Families First Coronavirus Response Act (the “Families First Act”)

Families First Coronavirus Response Act (the “Families First Act”)

Employee Rights PosterAttorneys and council members at Beggs & Lane have prepared the following information regarding the Families First Coronavirus Response Act, also known as the Families First Act. The Q&A was provided in a letter which is available HERE in PDF format. Russell Van Sickle can be reached at (850) 469-3315 for more information.

The Department of Labor (DOL) published the Notice Poster that employers with fewer than 500 employees are required to post for their employees.  The Notice Poster should be distributed where employees can see it such as break rooms or other physical location where other notices such as for workers’ comp and EEO are posted. For employees working remotely, find a way to distribute this Notice Poster such as by email or a photo of the notice via text. A PDF version of the Notice Poster is available HERE. Also, read the Question and Answers published by the DOL regarding the Notice Poster.

Dear Council Members:
I hope you are doing well. As you may have heard that last Wednesday, Congress enacted a law that applies to most employers with fewer than 500 employees requiring paid, protected leave time for employees needing time off for specific reasons related to the coronavirus pandemic. This law is called the Families First Coronavirus Response Act (the “Families First Act”).
I have prepared the following Q&A on the paid leave provisions of the Families First Act. There is still some uncertainty with such a brand new law, so this preliminary review may be subject to change when the regulations are issued, which should be sometime in April. The Department of Labor is currently seeking online comments from the public about this law to assist them in developing regulations.

Does this law apply to my company?

Generally, this law applies to employers with fewer than 500 employees, that is, from 1 to 499 employees.

Although the new law does not specifically address this question, there may be some companies which are so interrelated with one another so as to permit the employees of multiple companies to be counted together for purposes of determining if the 500 employee threshold is met. Such employers should keep in mind that there may be subsequent legislation that specifically addresses employers with over 500 employees.

 

When will this law take effect?

The law is set to go into effect on April 1, 2020.

 

What new leave does the law require?

There are two separate paid leave provisions in the law:
The Emergency Paid Sick Leave Act requires the payment of 2 weeks’ paid leave for specified reasons, either at full pay or 2/3rds pay depending on the reason for the absence. The paid sick leave is required to be paid at full regular pay (subject to statutory maximums described below) if an employee cannot work (or telework) because of a need to quarantine or is experiencing COVID-19 symptoms and is seeking medical diagnosis.

The paid sick leave is to be paid at 2/3rds pay (subject to statutory maximums described below) if the employee cannot work (or telework) due to caring for someone who has to be quarantined due to COVID-19 or because the employee’s normal child care is unavailable due to COVID-19.

The Family and Medical Leave Expansion Act is an amendment to the Family and Medical Leave Act, where employees who cannot work (or telework) because their child care is unavailable due to COVID-19 may have up to 12 weeks of job-protected leave. After the first 10 days of this leave, the employer is required to pay the employee 2/3rds of their regular pay (subject to statutory maximums described below) for the remainder of the 12 weeks.

 

How does the employer pay for these new paid leave requirements?

The law allows employers to obtain a 100% payroll tax credit up to the statutory maximums.

 

How long does an employee have to be working for an employer to be eligible for the 2 weeks’ paid sick leave under this law?

Employees are eligible for the 2 weeks’ sick leave immediately upon hire.

 

Is the eligibility period different for the 12 weeks leave under the amended FMLA?

Yes. In order to be eligible for the 12 weeks’ leave due to the absence of child care related to the coronavirus, the employee must have worked at least 30 calendar days with the employer.

 

May an employer substitute its existing PTO or other paid leave benefits for the paid leave under the new law?

No. The payments required by the new law are in addition to whatever paid leave benefits the employer may offer its employees. For example, if an employee with 5 days of accrued sick leave needs to miss work because she is quarantined for the virus, she will first be paid the 2 weeks’ sick leave pay under this law prior to using her regular sick leave pay bank.

 

What are the statutory maximums for the 2 weeks’ paid sick leave?

The following reasons for absence from work qualify the employee for full, regular pay up to a maximum of $511 per day and $5,110 total per employee:

  1. the employee is quarantined or isolated because of a government directive order related to COVID-19
  2. the employee has been advised by a health care provider to self-quarantine related to COVID-19
  3. the employee is seeking a medical diagnosis and is experiencing symptoms of COVID-19

The following reasons qualify the employee for 2/3rds regular pay up to a maximum of $200 per day and $2,000 total per employee:

  1. the employee is caring for someone who is quarantined or isolated due to government order or advisement of a health care provider
  2. the employee’s child under 18 years of age needs to be cared for because the child’s school or place of care is closed, or the child care provider is unavailable, due to COVID-19
  3. the employee is experiencing some other substantially similar condition that the government may identify later

 

How is the pay rate for the sick leave to be determined?

For full time employees, 2 weeks’ pay is considered 80 hours. For part time employees, 2 weeks’ pay is considered the number of hours worked by the employee in a 2 week period. For employees whose schedules vary so much that it is difficult to know how many hours they are missing at work, employers are to calculate the average hours worked per day over the previous 6 months. If the employee did not work during the previous 6 months such as in the case of a new employee, the employer is to calculate the hours based on the reasonable expectation of the employee at the time of hiring.

 

Is unused paid leave under this law payable to the employee upon termination?

No. Unused paid leave under this law is not payable to the employee and does not carry over into 2021.

 

Can I ask that employees find their replacement for their scheduled shift if they ask for this paid sick leave?

No.

What documentation can I require an employee to provide?

The new law does not address the documentation that an employer may require of any employee. The employee should not be required to provide documentation prior to taking the time off, however. The regulations may address this issue. In the meantime, employers should err on the side of granting the leave.

 

Are there any jobs that are excluded from the 2 weeks’ paid leave requirement?

The new law authorizes the Department of Labor to issue regulations excluding health care providers and emergency responders. The regulations should issue within 7 days of the law being signed by the President.

 

Do employers have to post a notice about the 2 weeks’ paid leave under this law?

Yes. The Department of Labor is preparing a notice for employers to post that should be available as early as March 25.

 

Can an employee sue the company if the paid sick leave is not paid or if the employer retaliates against the employee for seeking or taking this leave?

Yes. An employee can sue an employer for a violation or because of employer retaliation. The Department of Labor can also pursue action against the employer. Remedies could in clude back pay, liquidated damages, attorney’s fees, costs, and injunctive relief.

 

Unlike the 2 week paid sick leave provision, is there only one reason for an employee to take the amended FMLA leave?

Yes. Although there are multiple reasons an employee may be entitled to the 2 weeks’ paid sick leave, the Family and Medical Leave Expansion Act identifies only one reason: an employee’s inability to work (or telework) to care for a son or daughter under 18 years of age if the school or place of care for the child has been closed due to the COVID-19 public health emergency or if the child care provider for the child is unavailable due to the COVID-19 public health emergency.

 

What part of the 12 weeks’ leave is required to be paid?

After the first 10 days on the leave, the employer is required to pay the employee at least 2/3rds of their regular pay up to $200 per day and $10,000 total per employee. This pay requirement will extend until the employee’s place of care for the child is reopened or made available again, or at the expiration of the 12 week period. Similar to the 2 weeks’ paid sick leave provision, the law allows employers to receive a payroll tax credit for 100% of the payments made to employees while on this leave up to the $200 per day and $10,000 total.

While on this expanded FMLA leave due to a child care issue related to COVID-19, remember that employers will also be required to pay the employee the 2 weeks’ paid leave under the Emergency Paid Sick Leave Act discussed above, unless for some reason the employee exhausted the 2 weeks’ paid leave for a different reason (such as being quarantined) prior to needing time off for the child care issue.

Also, keep in mind that if an employee who is exempt from the overtime requirements of the Fair Labor Standards Act works during any part of the work week, the exempt employee should generally be paid her salary for the week. For example, if a supervisor works Monday through Wednesday and then takes off time off starting Thursday due to a need to care for a child whose school is closed due to the coronavirus, the supervisor will likely need to be paid her regular salary for the entire week with no deductions for missing Thursday and Friday.

 

If the employer has an existing paid leave program, how do these benefits relate to the expanded FMLA leave?

During the first 10 days, employees may choose to use any available PTO or other paid leave benefits that their employer may offer as part of their regular policies. However, an employer cannot require an employee to use PTO or other company-offered paid leave benefits during the first 10 days of the leave.

The law is silent on an employee’s use of existing employer-offered paid leave benefits after the first 10 days. I am hopeful that the regulations will address this question.

 

Is the leave taken by an employee under the expanded FMLA in addition to an employee’s regular FMLA leave entitlement?

Not likely. Based on how this new law fits within the FMLA, for employers who employ 50 or more employees and are regularly covered under the FMLA, the 12 week period for this leave should not be in addition to the FMLA leave available to eligible employees for other FMLA leave reasons. In other words, if an employee has already used his entire allotment of FMLA leave before seeking additional leave due to loss of child care related to the coronavirus, the employer is likely not required to provide additional leave under this law.

 

The FMLA does not normally apply to employers with fewer than 50 employees. Are there special provisions in this new law for employers with fewer than 50 employees?

Yes.

For employers who employ fewer than 50 employees, the law authorizes the Department of Labor to issue regulations that would exempt them from these leave requirements “when the imposition of such requirements would jeopardize the viability of the business as a going concern.” As of this time, no regulations have been issued. The law appears to place the burden on the employer to prove that allowing the paid leave would jeopardize the employer’s business, which could be an expensive burden in litigation that would open the company’s financials to scrutiny. The cost to defend claims on this issue may never be recovered. Therefore, employers should carefully consider whether to not follow the paid leave requirements of this new law.

For employers with fewer than 50 employees, there is no private cause of action an employee can take for a violation of this law. Instead, the enforcement would come from the Department of Labor.

The leave under this law is “protected” in the sense that the employer has a general obligation to place the employee back into his job position at the conclusion of the leave. However, for employers with fewer than 25 employees, the requirement to restore the employee back to the same position does not apply if the employer can show that the employee’s job position no longer exists due to “economic conditions or other changes in operation conditions of the employer (i) that affect employment and (ii) are caused by a public health emergency during the period of the leave.” Even if these circumstances occur, the employer must be able to show that the employer made reasonable efforts to place the employee in an equivalent position, including contacting the employee for a year if an equivalent position becomes available.

 

Does the new law specify the type of documentation an employer can require of an employee for this expanded FMLA leave?

No. This would seem to mean that the regular FMLA documentation rules apply, which generally requires an employee to provide certification within 15 days, with allowance for a greater amount of time when circumstances warrant. Regulations may provide guidance on this issue. In many instances, the lack of child care will not be a controversial issue, such as when the employee’s children attend a local school that is closed related to the coronavirus.

What should I do if I have more questions?

Feel free to contact me with any questions. My direct dial is 850-469-3315.
Yours very truly,
Russell F. Van Sickle
For the Firm

Manufacturers versatility proves vital in time of public health crisis

Manufacturers versatility proves vital in time of public health crisis

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brewery worker

Perfect Plain Brewing Co. Photo by Steven Gray

FLORIDA – Manufacturers are among many of the heroes that are coming to the rescue during this global health crisis. Companies are converting and even volunteering their production to provide supplies. In Florida, breweries and distilleries have started producing hand sanitizer. Some are offering it free to the public.

In St. Petersburg, Kozuba & Sons Distillery ceased their liquor production and facility tours to start making hand sanitizer with a high-quality spirit used to make vodka. The formula for the product will be made with a recipe provided by the World Health Organization (WHO).

While their distribution is currently in planning stage, and production is limited due to the amount of bottles they are able to obtain. Kazuba & Sons Distillery plan to donate a large portion their initial production to first responders, medical facilities, and community organizations that are actively working during the pandemic. They will make the product available for purchase as soon as they are able to obtain more dispenser bottles.

Here in Northwest Florida, Timber Creek Distillery in Crestview is following the WHO’s hand sanitizer recipe and makes the product available to the public for free. The company invites the community to bring empty bottles and visit the distillery at 6451 Lake Ella Rd. in groups of ten or less.

The Timber Creek Distillery president, Camden Ford, was quoted in the Crestview Bulletin saying, “It just feels good to give back.”

In Pensacola, Perfect Plain Brewing Company began making hand sanitizer last week with 151 proof alcohol and ultrasound gel. They are asking for a $3 donation to help pay servers who are out of work since Gov. DeSantis ordered sit-in establishments closed.

Perfectly Plain’s president, DC Reeves told WEAR-Channel 3 he’s thankful his team is working together during this time and grateful for the community’s support.

FloridaMakes Urges Importance of Supply Chain Disruption Planning

FloridaMakes Urges Importance of Supply Chain Disruption Planning

FloridaMakes logoAs the COVID-19 health crisis impacts global supply chains, FloridaMakes is stressing the importance of having a plan in place prior to disruptions to your supply chain. The following checklist can help your company react to and prepare for disruptions. Advanced preparation and business continuity planning will mitigate risks and help a business continue operating despite a crisis.

If your supply chain is already impacted:

  • Review potential short- and long-term impacts to make business decisions. Develop a plan to immediately handle impacts. Existing sales orders, forecasted demand, critical customers, work in
    process, raw materials inventory, critical suppliers and their locations, and incoming materials on order can impact production schedule and staffing, and affect a manufacturer’s ability to make sales.
  • Communicate with current and alternate suppliers. They may be getting similar requests from other companies and have capacity limits and/or higher prices. Manufacturing suppliers may be
    impacted and distributors could see spikes in demand based on actual or perceived concerns.
  • Develop standard communications statements for your customers – both a response statement if a customer will likely be affected (your orders may be delayed) and a proactive, standby statement to
    reassure customers and quell concerns.
  • Contact FloridaMakes to advise of available resources; and, find alternate suppliers within Florida or nationally through our NIST Manufacturing Extension Partnership National Network™.

If you suspect there may be disruptions to your supply chain:

  • Contact your suppliers, carriers, forwarders and brokers immediately to confirm.
  • If possible, build forecasted and reasonable inventories of your short raw materials and secure production and transport capacity from your supply chain partners.
  • Review your alternate suppliers lists or start sourcing alternative suppliers, as needed.
  • Consider consulting with a third-party logistics company, distributor, or group purchasing firm to determine alternate means for acquiring materials. Have your specific, forecasted needs on hand.
  • Identify a resource at your company to monitor the crisis and potential impacts to your business.
  • Develop a communications plan and standby statements for customers.

Preparing for the next disruption:

  • Complete a manufacturing Business Continuity Assessment (a risk assessment that includes your supply chain). Or, update your business continuity plan and implement changes to mitigate risks.
  • Conduct a Total Cost of Ownership (TCO) analysis to revisit overseas sourcing. Consider other countries of origin, as well as domestic suppliers who may be able to supply with shorter lead-times
    at lower transportation costs.
  • Consider dual sourcing (locally and overseas) for critical components.
  • Develop, refine, and train employees on your disaster response plan, and a broader business continuity plan. This would include a number of scenarios and risk mitigation measures.
  • Have a process to monitor global events to identify potential spikes in demand or supply chain disruptions early.
  • Contact FloridaMakes to conduct a risk assessment, help prepare a business continuity plan, and advise of available resources.

 Preventing and preparing for employee illness:

  • Promote a healthy workplace for employees to retain your team. Now is a great time to promote good health and wellness practices, especially proper handwashing. CDC guidelines:
    https://www.cdc.gov/coronavirus/2019-ncov/about/prevention-treatment.html
  • Identify critical roles – from customer service to shipping – and consider immediate cross-training, system access, and have an employee back-up plan in place.
  • Review your employee skills matrix, standard operating procedures (SOPs), and work instructions to see who can jump into other roles quickly, if needed. Contact FloridaMakes for help creating these.
  • Encourage employees to take care of themselves and their families.

 Other considerations:

  • Communication is key. Talk with your employees, customers, suppliers, distributors, carriers, and brokers about potential supply chain disruptions, and how you can work together to mitigate issues.
  • Collaborate with your regional manufacturers’ association (RMA) to keep updated on the current situation. Your RMA can connect you with local manufacturers that may be able to help with materials or contract manufacturing if your business is disrupted.
  • Remember that the impacts vary across the global supply chain, so local suppliers can also be affected based on their sources of supply.
  • Travel and workforce issues overseas can impact your local supply chain.
  • Remember that you face competing demands for global product and transport resources.
  • Review your business’ insurance coverages, financial buffer, and emergency loan options.
  • Stay tuned to reputable sources, such as the US Centers for Disease Control & Prevention (CDC) or your local US International Trade Commission office, about the issue. The COVID-19 situation is
    changing daily.
  • Additional information about business continuity: www.FloridaMakes.com/BusinessContinuity

Contact FloridaMakes now for help implementing supply chain disruption planning or a complimentary Business Continuity Assessment.
Email: info@floridamakes.com or (407) 450-7206