March 2020
Time Sensitive Information for Employers in New York State
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Under the Federal Families First Coronavirus Response Act qualifying employees may be eligible for two different benefits relating to COVID-19.
These benefits include:
1) up to ten paid sick days; and
2) paid time off under a limited expansion of the Family Medical Leave Act ("FMLA").
According to guidance documents just issued by the United States Department of Labor, these laws will become effective on April 1, 2020 and apply to leaves taken between April 1, 2020 and December 31, 2020. Employers may not retaliate against employees who take leave under either of these provisions. The requirements of these laws are not retroactive.  
This expansion of the FMLA applies to all employers
employing fewer than 500 employees.  
EmployeeCountTo determine whether the 500 employee threshold is met, the employer must count: 
  • At the time the leave is taken all full time and part time employees an employer employs within the United States, including the District of Columbia or any territory or possession of the United States.
    • This  includes employees on leave and temporary employees who are jointly employed by the employer and another employer even if maintained on another entity's payroll and day laborers supplied by a temporary agency.
    • Employers who are joint employers must count all of their common employees in determining whether these provisions apply.
  • Any employee who has worked for a covered employer for at least 30 calendar days will be eligible for benefits under this limited FMLA expansion.
    • An employee is considered to have been employed for at least 30 calendar days if the employee was on the employer's payroll for the 30 calendar days immediately prior to the day the leave would begin.
The expansion is limited to one purpose.
  • The expansion provides for up to 12 weeks of FMLA leave only when an employee is unable to work on-site or remotely because of a need for leave to care for a son or daughter under the age of 18 because the child's primary or secondary school or place of care has been closed or the child's child care provider is unavailable due to a public health emergency declared because of COVID-19.
    • A child care provider is defined as provider who receives compensation for providing child care services on a regular basis.
  • The law requires notice from the employee only as soon as is practicable if it is forseeable.
  • This leave is not related to recommendations to quarantine or to take care of a family member recommended to be quarantined.
  • The first 10 days of this leave is unpaid.
    • An employee may be eligible for the federal 80 hours of sick leave pay during this initial 10 day period if the employee is out of work for a reason qualifying under that provision. (See below).
    • Or, an employee may elect to substitute accrued vacation, personal or sick leave during this first 10 day period.
    • An employer may not require an employee to use such accrued leave.
    • After the first 10 days of leave, the employer must pay the employee the employee's regular salary for the remainder of the leave at a rate of not less than 2/3 of the employee's regular rate of pay based on the number of hours the employee would usually be scheduled to work.
      • PartTimeCalculationTo count the hours worked by a part time employee for the purposes of these laws, a part-time employee is entitled to leave for his average number of hours worked in a two week period.
      • The hours are calculated based on the number of hours the employee is normally scheduled to work. If the number of hours are unknown or if the number of hours vary, an employer may use a six month average number of hours for the 6 month period prior to the leave.
      • If the employee has not worked for the employer for 6 months, the calculation of hours should be equal to the "reasonable expectation" of the employee at the time of hiring with respect to the average number of hours per day that the employee would have been scheduled to work.
      • If there is no such agreement, the employer may calculate the appropriate number of hours of leave based on the average hours per day the employee was scheduled to work over the entire term of the employee's employment.
  • RateOfPayThe rate of pay is calculated on the greater of the federal/state/local minimum wage or the employee's regular compensation. If an employee is paid with commissions, tips, or piece rates, those wages must be incorporated in the calculation of the regular rate of pay.
  • The regular rate of pay used to calculate paid leave is the average of an employee's regular rate over a period of up to six months prior to the date on which the employee has taken leave.
  • An employer may also compute this amount for each employee by adding all compensation that is part of the regular rate over the 6 month period prior to the date on which the employee takes the leave and divide that sum by all hours actually worked in the same period.
These amounts under the FMLA expansion are capped at $200/day or $10,000.00 in the aggregate. This amount is equal to the tax credit that will be allowed for this benefit.
An employee who takes this leave is entitled to be restored to the position the employee held at the time of commencement of the leave or an equivalent position. The law contains an exception for employers with fewer than 25 employees if certain conditions are met. These are:
  1. The position does not exist due to changes in the employer's economic or operating conditions that affect employment and were caused by the COVID-19 emergency;
  2. The employer makes "reasonable efforts" to restore the employee to an equivalent position with equivalent benefits, pay, etc.; and
  3. If these efforts, fail, the employer makes an additional reasonable effort to contact the employee if an equivalent position becomes available.
The "Contact period" is the one year period beginning on the earlier of:
  • the date on which the employee no longer needs to take leave to care for the child; or
  • 12 weeks after the employee's paid leave commences.
Under this law, an employer who has fewer than 500 employees, when an employee is unable to work on site or remotely under certain conditions, but regardless of how long the employee has been employed by the employer, the employee must be provided with paid sick leave.   
  • The AMOUNT OF PAID SICK LEAVE required is up to 80 hours for full time employees and for part time employees an amount equal to the average number of work hours in a two week period.
    • For hourly employees whose schedules vary, calculating the number of hours is explained here.
    • Such part time employees may take any paid sick leave to which they are entitled for up to a two week period, and may take expanded family and medical leave for the same number of hours per day up to ten weeks after that, according to the DOL guidance.
    • If an employee is normally scheduled to work more than 40 hours/week, those hours also must be part of the calculation.  Thus, according to the guidance, the law requires that paid sick leave be paid only up to 80 hours over a two week period. However, if an employee was scheduled to work 50 hours a week, the employee may take 50 hours of paid sick leave in the first week and 30 hours of paid sick leave in the second week, with the total number of hours capped at 80 hours in the case of full time employees. (The sick leave pay does not need to include a premium for overtime hours under either federal law).

 The RATE OF PAY at which the benefit is paid is explained here.

    • The paid sick leave benefit is available ONLY if 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 because of COVID-19;  
      3. The employee has symptoms of COVID-19 and is seeking a medical diagnosis;
      4. The employee is caring for someone who is subject to a government order of quarantine or isolation or advised to self-quarantine by a health care provider;
      5. The employee needs to care for a son or daughter whose school or care provider is closed or unavailable due to COVID-19 precautions; and
      6. The employee is experiencing another condition substantially similar to COVID-19, as specified by the Secretary of the U.S. Department of Health and Human Services in consultation with the secretaries of labor and treasury.

    • This sick leave is in addition to any sick leave already provided by the employer.
      • The employee cannot be required to use the employer's sick leave first.
      • An employer who has provided an employee with paid leave for a reason identified in the paid sick leave law prior to the Act going into effect cannot be denied paid sick leave under the law.
      • The law thus imposes a new leave requirement on employers that is effective beginning on April 1, 2020.
  • The TOTAL NUMBER OF HOURS TAKEN for leave is capped at 80 even if the employee qualifies for the paid sick time for more than one reason at two different times during the law's effective period.
    • In the case of an employee using the leave for reasons for reasons 1, 2, or 3 above, the leave is paid at the employee's regular rate of pay, but is capped at $511/day or $5,110 in the aggregate.
    • In the case of an employee using the leave for reasons 4, 5 or 6, the employee is paid at 2/3 of an employee's regular rate and in those circumstances the paid sick leave rate is capped at $200/day or $2,000 in the aggregate.
  • After the first workday that an employee receives paid sick time under this law, an employer may require an employee to follow reasonable notice procedures to continue receiving the benefit thereafter.
  • If an employee's COVID-19 related need for using sick time under this law ends, then the employer can stop paying the paid sick time beginning with the employee's next scheduled work shift immediately following the termination of the need for paid sick time under this provision.
  • In addition, paid sick time under the law, does not carry over from one year to the next. Employees are not paid for unused leave upon termination, resignation, retirement or other separation from employment.
It is important to note that this law does not diminish the rights or benefits an employee is entitled to under any other federal, state, local law or collective bargaining agreement or existing employer policy. Therefore, employers must continue to provide paid sick leave benefits to which employees were entitled under the company's own policies, a collective bargaining agreement or other federal, state or local law that are in existence by of the effective date of the law.
Employers must also keep and post a notice in conspicuous places of employee's rights under the law. The United States Secretary of Labor has prepared a model notice for employers to use, which is the subject of our next Employment Alert. 
Small businesses with fewer than 50 employees can ask the United States Secretary of Labor to be exempt from the law's paid leave requirements if the requirement would jeopardize the viability of the business as a going concern.
  • Under the most recent guidance, to pursue this small business exemption, an employer must document why its business with fewer than 50 employees meets the criteria sets forth by the Department of Labor, which according to the recent guidance will be addressed in more detail in forthcoming regulations.
    • The guidance itself does not explain how to take advantage of this exemption. In the meantime, the guidance directs employers not to send any materials to the Department of Labor.
  • In addition, an employer of an employee who is a health care provider (as defined by FMLA) or an emergency responder may elect to exclude such employee from the application of the provisions of these laws.
  • The Secretary of Labor is also authorized to issue regulations for good cause to exclude certain health care providers and emergency responders form the definition of covered employee.
To offset the economic impact of these provisions, businesses can take advantage of new tax credits implemented under these laws.
  • The U.S. Department of Treasury and the U.S. Department of Labor have announced payroll tax credits that are intended to fully reimburse employers for the cost of providing qualifying wages related to COVID-19 under the new federal laws.
  • Qualifying wages are those paid to an employee who takes leave under the Act for a qualifying reason, up to the appropriate per diem and aggregate payment caps.
  • Applicable tax credits also extend to amounts paid or incurred to maintain health insurance coverage. The United States Department of the Treasury is addressing this issue.
Hopefully, regulations to be issued by the United States Department of Labor will provide further clarification for the many questions that are arising under these laws.
In addition to the new federal laws, employers must consider the interplay between these federal laws and the New York State law, enacted just a few days before the federal law and effective immediately, upon these benefits.  
  • Generally, the state law provides for some paid sick time based on different levels of employees employed as of January 1, 2020 AND the employee is under a government order of mandatory or precautionary quarantine or isolation related to COVID-19. Thus, there is some overlap between these laws.  
  • Indeed, when New York State enacted its law, it expressly stated that if there is a federal law providing for sick leave relating to COVID-19, then the New York State law will not apply unless the New York State law provides benefits that are more than those provided by the federal law.
  • Thus, if the federal law also applies, the employee is only entitled to the difference in benefits between the New York law and the federal law, whether it is respect to benefits paid directly by the employer or benefits received through New York State disability or paid family leave.
    • Under the New York State law, employees may be eligible, during the government ordered quarantine/isolation period for some disability or New York State paid family leave benefits beyond the paid sick leave from the employer for the duration of the government ordered quarantine/isolation period or to provide for the care of a minor dependent subject to an order of quarantine or isolation.
  • In understanding what payments are owed in the case of that overlap it is important to remember that the New York State law provides differing amounts of paid leave during an order of quarantine or isolation based on the number of employees and the federal law contains caps on the amount of pay available under the federal law.
  • Each case must be reviewed individually to determine whether one law impacts the rights or obligations under the other.
We will continue to update you as new developments unfold during this uncharted time.  As always, we at O'Connell and Aronowitz are here to help you, your families, and your businesses in any way we can.
Be well, be safe and be in touch. 
Please contact Meredith Savitt if you have any questions or concerns.