The Employer’s Guide to Federal and State Employee Leave Rights and Income Protection for Coronavirus-related Absences

Updated as of April 1, 2020

In recent days employers have been faced with very difficult and unanticipated situations in the workplace.  Employee absences from the workplace, whether related to personal or family illness due to the virus, voluntary or involuntary quarantines, fear of contracting the virus, reductions in hours, workplace furloughs or closures, may implicate leave rights under the federal Family and Medical Leave Act (FMLA) and the New Jersey Family Leave Act (NJFLA), as well as paid sick leave rights under the New Jersey Paid Sick Leave law.   In addition, employees may be eligible for additional income protection from state unemployment, temporary disability and workers compensation funds.

Signed into law on March 18, 2019 the Families First Coronavirus Response Act has several components, including paid sick leave and paid FMLA leave obligations aimed at easing the financial  impact of the virus upon employees. This guide synthesizes the various federal and state programs and answers questions about the leave and income protections are available to employees who find themselves unable to work due to the coronavirus epidemic.

Employers should keep in mind that none of the paid leave rights discussed herein apply if the employee is subject to a layoff or voluntary closure by the employer due to a slowdown in business.  Under the federal and New Jersey WARN acts, covered employers with 100 or more employees must comply with certain notice, severance and other requirements in the event of a business closure that affects large numbers of employees (generally 50 or more).   Although the WARN acts have exceptions for natural disasters or calamities, it is unclear whether these provisions could be used to cover an epidemic.  Nevertheless, these statutes are only implicated where the employer implements a mass layoff with no commitment to reinstate the employee within a six-month period so WARN Act obligations may not be triggered for  temporary furloughs. WARN Act requirement may be triggered if the employer closes or furloughs employees for more than 6 months or implements a permanent closure. Employers contemplating any furlough or layoff in the ensuing months that may affect 50 or more employees should consult with employment law counsel prior to implementation for an assessment of whether WARN act obligations are triggered.

THE FEDERAL EMERGENCY PAID SICK LEAVE ACT

The Emergency Paid Sick Leave Act requires all employers with fewer than 500 employees (as well as government employers) to provide 10 days/80 hours of paid sick time to all employees, regardless of tenure, who are unable to work or telework due to any of the following circumstances:

1. The employee is subject to a coronavirus quarantine or isolation order.
2. The employee has been advised by a health care provider to self-quarantine because of concerns related to the virus.
3. The employee has symptoms of the virus and is seeking a medical diagnosis.
4. The employee is caring for an individual  subject to a coronavirus quarantine or isolation order or has been advised by a health care provider to self-quarantine.
5. The employee is caring for his/her child in the event of a school or place of childcare closure due to the virus, including circumstances where education continues to be provided remotely.
6. The employee is experiencing any other substantially similar condition specified by the Secretary of Health and Human Services, in consultation with the Secretaries of treasury and Labor.

This new Emergency Paid Sick Leave entitlement is in addition to any other paid sick leave available to employees under state or local laws.

Amount of Pay During Leave:  Emergency Paid Sick Leave is to be paid for 10 days/80 hours at 100% of the employee’s regular salary, with a cap of $511 per day and $5,110 in the aggregate, if the employee’s own condition (reasons 1, 2 and 3) renders the employee unable to work.   When the employee takes leave to care for others or to care for child in the event of a school or place of childcare closing (reasons 4,5 and 6), the employee is only entitled to two-thirds of their regular rate of pay, with a cap of $200 per day and $2,000 in the aggregate. Payment for part-time employees is the average number of hours worked over the most recent two-week period.

Interplay with Statutory and Private Paid Time Off Benefits:  Employers may not require employees to use any statutory or company provided paid time off benefits during the 10-day period that the employee is using Emergency Paid Sick Leave benefits.

EXPANSION OF THE FEDERAL FMLA TO INCLUDE NEW PAID PUBLIC HEALTH EMERGENCY LEAVE

Employers With Fewer than 50 Employees Must Provide Paid FMLA Emergency Leave:  Under Currently under the FMLA, employers with 50 or more employees must provide employees with 12 weeks of unpaid leave to care for a newborn child, or care for oneself or a family member in the event of illness.    The new law temporarily expands FMLA protection to require any employer with fewer than 500 employees to provide paid Public Health Emergency Leave (FMLA Emergency Leave) to employees who need to care for a minor son or daughter because of a closure of the child’s school or place of daycare due to the Coronavirus health emergency.  Unlike the more stringent eligibility requirements for traditional FMLA, employees are eligible for FMLA Emergency Leave after 30 days of service.

Use of FMLA Emergency Leave:  Beginning with the passage of the Emergency Paid Leave Act through December 31, 2020, a qualifying FMLA event shall include the inability of the employee to work or telework due to the need to care for the child under 18 during a school closure or place of child care, or the unavailability of a child care provider, due to a public health emergency.

Payment During FMLA Emergency Leave:  The law expressly states that the initial 10 days of leave can be unpaid, obviously because employees qualifying for FMLA Emergency leave will be eligible for 10 days of Emergency Paid Sick Leave benefits  at two-thirds of their regular rate of pay.  The remainder of the FMLA Emergency Leave is also paid at two-thirds of the employee’s regular rate, with a cap of $200 per day and $10,000 in the aggregate (or $12,000 in the aggregate for the entire 12 weeks of FMLA Emergency Leave).  These payments are only available to those on leave due to school or daycare closures and are not available to employees using traditional FMLA leave to care for oneself or a family member, even if they are affected by the coronavirus.  Traditional FMLA leave remains unpaid.

Continuation of Healthcare Benefits: The new law does not include a carve-out for paid FMLA Emergency Leave from the FMLA’s requirement that employers continue employee healthcare benefits at the same levels as before the leave.  Thus, employers must continue their contributions to these benefits unless the employee fails to make their contribution, in which case the coverage may be cancelled.  Employers will receive a tax credit for any healthcare premium contributions made during the FMLA Emergency Leave.

Interplay with Statutory and Private Paid Time Off Benefits:   Employees may elect, but not be required, to substitute any accrued sick leave or other paid time off benefits for any unpaid FMLA Emergency Leave.

Job Security and Small Employer Exception: As with traditional FMLA, employees exercising their FMLA Emergency Leave rights are protected from any form of retaliation and must be returned to the same or a comparable position.   However, the job security provisions of traditional FMLA leave will not apply to employers with fewer than 25 employees if the position held at the start of the leave no longer exists due to economic conditions or other changes in operations, so long as the employer makes reasonable efforts to restore the employee to an equivalent position for a one-year period beginning on the earlier of i) the date the public health emergency is ends OR ii) 12 weeks after the leave commenced.

COMMON ASPECTS OF THE EMERGENCY PAID SICK LEAVE AND FMLA EMERGENCY LEAVE REQUIREMENTS

Exclusion of Health Care Workers and Emergency Responders: Employers are permitted to deny Emergency Paid Sick Leave and FMLA Emergency Leave to health care providers and emergency responders.   In addition, the Secretary of Labor is empowered to issue regulations excluding these workers from the definition of those employees otherwise eligible for these paid leave rights.

Small Employer Exemption: the Secretary of Labor is permitted to exempt small businesses with less than 50 employees from the Emergency Paid Sick Leave and FMLA Emergency Leave requirements in the case of leave needed as a result of a child school or daycare closure if the paid leave would jeopardize the business as a going concern, and the law expressly states that these small employers cannot be liable for violating the FMLA Emergency Leave requirements.  In addition, although not entirely clear in the text of the current bill, employers with fewer than 50 employees in a 75-mile radius appear to be exempted from the Public Health Emergency Leave Requirement.

Employees Under Multi-Employer Bargaining Agreements: An employer signatory to a multi-employer collective bargaining agreement may, consistent with those agreements, fulfill the payment obligations under the Emergency Paid Sick Leave Act and the FMLA Emergency Leave Act by making contributions to a multi-employer fund, program or plan based on the paid emergency sick or emergency FMLA leave the employee is entitled to, provided that the fund, program or plan enables employees to secure comparable payments for qualifying absences under the Emergency Paid Sick Leave Act and FMLA Emergency Leave Act.

Expiration of Emergency Paid Sick Leave and Public Health Emergency Leave:  The Emergency Paid Sick Leave and FMLA Emergency Leave rights will go into effect 15 days after enactment (April 1, 2020) and expire on December 31, 2020.

Tax Credits to Offset Employer Costs: To alleviate the economic impact of these mandatory relief measures, employers are eligible for a refundable tax credit equal to the payments made to employees for Emergency Paid Sick Leave and FMLA Emergency Leave.  These amounts are increased by the amount of nontaxable health insurance premiums paid by the employer during the leave, for the number of leave days taken, and further increased by the amount of Medicare tax owed by the employer. The total amount of the credit taken is also included in the employer income for the year.   However, for those employers who already receive a general business credit for providing FMLA leave, the FMLA Emergency Leave credit is not permitted.

No Retaliation and Posting: Employers are prohibited from retaliating against employees who take Emergency Paid Sick Leave and FMLA Emergency Leave and must post a notice to be issued by the Secretary of Labor about these new leave rights.

AMENDMENTS TO THE SOCIAL SECURITY ACT TO PROVIDE FOR EMERGENCY UNEMPLOYMENT FUNDS TO THE STATES

In anticipation of the increase in claims to state unemployment funds, federal emergency administrative grants are available in fiscal year 2020 to the accounts of the states in the Unemployment Trust Fund, subject to the conditions set forth in the act.  

COORDINATION OF FEDERAL AND STATE LEAVE RIGHTS AND BENEFIT PROGRAMS

On the state side, New Jersey has a robust program of protections available to employees affected by the coronavirus pandemic, including New Jersey Paid Sick Leave, New Jersey Paid Family Leave, Unemployment Insurance, Temporary Disability Insurance and Workers Compensation benefit programs. Recently the New Jersey Department of Labor has issued guidance clarifying the state benefit plans available to employees who are out of work reasons associated with the pandemic.

The list below illustrates how employers will coordinate federal and state benefits available to employees unable to work during the coronavirus emergency.

1. Employees diagnosed with or exhibiting symptoms of the coronavirus:  These individuals are eligible for 10 days of federal Emergency Paid Sick Leave.   Thereafter, these employees may elect (not be required) to use any accrued New Jersey Earned Sick Leave and required to use other paid time off benefits to cover over the absence, but under the circumstances employers may want to permit employees to make this election as well.  Employees opting to exhaust all paid leave benefits can apply for state temporary disability benefits online.  In addition, if the employee contracted the virus at work, the employee may be eligible for workers’ compensation benefits.If the employee’s illness requires inpatient care or continuing treatment by a healthcare provider, the employee may be eligible for traditional FMLA medical leave, which would be unpaid.
2. Employees exposed to the coronavirus who have been directed to self-quarantine:  These individuals are eligible for 10 days of federal Emergency Paid Sick Leave.   Thereafter, these employees may elect (not be required ) to use any accrued New Jersey Earned Sick Leave and required to use other paid time off benefits to cover over the absence, but under the circumstances employers may want to permit employees to make this election as well.  These individuals may be eligible for workers compensation if the exposure occurred in the workplace.
3. Employees unable to work because their child’s school or daycare was ordered closed by a public official due to the coronavirus or other public health reason:  These individuals are eligible for 10 days of federal Emergency Paid Sick Leave.   Because the New Jersey Earned Sick Leave law includes closures due to public health emergencies, these employees may then elect (not be required) to use any accrued New Jersey Earned Sick Leave.  In addition, these employees are eligible for 2 weeks of unpaid and 10 weeks of paid Emergency FMLA Leave.  After these paid benefits are exhausted, employees may be required to use other paid time off benefits to cover the absence, but under the circumstances employers may want to permit employees to make this election.
   
4. Employees out of work due to a voluntary closure by the employer:  These employees can apply for unemployment benefits online.  These claims are considered a temporary layoff, suspending the requirement that the employee be actively seeking work to be eligible for benefits.  Currently, a layoff lasting longer than eight weeks would require the employee to look for replacement employment to maintain eligibility.
5. Employees out of work due to a coronavirus-related workplace closure ordered by a public official or other public health reason:   Although not a covered event under the federal Emergency Sick Leave Law, the New Jersey Earned Sick Leave law includes closures due to public health emergencies.  Therefore, these employees may elect (not be required) to use any accrued New Jersey Earned Sick Leave. Thereafter, employees may be required to use other paid time off benefits to cover over the absence, but under the circumstances employers may want to permit employees to make this election as well.  Employees opting to exhaust all paid leave benefits can apply for unemployment benefits online. These claims are considered a temporary layoff, suspending the requirement that the employee be actively seeking work to be eligible for benefits. Currently, layoffs lasting longer than eight weeks would require the employee to look for replacement employment to maintain eligibility.
6. An employee who refuses to go to work when the employer was ordered closed by a public official but it remains open in defiance of the order:  Because the New Jersey Earned Sick Leave law includes closures due to public health emergencies, these individuals  can use any accrued New Jersey Earned Sick Leave or other paid time off benefits to cover the absence.Employees opting to exhaust all paid leave benefits may apply for unemployment benefits online.  These claims are considered a temporary layoff, suspending the requirement that the employee be actively seeking work to be eligible for benefits. Currently, layoffs lasting longer than eight weeks would require the employee to look for replacement employment to maintain eligibility.
7. An employee who does not report to work because  their healthcare provider says they are at greater risk of contracting the coronavirus or other illness due to a pre-existing condition:  These individuals are eligible for 10 days of federal Emergency Paid Sick Leave.   Because the New Jersey Earned Sick Leave Law permits the use of leave for i) time needed for preventative medical care, and ii) absences due to a determination by a public health authority that the presence of the employee would jeopardize the health of others, after Emergency Paid Sick Leave Benefits are exhausted, these employees may elect (not be required) to use any accrued New Jersey Earned Sick Leave. Thereafter, employees may be required to use other paid time off benefits to cover over the absence, but under the circumstances employers may want to permit employees to make this election as well.  Employees opting to exhaust all paid leave benefits may be eligible for state temporary disability benefits. Application can be made online.
8. An employee who needs leave to care for a family member or loved one with the coronavirus or symptoms of the virus:  These individuals are eligible for 10 days of federal Emergency Paid Sick Leave. Thereafter, these employees may elect (not be required) to use any accrued New Jersey Earned Sick Leave and required to use other paid time off benefits to cover over the absence, but under the circumstances employers may want to permit employees to make this election as well.  In addition, if the individual works for an employer with 50 or more employees, the employee may, depending on the gravity of the illness, be eligible for 12 weeks of traditional FMLA leave, which would be unpaid. Those working for an employer with 30 or more employees  may be eligible for 12 weeks unpaid leave under the New Jersey Family Leave Law.  In addition, employees opting to exhaust all paid leave benefits may also apply for Family Leave Insurance benefits at online.
9. An employee who does not report to work because the employee is caring for an individual  subject to a coronavirus quarantine, isolation order or has been advised by a health care provider to self-quarantine.  These individuals are eligible for 10 days of federal Emergency Paid Sick Leave. Because the New Jersey Earned Sick Leave Law permits the use of leave for i) time needed for a family’s preventative medical care and ii) absences due to a determination by a public health authority that the presence of the individual would jeopardize the health of others, after Emergency Paid Sick Leave Benefits are exhausted, these employees may elect (not be required) to use any accrued New Jersey Earned Sick Leave.  Thereafter, employees may be required to use other paid time off benefits to cover over the absence, but under the circumstances employers may want to permit employees to make this election as well.
10. A reduction in employee hours due to a business slowdown related to the coronavirus: These employees may be eligible for partial unemployment insurance benefits.   To be eligible for partial benefits, the employee cannot work more than 80% of the hours normally worked. Employees may apply for benefits.
11. An employee who simply refuses to work because they are “social distancing” and afraid of catching the virus. Subject to any state or federal orders limiting the number of employees permitted in a workplace, these absences are entirely voluntary and do not qualify for any of the paid sick of family leave programs, or any of the state income protection programs discussed in this guidance.
12. An employee who is laid off due to a business slowdown related to the coronavirus: . These employees may be eligible for unemployment insurance benefits.   Employees may apply for benefits.

For all coronavirus-related absences, employers should identify which scenario applies and advise employees, preferably in writing, of the federal and state benefits that are available to them. In addition, employers covered by the FFCRA must post the DOL’s Employee Rights poster in the workplace, as well as issue a copy of the poster to employees.

What’s Next?  Employers can expect additional federal and state legislative initiatives to assist businesses and employees reeling under the public health emergency.   Lindabury, McCormick, Estabrook and Cooper will keep our clients advised of further developments during this crisis. If you have questions, please contact our Labor and Employment group at 908.233.6800.

The information contained in this publication has been prepared by Lindabury, McCormick Estabrook & Cooper and is for informational purposes only.  The information is not legal advice nor does it substitute for the professional judgment of legal counsel.