period) who are unable to work for certain COVID-19 caused absences. Employees are immediately eligible to take paid sick leave under the Act regardless of how long the employee has been employed by the employer.

     Permissible Uses of Sick Leave

A covered employer shall provide paid sick leave to each eligible employee to the extent that the employee is unable to work (or telework) due to a need for leave because:

(1) The employee is subject to a Federal, State, or local quarantine or isolation order related to COVID–19.

(2) The employee has been advised by a health care provider to self-quarantine due to concerns related to COVID–19.

(3) The employee is experiencing symptoms of COVID–19 and seeking a medical diagnosis.

(4) 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).

(5) The employee is caring for a son or daughter of such employee if the school or place of care of the son or daughter has been closed, or the child care provider of such son or daughter is unavailable, due to COVID–19 precautions.

(6) 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.

When an employee is taking leave for a qualifying reason, the employer cannot require the employee to search for or find a replacement employee to cover the hours that the employee is using paid sick time.

   Amount of Pay

The amount of paid sick leave is calculated based on the amount of compensation the employee would otherwise been scheduled to work. The amount of compensation due for paid sick leave is capped at $511 per day and $5,110 in the aggregate for a use described in paragraph (1), (2), or (3) above and $200 per day and $2,000 in the aggregate for a use described in paragraph (4), (5), or (6).

Accrued, but unused paid sick leave is not paid on termination of employment and is not carried over into 2021.

     Notice and Posting Provisions

Employers may require an employee follow its reasonable notice procedures in order to continue to receive paid sick leave after the first workday (or portion thereof) an employee receives paid sick time under this Act. Employers must post notice of the provisions of this Act and the Secretary of Labor is required to provide a model notice not later than April 7, 2020. The notice must be posted conspicuously in places where notices to employees are customarily posted.

     Potential Narrow Exemption for Small Employers

The Secretary of Labor is given the authority to issues regulations to exempt small businesses with fewer than 50 employees when the imposition of such requirements would jeopardize the viability of the business as a going concern. It is unclear what procedures the Secretary will apply to grant industry-wide exemptions or exemptions on an employer-by-employer basis. Presumably, a small employer will have to petition the Secretary for an exemption, but this is unclear and may not be known until the Secretary issues the contemplated regulations.

The Act also contains anti-retaliation provisions that prohibit employers from retaliating for employee’s taking leave under the Act or because the employee filed a complaint under the Act.

The EEOC updated its employer guidance for handling common employment issues that arise during pandemics to specifically address issues related to COVID-19. The new guidance provide useful answers to many frequently asked questions employers have during this difficult time including:

  • How much information may an employer request from an employee who calls in sick, in order to protect the rest of its workforce during the COVID-19 pandemic
  • When may an ADA-covered employer take the body temperature of employees during the COVID-19 pandemic?
  • Does the ADA allow employers to require employees to stay home if they have symptoms of the COVID-19?
  • When employees return to work, does the ADA allow employers to require doctors’ notes certifying their fitness for duty?
  • If an employer is hiring, may it screen applicants for symptoms of COVID-19?
  • May an employer take an applicant’s temperature as part of a post-offer, pre-employment medical exam?
  • May an employer delay the start date of an applicant who has COVID-19 or symptoms associated with it?
  • May an employer withdraw a job offer when it needs the applicant to start immediately but the individual has COVID-19 or symptoms of it?

You can check out the EEOC’s answers to each of these questions here.

On March 14, 2020, the U.S. House of Representatives passed the Families First Coronavirus Response Act and Emergency Paid Leave Act of 2020. The Bills, if passed by the Senate, will provide: paid sick leave and unemployment benefits to employees taking leave as a result of COVID-19; expand FMLA eligibility and qualifying reasons for taking job-protected unpaid leaves of absence; free coronavirus testing; expand food assistance; and require employers to provide additional protections for health care workers.

Of particular significance to employers of any size are the amendments the Bill proposes to the FMLA. The Bill would amend the FMLA to expand the number of employers covered by the FMLA so that even small employers are covered to the extent they must provide unpaid leave as a result of a declared public health emergency. Employers would be defined to include all employers who employ fewer than 500 employees for each working day during 20 or more calendar weeks.  Thus, virtually all employers are covered by the FMLA, however, the Bill provides the Secretary of Labor with authority to issue regulations excluding certain small employers for good cause.

The group of eligible employees permitted to take FMLA leave for a public health emergency is also expanded beyond the eligible employees for other qualifying FMLA reasons.   Any employee who have been employed for at least 30 days by the employer is eligible for FMLA leave taken as a result of the public health emergency rather than being required to wait 12 months to become eligible.

The amount of leave available to take is the same for other FMLA qualifying reasons. Eligible employees can take up to 12 weeks of leave to:

  • comply with the recommendation or order by a public health authority having jurisdiction or a health care provider where the employee’s physical presence would jeopardize the health of others due to exposure of the employee to coronavirus or exhibition of symptoms of coronavirus by the employees and the employee is unable both perform the functions of the position and comply with the order of the health care provider or public health authority;
  • Care for a family member of the eligible employee where a public health authority or healthcare provider makes a determination that the family member’s presence in the community would jeopardize the health of other members of the community because of the exposure of such family member to coronavirus or exhibition of symptoms of coronavirus by such family member; or
  • Care for a son or daughter of the eligible employee where the child’s school or other place of care has been closed or the child care provider is unavailable due to a public health emergency.

Leave allowed that is related to a public health emergency may not be taken intermittently or on a reduced schedule basis.  The first 14 days of leave under the proposed law may be unpaid.  Employees may elect to substitute any paid leave the employee has accrued (e.g., vacation, personal or medical leave) but employers may not require employees to substitute paid leave for the unpaid leave.  After the first 14 days of leave, the employer shall provide paid leave at a rate of 2/3 the employee’s regular rate of pay for hours the employee would have usually worked for each day the employee takes leave qualifying for public health emergency leave.

Employers may request and require certification of the need for leave but may not require certification of the need for leave from the employee until at least 3 weeks after the date on which the employee takes the leave.   This provision is in contrast to the employer’s normal ability to require FMLA healthcare provider certifications be returned in 15 days.

Restoration rights of employees taking FMLA leave for a public health emergency from large employers (i.e., over 25 employees) have the usual FMLA job restoration rights.  Employees of small employers have more limited restoration rights. Employees of employers with fewer than 25 employees are not entitled to restoration when:

  • the position held by the employee no longer exists due to economic conditions or other changes in operating conditions of the employer affecting employment and caused by the public health crises during the period of leave;
  • The employer makes reasonable efforts to restore the employee to an equivalent position; and
  • If the reasonable efforts to restore to an equivalent position fail, the employer makes reasonable efforts to contact the employee if an equivalent position become available during the 1-year beginning on the earlier of the date when the qualifying need related to the public health emergency ends or the date that is 12 weeks after the date on which the employee’s leave starts.

While this Bill is not law, it is expected that the Senate will pass a similar version of the Bill and that it will become law. Small employers that are not used to complying with the FMLA should consult their professional advisors to learn what steps are needed to comply with if this Bill passes. Larger employers should address the additional qualifying reasons employee can take FMLA leave for a public health emergency and consult their professional advisors if they have questions regarding these new obligations.

Select Bill Text Here:

Emergency Family and Medical Leave Expansion Act

Emergency Unemployment Insurance Stabilization and Access Act of 2020

Emergency Paid Sick Leave Act

Health Provisions

 

Last week I had an opportunity to speak to 55 executives and HR professionals about the Dallas Paid Sick Leave Ordinance.  Thank you Gus Bates Insurance and Investments for putting on a great Lunch and Learn event.

Effective August 1, 2019, and being enforced beginning April 1, 2020, employers with employees performing at least 80 hours of work in a twelve month period in the City of Dallas need to start getting ready for the City to begin enforcing the ordinance.  You can read a summary of the new ordinance’s high points here.

If you want a copy of my slide presentation, shoot me an e-mail at Russell.Cawyer@KellyHart.com

In a compromise between the City of San Antonio and a coalition of local San Antonio employers that sued to block the implementation of the new paid sick leave ordinance, the City agreed to postpone the effective date of the ordinance from August 1, 2019 until December 1, 2019.  The state district judge hearing the case entered an order staying implementation of the ordinance through December 1, 2019.  The additional time may allow the appeal of a similar law passed by the the City of Austin, and struck down by a state district judge, to reach a conclusion.  The outcome of the Austin the case will have a profound effect on whether San Antonio’s ordinance is lawful as the two statutes are nearly identical.

Meanwhile, a similar paid sick leave law passed by Dallas, Texas is still scheduled to take effect on August 1, 2019. Litigation is imminent and it remains unclear if Dallas’ law will take effect August 1, 2019.

Barring legal action and an injunction, employers that have an employee performing at least 80 hours per year in San Antonio should be prepared to comply with City’s new paid sick leave ordinance beginning on August 1, 2019.  Here are the highlights of the law:

  • Requires employers with 15 or more employees to provide 1 hour of paid sick leave accrual for every 30 hours worked up to 64 hours. Employers with less than 15 employees must provide accrual for up to 48 hours of paid sick leave per year.  Employers with no more than five employees have until August 1, 2021 to comply with the law.
  • Accruals start on commencement of employment but employers can preclude use until employee has worked at least 60 days if the employer establishes that the employee’s term of employment is at least one year.
  • Employees can use the paid leave for the employee’s physical or mental illness, physical injury, preventative or health care or health condition; the employee’s need to care for their family member’s physical or mental illness, physical injury, preventative medical or health care or health condition; or the family members need to seek medical attention, seek relocation, obtain services of a victim services organization, or participate in legal or court ordered action related to an incident of victimization from domestic abuse, sexual assault, or stalking involving the employee or the employee’s family member.
  • Covered leave is paid out at what employee would have earned if employee had worked scheduled work time, exclusive of any overtime, premium, tips or commission, but no less than the state minimum wage.
  • Employers may adopt reasonable verification procedures to confirm the employee’s request for earned sick time meets the requirements of this section if the employee request to use earned paid sick time for more than three consecutive work days. Employers may not adopt verification procedures that would require an employee to explain the nature of the domestic abuse, sexual assault, stalking, illness, injury, health condition or other health need when making the request for earned paid sick time.
  • Accrued but unused paid sick leave rolls over to the following calendar year unless the employer provides employees with 64 or more hours at the beginning of each calendar year.
  • Employers must provide employees at least monthly with written or electronic statement showing employees’ available, earned paid sick time.
  • Employer handbooks must include a notice of employee rights and remedies under the statute in the handbook.
  • If the Director makes signage available on its website, Employers must post signs describing the requirements of the chapter in conspicuous places in English and other languages determined by the Director.
  • Employers using something other than a calendar year for sick pay accrual must notify employees in writing of the policy at the commencement of employment or its effective date –whichever is later.
  • Records must be kept for same period of times as payroll records under the FLSA regulations –(i.e., three years)
  • Employers may not require employees to find replacements to work the employee’s shift but the ordinance does not prohibit an employer from allowing an employee to voluntarily exchange hours or voluntarily trade shifts with another employee or prohibit an employer from establishing incentives for employees to voluntarily exchange hours or voluntarily trade shifts. The law also does not prohibit employee donation programs to donate available earned paid sick time to another employee.
  • The law prohibits retaliation against employees for requesting of using earned paid sick time.
  • Complaints are investigated by the Director who is required to commence a prompt and full investigation to determine if there is sufficient cause to believe a violation has occurred. Complaints must be filed within two years of the date of the violation. The Director has the authority to issue subpoenas in the course of the investigation.
  • Violations may result in a civil fine up to $500. No penalties will be assessed until after April 1, 2020 except for retaliation. Employer may appeal any civil penalty assessed under the chapter.
  • The law does not create a private right of action nor establish a criminal offense.
  • There is no requirement accrued but unused sick pay be paid on termination of employment. However, if an employee is rehired in 6 months or less, the employer must grant the employee’s prior sick leave balance.

Employers that have employees who perform 80 hours of work in the City of San Antonio should begin to make preparations for the effective date of the ordinance.

Employers with 100 or more employees and certain federal contractors have been required to submit EEO-1 reports, identifying the number of employees working in each job category by race, sex and ethnicity, since 1996. In 2016, under the Obama administration, the EEOC proposed revisions to the information required to be reported each year on the EEO-1 form to include pay and hours data, known as Component 2 data.

Then, in 2017, the Trump administration’s Office of Management and Budget issued a memorandum staying the new rules from going into effect. This stay was vacated by a U.S. District Court for the District of Columbia on March 4, 2019, The Court ruled that covered employers must submit Component 2 data for both 2017 and 2018 calendar years by September 30, 2019.

EEO-1 Component 1 Overview

To recap, for Component 1 reporting, covered employers must report the number of employees employed in each of 9 job categories by race, sex and ethnicity. There are 9 job categories:

1.1. Executive/Senior Level Officials and Managers
1. First/Mid Level Official and Managers
2. Professionals
3. Technicians
4. Sales Workers
5. Administrative Support Workers
6. Craft Workers
7. Operatives
8. Laborers and Helpers
9. Service Workers

Employers must pull required data from one pay period in either October, November or December of the survey year. Employers choose which month to use from those three. Employers must report both full and part time employee data.

Covered employers that have multiple establishments (or locations) need to file separate reports for: (a) the headquarter location; (b) each business site (or establishment) that has 50 or more employees; (c) all business sites with fewer than 50 employees on one consolidated report with all of those locations’ data; and (d) a consolidated report that includes data for all employees of the company.

Employers must give employees the opportunity to self-identify their race/ethnicity for the EEO-1 report. Only if employees choose not to self-identify can employers use other employment records or observations to provide the required information.

New EEO-1 Component 2

The new EEO-1 Component 2 requires employers to additionally report hours worked and pay data, broken down by race, sex, and ethnicity and by EEO-1 job category (the same 9 job categories use for Component 1) for 2017 and 2018 payrolls by September 30, 2019.

Hours Data

Hours data should be reported by the employer in the aggregate for all employees in each pay band and job category by race, ethnicity and sex.  For non-exempt employees, employers must report hours worked as recorded for FLSA purposes during the reporting year, including overtime. For exempt employees, employers may choose to report actual hours worked, if the employer maintains accurate records of hours worked OR may report proxy hours. If the employer chooses to use proxy hours for exempt employees, they should report 40 hours per week x the number of weeks worked in the year for full time employees and 20 hours per week x the number of weeks worked in a year for part-time employees. Weeks worked for exempt workers = the number of weeks paid in a year.

Obviously, once hours data is determined for both exempt and non-exempt employees within each job category, pay band, ethnicity and sex, these numbers are aggregated together for reporting.

Wage Data

Employers must report pay data for employees within the following 12 pay bands, and broken down by job category, race, ethnicity and sex:

1. $19,239 and under
2. $19,240-$24,439
3. $24,440-$30,679
4. $30,680-$38,999
5. $39,000-$49,919
6. $49,920-$62,919
7. $62,920-$80,079
8. $80,080-$101,919
9. $101,920-$128,959
10. $128,960-$163,799
11. $163,800-$207,999
12. $208,000 and over

The reporting for each EEO-1 job category will look similar to the chart below. Once employers determine pay data, they should report the number of employees within each pay band and category:

For determining which wages to report, employers should report the wages found in Box 1 on each employee’s W-2 form. This includes wages, tips, overtime, bonuses, fringe benefits, employer contributions to HSA’s or other compensation. It does not include elective deferrals such as employee contributions to a 401(k) plan.

The City of Dallas passed a paid sick leave ordinance requiring private employers to provide up to 64 hours of paid sick leave to employees working in the City. Barring court intervention, the law will take effect August 1, 2019.  Here are the highlights of the ordinance:

  • Requires employers with 15 or more employees to provide 1 hour of paid sick leave accrual for every 30 hours worked up to 64 hours. Employers with less than 15 employees must provide accrual for up to 48 hours of paid sick leave per year.
  • Accruals start on commencement of employment but employer can preclude use until employee has worked at least 60 days.
  • Employees can use the paid leave for the employee’s physical or mental illness, physical injury, preventative or health care or health condition; the employee’s need to care for their family member’s physical or mental illness, physical injury, preventative medical or health care or health condition; or the family members need to seek medical attention, seek relocation, obtain services of a victim services organization, or participate in legal or court ordered action related to an incident of victimization from domestic abuse, sexual assault, or stalking involving the employee or the employee’s family member.
  • Covered leave is paid out at what employee would have earned if employee had worked scheduled work time, exclusive of any overtime, premium, tips or commission, but no less than the state minimum wage.
  • Employers may adopt reasonable verification procedures to confirm the employee’s request for earned sick time meets the requirements of this section if the employee request to use earned paid sick time for more than three consecutive work days. Employers may not adopt verification procedures that would require an employee to explain the nature of the domestic abuse, sexual assault, stalking, illness, injury, health condition or other health need when making the request for earned paid sick time.
  • Accrued but unused paid sick leave rolls over to the following calendar year unless the employer provides employees with 64 or more hours at the beginning of each calendar year.
  • Employers must provide employees at least monthly with written or electronic statement showing employees’ available, earned paid sick time.
  • Employer handbooks must include a notice of employee rights and remedies under the statute in the handbook.
  • Employers must post signs describing the requirements of the chapter in conspicuous places in English and other languages determined by the Director.
  • Employers using something other than a calendar year for sick pay accrual must notify employees in writing of the policy at the commencement of employment or its effective date –whichever is later.
  • Records must be kept for same period of times as payroll records under the FLSA regulations –(i.e., three years)
  • Employers may not require employees to find replacements to work the employee’s shift but the ordinance does not prohibit an employer from allowing an employee to voluntarily exchange hours or voluntarily trade shifts with another employee or prohibit an employer from establishing incentives for employees to voluntarily exchange hours or voluntarily trade shifts. The law also does not prohibit employee donation programs to donate available earned paid sick time to another employee.
  • The law prohibits retaliation against employees for requesting of using earned paid sick time.
  • Complaints are investigated by the Director who is required to commence a prompt and full investigation to determine if there is sufficient cause to believe a violation has occurred. Complaints must be filed within two years of the date of the violation. The Director has the authority to issue subpoenas in the course of the investigation.
  • Violations may result in a civil fine up to $500. No penalties will be assessed until after April 1, 2020 except for retaliation. Employer may appeal any civil penalty assessed under the chapter.
  • The law does not create a private right of action nor establish a criminal offense.
  • There is no requirement accrued but unused sick pay be paid on termination of employment. However, if an employee is rehired in 6 months or less, the employer must grant the employee’s prior sick leave balance.

Employers with employees performing services in the City of Dallas should begin to make preparations now for the effective date of the ordinance.

The Texas Legislature ended its session last week without passing a bill that preempts municipalities from passing laws requiring private employers to provide paid sick leave to employees. Consequently, employers in Dallas and San Antonio must prepare for the implementation of the local paid sick leave laws that take effect August 1, 2019.

Dallas, San Antonio and Austin each passed local ordinances requiring private employers in the cities to provide paid sick leave for employees. The Austin ordinance is currently enjoined by court order and is on appeal to the Texas Supreme Court. It was anticipated that the Texas legislature would pass a law prohibiting municipalities from passing these kinds of laws.  However, the bills to do so never made it out of the House committees.

Barring court action in Dallas or Bexar County, or an order of the Texas Supreme Court striking down the Austin ordinance (The Dallas and San Antonio laws are modeled after the Austin ordinance), the Dallas and San Antonio’s laws take effect August 1, 2019. In the coming days I will summarize the requirements of the Dallas and San Antonio laws here.

In a Texas unemployment benefit proceeding, the employee usually bears the burden of establishing an entitlement to benefits when the employee resigns.  The employer bears the burden to show disqualification for benefits when the employer initiates the termination.  However, when an employee offers more than two weeks’ notice of intent to resign and the employer accepts the notice of resignation immediately, the employer then shoulders the burden to show that when it accepts the resignation, the employer had reasons to terminate the employee at that time that disqualified the employee from unemployment benefits (i.e., misconduct connected with the work).

Consequently, if an employee offers a company more than two weeks’ notice of intent to resign and the employer desires to avoid being charged for the employee’s unemployment benefits, the employer has three options to avoid having the resignation treated as a termination.  First, the employer can accept the resignation immediately and pay wages in lieu of notice (i.e., paying wages for the entire notice period), thereby rendering the action a resignation.  Second, the employer can wait until only two weeks remain in the notice period and then accept the resignation.  Most unemployment hearing examiners will treat this as a resignation placing the burden on the departing employee to show eligibility for unemployment.  Finally, the employer could allow the employee to work out the full  notice period.  In each of these cases, a notice of resignation greater than two weeks is likely to still be treated as a resignation rather than a discharge.