Aside from the serious health concerns surrounding COVID-19 (other than that, how was the play, Mrs. Lincoln?), with shutdowns of all non-essential business announced in both New Jersey and New York, many employers find themselves scrambling to sort out how to handle their employees. Business owners are asking questions like: What do I have to do to comply with the new federal law that gives leave and sick time? Must we pay employees who are sent home? What if the business suspends operations completely? What if I have to lay off my employees? Can it be temporary?

Below are answers to some FAQ’s related to COVID-19 and the workplace.

What are the legal considerations if I need to lay off a group of employees?

Depending on the size of your company, number of layoffs and other factors, you may be obligated to give 60 or more days’ notice under the federal Worker Adjustment and Retraining Notification Act (WARN) and/or equivalent state laws. Many employers ask: How can I possibly give 60 days (or more) notice in this environment? Although some exemptions (such as unforeseen business circumstances) may apply in light of COVID-19, and some temporary work stoppages may not require WARN notice, the WARN laws are highly technical and the potential penalties are steep, so it’s recommended you consult with counsel on your particular situation before terminating multiple employees at once.

Other legal considerations include the potential payout of sick and/or vacation hours, how layoffs may affect company (and the employees’) benefits and what legal obligations are triggered under the benefits plans and relevant laws (such as COBRA). The timing of paying employees their final paychecks (including potential commissions or bonuses), must also comply with the applicable state law. Employees who apply may also be eligible for unemployment benefits.

What’s the difference between a furlough and layoff?

A furlough is a temporary work stoppage with the expectation the employee will be brought back to work, whereas a layoff results in the end of employment. Both are usually done for economic reasons and may involve large numbers of employees. In some situations, a furlough can be treated the same as a layoff in the eyes of the law (potentially a temporary layoff); however, there may be some distinctions that can affect things like federal and state WARN notice requirements, depending on the circumstances. Unemployment benefits may also be available to employees who experience either a furlough or layoff, subject to the particular state’s unemployment coverage regulations.

What is the Families First Coronavirus Response Act that was signed by President Trump last week, and how does it affect my business?

The new law, which will be effective starting April 2, contains two key provisions for employers:

1. The Emergency Family and Medical Leave Expansion Act requires employers with fewer than 500 employees to provide up to 12 weeks of partially paid, potentially job-protected leave in a 12-month period, in certain COVID-19 related circumstances, called “Public Health Emergency Leave.”

2. The Emergency Paid Sick Leave Act requires employers with fewer than 500 employees to provide employees with up to 80 hours of emergency paid sick leave (“Emergency Sick Leave”) above whatever paid time off benefits are already offered to their employees under company policies and/or local sick leave laws, for a number of COVID-19 related reasons.

For what reasons can Public Health Emergency (“PHE”) leave be taken?

The 12 weeks of PHE leave may be taken if an employee is unable to work (or telework) due to a need to care for the employee’s child under 18 years of age if:

1. the child’s school or place of care has been closed, or

2. the child’s childcare provider is unavailable, due to a public health emergency.

Is the PHE leave paid or unpaid?

The first 10 days of a potential 12 weeks of PHE leave are unpaid (except under number 4 in the next question), and the remaining 10 weeks of PHE leave are paid at a rate of 2/3 the employee’s regular rate of pay, up to $200 per day or $10,000 total for the 10 weeks. Special calculations exist for employees whose schedule varies. There is a payroll tax credit available.

For what reasons can the Emergency Sick Leave be taken?

The up to 10 days (80 hours) of Emergency Sick Leave may be taken if:

1. The employee is subject to a quarantine or isolation order related to COVID-19, or has been advised by a health care provider to self-quarantine;

2. The employee is caring for an individual (any individual) subject to a quarantine or isolation order related to COVID-19, or who has been advised by a health care provider to self-quarantine;

3. The employee is experiencing symptoms of COVID-19 and seeking a medical diagnosis;

4. The employee is caring for a child if the child’s school or place of care has been closed, or the child’s child care provider is unavailable due to COVID-19 precautions. This provision is the only one that overlaps with the reasons PHE leave can be used.

How much Emergency Sick Leave must be provided?

Eighty hours for full-time employees, and part-time employees are provided with as many hours as the employee would be expected to work in a two-week period. This time is available for use as soon as the Act becomes effective (April 2) and it need not be accrued, but it does not have to be paid out when an employee leaves a company.

If the company already offers paid sick time or PTO that exceeds the 80 hours of sick time provided by this law, does the company have to offer additional paid sick time under this law?

Yes. Additionally, employers may not require an employee to exhaust other forms of PTO or sick leave before the Emergency Sick Leave can be taken.

How much pay may an employee receive while on Emergency Sick Leave?

If the employee is out for reasons related to his or her own health, the rate of pay per day is calculated at the employee’s regular rate of pay (with a maximum of $511 per day and a total of $5,110 if 10 days are used). If the employee is taking sick leave to care for an individual with a qualifying condition or because their child’s school or daycare is closed, the employer is only required to pay 2/3 of regular pay (with a maximum of $200 per day and a total of $2,000 if 10 days are used). There is a payroll tax credit available.

I’m a small employer—these laws will kill my business. Can I get a break?

The legislation permits regulations that, among other things, exempt small businesses with fewer than 50 employees from the requirements of providing any PHE leave and of providing Emergency Sick Leave due to lacking child care, when the imposition of such requirements “would jeopardize the viability of the business as a going concern.” Department of Labor (“DOL”) regulations should be issued in the next week or two.

If my business is forced to temporarily shut down (due to economic conditions, or by a government order), but I do not lay off my employees, do I still have to pay for these sick and leave days?

An employee’s inability to work solely due to the fact that the business itself is not in operation, is not an explicit covered reason under these new laws. However, as of this writing, there is some ambiguity in the law as to whether an employee who is not working because the business is shut down, and who then has a covered reason to take such leave, will be eligible for these benefits. We expect the DOL regulations that will be released soon, discussed above, may address this issue explicitly.

DISCLAIMER: The foregoing is a summary of the laws discussed above for the purpose of providing a general overview of these laws. These materials are not meant, nor should they be construed, to provide information that is specific to any law(s). The above is not legal advice and you should consult with counsel concerning the applicability of any law to your particular situation. Copyright © 2020 Greenwald Doherty, LLP. All Rights Reserved.

Zev Singer is a partner with Greenwald Doherty LLP, an employment and labor law firm, representing exclusively employers. Zev focuses his practice on preventive advice/counsel and employment litigation in New Jersey and New York. Zev welcomes questions and comments, and can be reached at 212-644-1310 or [email protected].