Law and the Workplace

New York State Issues Guidance on COVID-19 Quarantine Leave Law

On March 25, 2020, New York State published Frequently Asked Questions and other guidance regarding the state’s recently enacted Covid-19 Paid Sick Leave Law and expansions to New York’s Paid Family Leave Law (PFL) and Disability Benefit Law. This bill was signed into law on March 18 and became effective immediately as part of a statewide Coronavirus response.

The law, which we previously addressed in a prior post, requires New York employers to provide job-protected sick leave to employees who are subject to a mandatory or precautionary order of quarantine or isolation issued by the state of New York, a state or local health department, or any other governmental entity due to COVID-19. The law also provides certain qualifying employees with salary continuation during otherwise unpaid leave periods by expanding coverage under the PFL and Disability Benefit Law.

The following are some key highlights from New York’s guidance:

Available Benefits

Under the law, employees subject to a qualifying quarantine or isolation order who are not able to telework during the period of the order are eligible to take job-protected leave and will receive compensation through a combination of sick leave and, in some cases, disability and PFL benefits according to the size of their employer:

  • Employers with 10 or fewer employees and a net income of less than $1 million in the previous tax year must provide eligible employees with unpaid, job-protected sick leave through the termination date of a qualifying order. Employees may also be eligible for a combination of PFL benefits and statutory disability during the quarantine period up to a maximum of $2,884.62 per week.
  • Employers with 10 or fewer employees as of January 1, 2020 with revenue of more than $1 million in 2019 and employers with between 11 and 99 employees as of January 1, 2020 must provide eligible employees with paid sick leave during a 5 day period. After paid sick leave is exhausted, employees are eligible to receive benefits through a combination of PFL and statutory disability up to a maximum of $2,884.62 per week.
  • Employers with 100 or more employees as of January 1, 2020 must provide eligible employees with paid sick leave for a 14 day period paid at the employee’s regular rate of pay during a qualifying quarantine or isolation order period. All covered public employers, regardless of size, also must provide paid sick leave for 14 days during a qualifying order period.

In addition, all employees who are otherwise eligible for PFL in the normal course (regardless of employer size) may also apply for PFL benefits if they require leave to provide care for a minor dependent child of the employee who is subject to a qualifying quarantine or isolation order. Such PFL benefits would be available at the same rate as PFL taken for other covered reasons (in 2020, the PFL benefit is 60% of an employee’s average weekly wage, up to a maximum weekly benefit of $840.70).

The guidance clarifies that the number of paid sick days that must be provided under the law – 5 or 14 depending on the size of the employer – is based on calendar days, such that employees should be paid the amount that they would have otherwise received during the covered calendar days at their regular rate of pay for the applicable leave period. Specifically, the amount of pay is calculated based on when the employee was scheduled or would have been scheduled to work had the employee been able to continue to work during the leave period. Salaried and fixed-schedule employees should continue to receive their regular pay for the applicable period. Hourly, part-time, commissioned salespeople and other employees who are not paid a fixed wage should be paid an average daily pay rate based on a representative period of time.

Pursuant to Section 191 of the New York Labor Law, employers should make paid sick leave payments during the pay period corresponding to the workweek in which the leave was taken. In addition, the guidance makes clear that there is no waiting period for benefits claimed pursuant to the COVID-19 quarantine leave law.

Notably, employees may take leave under the new law if they remain under a qualifying mandatory or precautionary order of quarantine or isolation that was issued prior to enactment of the law. And employers are required to provide leave under the law separate from any accrued sick leave or other paid time off.

Employee Eligibility

The guidance makes clear that employees who decide independently to quarantine are not eligible for sick leave or other statutory benefits under the new law. An order, either mandatory or precautionary, issued by the State of New York, New York State Department of Health, local Board of Health or other government entity authorized to issue such order is a prerequisite for the leave benefits set forth in the law.

Similarly, employees with children whose school is closed due to an order issued by a covered government entity may be eligible for PFL benefits if they require leave to care for their children. However, a school that is closed for preventative social distancing and is not otherwise subject to a covered order will not trigger the new law’s leave entitlements.

Importantly, the guidance reiterates that employees who are not showing symptoms related to COVID-19 and are physically able to work through remote access or similar means are not eligible for paid sick leave under the law. Similarly, employees who voluntarily traveled to a country with a level 2 or 3 health notice from the Centers for Disease Control and who were provided notice of the travel health notice and knew about this restriction in the new law are not eligible for leave benefits.

Notably, the guidance is also clear that employees of employers that temporarily close or go out of business due to COVID-19 are not eligible for benefits under the new law but may be eligible for unemployment insurance benefits.

How to Apply

Employees do not have to apply for quarantine-related sick leave under the law – employers must provide such leave in qualifying circumstances upon request. However, employees of employers with fewer than 100 employees that exhaust quarantine-related sick leave or other accrued leave provided by their employer must apply for PFL and disability benefits to cover the remainder of their quarantine period. The application process is as follows:

  • The employee must complete the employee sections of the “Request for COVID-19 Quarantine Leave for Yourself” form package, which includes the “Request for COVID-19 Quarantine DB/PFL-Self (Form SCOVID19) and “Request for Paid Family Leave (Form PFL-1)” forms, and mail the completed forms to the employer.
  • The employer has three (3) business days to complete the employer sections on both forms and return them to the employee. If the employee does not receive the completed forms, he/she can nevertheless submit the application to the employer’s statutory disability and PFL insurance carrier.
  • The employee must submit the completed form package, along with a copy of the mandatory or precautionary order, to the employer’s statutory disability and PFL insurance carrier no later than 30 days from the first day of leave. The insurance carrier must then pay or deny the claim within 18 calendar days of receiving the employee’s completed request.

Employees unable to work because a minor child is subject to a quarantine order will go through the same process, but must complete the “Request for COVID-19 Quarantine Leave for Child” form package, containing the “Request for COVID-19 Quarantine PFL – Child (Form CCOVID19)” and “Request for Paid Family Leave (Form PFL-1).”

If an employee does not receive a reply from the insurance carrier within 18 days or receives a denial of PFL benefits, he/she may file a request for arbitration with alternative dispute resolution firm NAM (National Arbitration and Mediation).

Complaints

Employees may file a complaint with the New York Department of Labor if they are:

  • not provided with the required number of sick days for COVID-19 quarantine leave;
  • not properly paid for sick days for COVID-19 quarantine leave (where applicable); or
  • required to report to the worksite of a non-essential business or threatened if they do not work at a place other than their home, in accordance with NY Executive Order 202.8. Read more about EO 202.8 on our blog post here.

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As a reminder, the federal government has enacted the Family First Coronavirus Response Act which, among other things, requires employers with fewer than 500 employees provide certain full-time employees with up to 80 hours of emergency paid sick leave and part-time employees with a number of hours that would equal the hours that such employee works over a 2-week period. As set forth in the New York COVID-19 Quarantine Leave Law, employees in New York who are also covered by the federal law are eligible to receive the difference between what the federal legislation provides and what is available under the state law.

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Proskauer’s cross-disciplinary, cross-jurisdictional Coronavirus Response Team is focused on supporting and addressing client concerns. Visit our Coronavirus Resource Center for guidance.

District of Columbia Orders Closure of All Non-Essential Businesses

D.C. Governor Muriel Bower has issued an emergency order, Mayor’s Order 2020-053, (“the Order”) requiring that all non-essential businesses cease on-site operations beginning at 10:00 p.m. on March 25, 2020. The Order also prohibits gatherings of 10 or more people. The Order, as of now, will remain in effect through April 24, 2020.

The Order expressly provides that the following businesses are non-essential and thus must close: (i) tour guides and touring services; (ii) gyms, health clubs, spas, and massage establishments; (iii) theaters, auditoriums, and other places of large gatherings; (iv) nightclubs; (v) hair, nail and tanning salons and barbershops; (vi) tattoo parlors; (vii) sales not involved in essential services; (viii) retail clothing stores; and (ix) professional services not devoted to assisting essential business operations.  The Order clarifies that such non-essential businesses “may continue telework operations consisting of employees or contractors performing work at their own residences (i.e., working from home).”

The Order designates several broad categories of businesses as essential, including:

  1. Healthcare and Public Health Operations – including hospitals, clinics, dentists, pharmacies, health care suppliers, home health care and assisted living services, mental health providers, and others.
  2. Essential Infrastructure – including public works and utilities such as electricity, gas telecommunications, water, waste removal, and others.
  3. Food and Household Products and Services – including grocery stores, food banks, convenience stores, liquor stores, laundromats and dry cleaners, and others. Notably, restaurants are included in this category but only for delivery, carry out or “grab and go” food.
  4. Social Services Providing the Necessities of Life – including business and services that provide food, shelter and social services for economically disadvantaged and needy individuals.
  5. Communications and Information Technology – including newspapers, television, radio, and engineers, technicians and other individuals responsible for communications and information technology and infrastructure.
  6. Energy and Automotive – including gas stations, auto repair shops, auto supply stores, and others.
  7. Financial Services – including banks, credit unions and related financial institutions.
  8. Educational Institutions – including public and private K-12 schools, colleges and universities “but solely for the purposes of . . . [f]acilitating distance learning.”
  9. Transportation and Logistics – including businesses that ship and deliver food and goods directly to residences, taxis and ridesharing businesses, businesses that provide mailing and shipping services, and others.
  10. Construction and Building Trades – including plumbers, electricians, exterminators, roofers, carpenters, businesses that sell supplies for the maintenance of commercial and residential buildings and homes, and others.
  11. Housing and Living Facilities – including residences, group housing and shelters, university housing, hotels, and others. Hotels may not operate conference facilities, ballrooms, and dining-in facilities of their restaurants.
  12. Professional Services – including legal, insurance, notary public, tax preparation and accounting services, “but only when necessary to assist in compliance with legally mandated activities, Essential Business or Essential Government Functions.”
  13. Childcare Facilities – Such facilities are instructed that they should “should prioritize services for the children of essential employees.”

The Order also provides for the continued operation of certain “Essential Government Functions,” including “police, firefighting and emergency medical services.”

Importantly, any employee of Essential Businesses who is “suspected or confirmed to be infected with COVID-19 or any other transmissible infectious disease or who has symptoms of a cold or influenza . . . may not be engaged” in business operations.

Additionally, Essential Businesses that remain open must comply with other social distancing requirements as set forth in the Order, including separating staff by off-setting shift hours or days and maintaining a separation of at least six (6) feet among and between employees and members of the public, including when any customers, clients, or patients are standing in line or sitting in a waiting room.

The Order also prohibits large gatherings, including any event or convening that bring together, or are likely to bring together, ten (10) or more people at the same time in a single room or other single confined or enclosed space, including without limitation auditoriums, theatres, indoor or outdoor stadiums, arenas, event centers, meeting halls, conference centers, cafeterias, and any other confined indoor or outdoor space.  This limitation does not apply to Essential Businesses and groups performing Essential Government Functions.

Individuals or entities that knowingly violate the Order will be subject to civil fines, summary suspension or revocation of licensure.

Employers with questions about the order, or the effects on their businesses, are encouraged to reach out to counsel for guidance.

Our team is closely monitoring the directives being issued by the Governor and will provide updates to this post as they become available.

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Proskauer’s cross-disciplinary, cross-jurisdictional Coronavirus Response Team is focused on supporting and addressing client concerns. Visit our Coronavirus Resource Center for guidance on risk management measures, practical steps businesses can take and resources to help manage ongoing operations.

U.S. Department of Labor Releases Model Notice Required by the Federal Family First Coronavirus Response Act

On March 25, 2020, the U.S. Department of Labor’s Wage and Hour Division (“WHD”) released the model notice that covered employers must post regarding the Families First Coronavirus Response Act (“FFCRA”), along with Frequently Asked Questions regarding the notice requirements. You can read more about the recently enacted FFCRA here, as well as the WHD’s initial FFCRA guidance here.

Under the FFCRA, covered employers must provide eligible employees with paid sick leave and paid family and medical leave for certain Coronavirus-related reasons. Covered employers are also required to post a notice of the law to employees “in conspicuous places on the premises of the employer where notices to employees are customarily posted.” The WHD offered the following guidance on how employers may satisfy the FFCRA notice requirements.

Who Must Post the Notice?

The notice requirements apply to all employers covered by the FFCRA, which includes private sector employers with fewer than 500 employees and certain public sector employers regardless of size. Small business owners who are deemed covered employers are not exempt from the notice requirements. Additionally, the guidance notes that all covered employers must post the notice even if a state law provides for greater leave benefits or protections than the FFCRA.

How Should the Notice Be Posted or Distributed?

As mentioned, the law requires covered employers to post the FFCRA notice in “conspicuous places” on its premises. Importantly for employers with a significant portion of their workforce presently working remotely, the guidance clarifies that employers may satisfy the posting requirement for remote workers by: (1) emailing the notice to employees; (2) directly mailing the notice to employees; or (3) posting the notice on the employer’s internal or external website.

If an employer is physically posting the notice in the workplace, the WHD offers the following guidance on how to satisfy the notice requirement in various situations:

  • If employees report to a main office or headquarters each day and then go off to work at different worksite locations, the employer need only post the notice at the main office/headquarters so long as it is a conspicuous place where employees can see it. The employer in this case would not be required to post the notice at every worksite location.
  • If employees work in different locations and do not first report to a main office or headquarters each day, the notice must be posted in each work location, even if the locations are in close proximity to each other (such as multiple buildings on a shared corporate campus).
  • If there is a common location in a building that all employees regularly visit (such as a lunchroom), an employer need only post the notice in that location. If that is not the case, the employer should post the notice in a break room or other readily visible location on each floor of the building.
  • Employers may not satisfy the notice requirement by placing the notice in a binder, as opposed to posting it on a wall.

Who Must Receive the Notice?

Covered employers are only required to share the notice with current employees and new hires. The guidance clarifies that recently laid-off employees do not need to be provided with the notice. Employers also do not need to provide the notice to prospective employees.

What Other Things Do Employers Need to Know?

Covered employers are not required to post the notice in languages other than English. However, the Department of Labor is going to translate the notice into other languages and make those notices available to employers for their voluntary use.

With regard to ensuring that employers are posting the most up-to-date version of the notice, the guidance states that covered employers should visit the WHD website or sign up for Key News Alerts to ensure they have the most up-to-date model notice. The most recent version was issued on March 25, 2020.

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Proskauer’s cross-disciplinary, cross-jurisdictional Coronavirus Response Team is focused on supporting and addressing client concerns. Visit our Coronavirus Resource Center for guidance on risk management measures, practical steps businesses can take and resources to help manage ongoing operations.

U.S. Department of Labor Releases Guidance on the Federal Family First Coronavirus Response Act

*** Last updated March 27, 2020 ***

On March 24, 2020, the U.S. Department of Labor’s Wage and Hour Division (“WHD”) published much anticipated initial guidance on the federal Family First Coronavirus Response Act (“FFCRA”).

The WHD released a Questions and Answers on the FFCRA, a Fact Sheet for Employers and a Fact Sheet for Employees on the Emergency Family and Medical Leave Expansion Act, and other additional guidance. It is possible additional informal guidance will be issued in the coming days, and formal regulations are expected as well.  In addition, on March 25, 2020, the Department of Labor issued the mandatory notice that covered employers must post under the FFCRA.  For more information on the notice, see our blog post here.

We first wrote in detail about the recently enacted FFCRA, which includes the Emergency Paid Sick Leave Act and the Emergency Family and Medical Leave Expansion Act, here. Under these laws, covered employers must provide employees with paid sick leave for certain Coronavirus-related reasons, including being subject to a quarantine order or caring for a family member under such an order, seeking a diagnosis of COVID-19, or caring for a child whose school or place of care is closed due to Coronavirus-related reasons. Covered employers also must provide eligible employees with partially paid FMLA leave when needed to care for a child due to a school or child care closure related to the outbreak.

The following are some highlights from the WHD’s guidance.

Effective Date and Temporary Non-Enforcement Period

Under the terms of the FFCRA, the effective date of the law was to be some time on or before April 2, 2020. The WHD’s guidance provides that the effective date of the FFCRA will be April 1, 2020. The law will apply to leave taken between April 1, 2020 and December 31, 2020 and is not retroactive. Any paid leave granted by an employer prior to the effective date of the law, even if for a covered reason under the law, does not reduce the amount of paid sick leave otherwise available to an employee under the FFCRA. Nor is an employer required to provide FFCRA benefits for leaves of absence taken prior to April 1, 2020.

The guidance states that the Department of Labor will observe a temporary period of non-enforcement through April 17, 2020, so long as the employer has acted reasonably and in good faith to comply with the Act.  For purposes of this non-enforcement position, the guidance provides that “good faith” exists when violations are remedied and the employee is made whole as soon as practicable by the employer, the violations were not willful, and the Department of Labor receives a written commitment from the employer to comply with the FFCRA in the future.  After April 17, this limited stay of enforcement will be lifted, and the Department of Labor will begin fully enforcing violations of the FFCRA.

500-Employee Threshold for Private Employer Coverage

With regard to private employers, the FFCRA’s leave provisions only apply to employers with fewer than 500 employees (certain public employers are also covered, regardless of size). Following the enactment of the law, one of the key questions for many private employers is how to calculate the 500-employee threshold for coverage.

The guidance states that employees on leave, temporary employees jointly employed by the employer and another employer, and day laborers supplied by a temporary agency should all be counted to determine the total employee count for purposes of coverage. Independent contractors, as defined under the Fair Labor Standards Act (“FLSA”), should not be counted toward the total.

The guidance further states that, “[t]ypically, a corporation (including its separate establishments or divisions) is considered to be a single employer and its employees must each be counted towards the 500-employee threshold.” However, the guidance goes on to note that employers with related business entities should apply the joint employer test under the FLSA and the integrated employer test under the Family and Medical Leave Act (“FMLA”) to determine how to count employees for purposes of the Emergency Paid Sick Leave Act and the Emergency Family and Medical Leave Expansion Act, respectively. To that end, the guidance provides:

  • When a corporation has an ownership interest in another corporation, the two corporations are deemed separate employers unless they meet the joint employer test under the FLSA. If two entities are found to be joint employers, all of their common employees must be counted for purposes of the 500-employee threshold for both the Emergency Paid Sick Leave Act and the Emergency Family and Medical Leave Expansion Act.
  • Two or more separate entities are generally deemed separate employers unless they meet the integrated employer test under the FMLA. If two entities are found to be an integrated employer, then the employees of all the entities that make up the integrated employer must be counted for purposes of the 500-employee threshold for the Emergency Family and Medical Leave Expansion Act.

Pursuant to the guidance, the FFCRA applies if a private employer has fewer than 500 employees at the time an employee seeks to take applicable leave. In other words, employees whose employers have 500 or more employees on April 1, 2020, but subsequently reduce their workforce so they have fewer than 500 employees, will be eligible for FFCRA leave if, at the time the employee takes eligible leave, the employer’s workforce is less than 500 employees.

Small Business Exemption for School/Child Care Closure-Related Leave

Under the FFCRA, small businesses with fewer than 50 employees may qualify for an exemption from providing paid sick leave and/or expanded family and medical leave due to the closure of a child’s school or place of care due to a public health emergency if doing so would jeopardize the viability of the business. The Department of Labor will further specify the criteria to meet the small business exemption in forthcoming regulations. However, the guidance states that small employers wishing to elect this exemption should document why their business meets the criteria to be set forth by the Department.

30 Day Eligibility Requirement for Emergency FMLA

In order to be considered a covered employee for purposes of the Emergency Family and Medical Leave Expansion Act’s school/place of care closure leave provisions, an employee must be employed at least 30 calendar days by the employer. The guidance clarifies that an employee who is on an employer’s payroll for the 30 calendar days immediately prior to the day they seek to begin leave would be covered for purposes of the law. In addition, a temporary employee who is subsequently hired on a full-time basis may count their days previously worked as a temporary employee towards this 30 calendar day requirement.

Calculating An Employee’s Paid Sick Leave

Calculating the Regular Rate of Pay

Under both the Emergency Paid Sick Leave Act and the Emergency Family and Medical Leave Expansion Act, paid leave is to be calculated based upon the employee’s regular rate of pay. Note that “regular rate of pay,” as a general matter, includes all remuneration paid to the employee. The guidance affirms that commissions, tips, and piece rates should be incorporated into the regular rate calculation.

The guidance clarifies that, for purposes of calculating paid sick leave, an employee’s regular rate of pay will be the average of their regular rate over a period of up to six months prior to the date that the employee takes leave. If the employee has not worked for the employer for six months, the regular rate of pay will be the average of the employee’s regular rate of pay for each week worked for the employer. Alternatively, an employer may calculate an employee’s regular rate of pay by adding all compensation that is part of the regular rate over the prior six months (or lesser period of time worked) and dividing that sum by all hours worked in the same period.

Part-Time Employees and Employees with Varying Schedules

For part-time employees, paid sick leave and expanded family and medical leave amounts are calculated based on the average number of hours the employee would be regularly scheduled to work in a two-week period.

The guidance clarifies that if a full-time or part-time employee’s schedule varies, the employer may use a six-month average to calculate the average daily hours. If the employee has not been employed for six months, then the employer may use the number of hours agreed-upon when the employee was hired. If there was no such agreement, the employer may calculate the number of hours based on the average hours per day the employee was scheduled to work over the entire term of their employment.

Counting Overtime Hours for Purposes of Leave

The guidance states that overtime hours should be included for purposes of calculating the amount of leave available to an employee under both the Emergency Paid Sick Leave Act and the Emergency Family and Medical Leave Expansion Act. However, there is no requirement that an employer pay a premium for such overtime hours under either Act.

With regard to the Emergency Paid Sick Leave Act, a covered employer is required to pay sick leave up to a cap of 80 hours over a two-week period. Thus, for example, an employee who is regularly scheduled to work 50 hours would be eligible for 50 hours of paid sick leave in the first week and 30 hours in the second week. All such time need only be paid, however, at the employee’s regular rate of pay or 2/3 of that regular rate (depending on the reason for leave), up to the daily and aggregate caps set forth under the law.

The Emergency Family and Medical Leave Expansion Act requires employers to pay an employee for hours that the employee would have been normally scheduled to work, even if that is more than 40 hours in a week, at the rate of 2/3 of the employee’s regular rate of pay, up to the daily and aggregate caps as provided under the law.

Leave for an Employee Caring for a Child Because Their School or Place of Care is Closed, or Child Care Provider is Unavailable

The guidance makes clear that an employee who requires leave to care for a child whose school or place of care is closed, or whose child care provider is unavailable due to COVID-19-related reasons, may be eligible for both paid sick leave under the Emergency Paid Sick Leave Act and paid FMLA leave under the Emergency and Family Medical Leave Expansion Act.

Practically, this means the employee could utilize paid sick leave under the Emergency Paid Sick Leave Act during their first two weeks of FMLA leave under the Emergency and Family Medical Leave Expansion Act (which is otherwise unpaid leave), unless the employee elects to use existing vacation, personal, or medical or sick leave under their employer’s policy. Thereafter, the employee would be eligible to receive 2/3 of their regular rate of pay (up to the daily and aggregate caps) for the hours they would have been scheduled to work for up to the next ten weeks per the Emergency and Family Medical Leave Expansion Act.

The guidance does not provide any clarification around what, if any, certification or documentation an employer may request to confirm a bona fide need for child care leave under these provisions. This may, however, be something that is addressed by the Department of Labor’s forthcoming regulations.

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The Department of Labor has stated that additional guidance and regulations on the FFCRA are forthcoming. We will continue to monitor and provide updates as further guidance and regulations are released.

Proskauer’s cross-disciplinary, cross-jurisdictional Coronavirus Response Team is focused on supporting and addressing client concerns. Visit our Coronavirus Resource Center for guidance on risk management measures, practical steps businesses can take and resources to help manage ongoing operations.

[Podcast]: Recent Developments Associated With The Coronavirus Pandemic

In this episode of The Proskauer Brief, partners Harris Mufson, Seth Safra, Mike Lebowich and Guy Brenner discuss recent developments associated with the coronavirus (COVID-19) pandemic. Tune in as we address the latest legislative developments and issues employers should be thinking about when confronting the ramifications of this virus in the workplace.

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Listen to the podcast.

 

Proskauer’s cross-disciplinary, cross-jurisdictional Coronavirus Response Team is focused on supporting and addressing client concerns. Visit our Coronavirus Resource Center for guidance on risk management measures, practical steps businesses can take and resources to help manage ongoing operations.

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Responding to Coronavirus: Illinois Specific Considerations For Employers

The State of Illinois has taken strong measures to mitigate the spread of the coronavirus. Recognizing the impact of the coronavirus on the State of Illinois, on March 20, 2020, the Governor issued Executive Order 2020-10 directing Illinois citizens to stay at home. Executive Order 2020-10 is effective beginning at 5:00 p.m. on March 21, 2020 through April 8, 2020.

Executive Order 2020-10 also directs non-essential businesses to cease all activities in the state, except for “basic minimum operation.” “Basic minimum operation” is defined to include the minimum necessary activities to: (i) maintain the value of a business’s inventory; (ii) preserve the condition of a business’s physical plant and equipment, ensure security, process payroll and employee benefits, or for related functions; and (iii) facilitate employees of a business being able to continue to work remotely from their residences. Executive Order 2020-10 also encourages “essential businesses,” to remain open, but to practice social distancing to ensure employees and the public observe a distance of at least six feet.[1]

In addition, Executive Order 2020-10 prohibits gatherings of more than ten people, and prohibits all travel except for “essential activities” or to maintain “essential businesses or operations.” The Order permits Illinoisans to leave their homes to engage in “essential activities” related to their health and safety, obtaining health care, to obtain necessary food and supplies, to engage in hiking, running, or biking, and to care for others.

These measures, coupled with social distancing practices, have impacted businesses in Illinois. Recent reports indicate that nearly 41,000 Illinois residents filed for unemployment benefits on March 17th and 18th alone. This post addresses certain practical considerations Illinois employers should bear in mind as they navigate and respond to the implications of the coronavirus.

Changes in Employee Pay

In response to the business disruptions caused by the spread of the coronavirus, some employers have considered making changes to employees’ compensation, such as reducing pay rates. Employers that are considering such changes should be aware of requirements imposed by the Illinois Wage Payment and Collection Act (“IWPCA”). First, any changes in an employee’s rate of pay cannot be retroactive. 56 Ill. Admin. Code. § 300.630(d).   This means that compensation for hours an employee has already worked must be paid at the employee’s regular hourly rate. Second, if an employer wishes to change an employee’s pay going forward, it must provide the employee a written notice of the change in pay. 820 ILCS § 115/10; 56 Ill. Admin Code. § 300.630(d). It is a best practice to secure an employee’s acknowledgment of the change in the rate of pay before it is implemented.

Expense Reimbursement

Many employers are now strongly encouraging or requiring employees to work remotely. Thus, employers should be mindful of the fact that as of January 1, 2020, the IWPCA requires employers to reimburse employees “for all necessary expenditures or losses incurred by the employee within the employee’s scope of employment and directly related to services performed for the employer.” 820 ILCS § 115/9.5. “Necessary expenditures” is defined to mean “all reasonable expenditures or losses required of the employee in the discharge of employment duties and that inure to the primary benefit of the employer.” Id. Consequently, employers should determine whether and to what extent they need to reimburse employees for work-from-home-related expenditures.

Sick Leave

As the number of individuals in Illinois who are exposed to the coronavirus increases, employers should recognize that both the Chicago Minimum Wage & Paid Sick Leave Ordinance (Mun. Code of Chicago, Ch. 1-24-045(b)) and the Cook County Earned Sick Leave Ordinance (Cook Cty. Code of Ordinances § 42.3(b)) require employers to provide eligible employees with at least one hour of paid sick leave for every 40 hours worked (accrual is capped at 40 hours within any 12-month period, unless the employer’s policy allows for a greater accrual). Eligible employees may use paid sick leave not only for illnesses suffered by the employee or his or her family member, but also if the employee’s workplace is closed by “order of a public official due to a public health emergency” or if the employee must care for a child whose school or place of care has been closed by such an order. Cook Cty. Code of Ordinances § 42.3(c)(2)(d). The Cook County ordinance defines a “public health emergency” as “an event that is defined as such by a Federal, State or Local government, including a school district.” Id.

Anti-Harassment Policy for Remote Workers

Effective January 1, 2020, the Illinois Human Rights Act (“IHRA”) now defines “harassment” as “unwelcome conduct” on the basis of a person’s “actual or perceived race, color, religion, national origin, ancestry, age, sex, marital status, order of protection status, disability, military status, sexual orientation, pregnancy, unfavorable discharge from the military service, or citizenship status” that “has the purpose or effect of substantially interfering with the individual’s work performance or creating an intimidating, hostile, or offensive working environment.” 775 ILCS § 5/2-101(E-1) (emphasis added).  The IHRA now notes that “working environment” is “not limited to a physical location an employee is assigned to perform his or her duties.”  Id.  Thus, as employees are increasingly allowed or required to work remotely in response the spread of coronavirus, employers should review their anti-harassment policies to confirm that their prohibitions on harassing behavior extends to the remote or virtual workplace.

Emergency Response Workers

Companies that employ individuals who volunteer as emergency services workers should be aware of their obligations under Illinois’ Volunteer Emergency Worker Job Protection Act, 50 ILCS § 748/1, et seq. Covered employees include individuals who are volunteer Emergency Medical Services workers and persons who act as a “volunteer member of a county or municipal emergency services and disaster agency pursuant to the Illinois Emergency Management Agency Act.” Id. at § 748/3. Employers are prohibited from disciplining or terminating employees who miss work or respond during work hours to phone calls or text messages requesting that they perform volunteer emergency services. Id. at § 748/5. However, employers need not compensate such employees for work hours missed as a result of their volunteer service, and employers may request that the employee obtain written verification from the agency at which he or she volunteers. Id.

Employee Separations/Layoffs

Final Pay

The IWPCA requires employer to pay the final compensation due to separated employees in full, at the time of separation, if possible, but no later than the next regularly scheduled payday for such employee. 820 ILCS § 115/5. Moreover, unless otherwise provided in a collective bargaining agreement, whenever an employment agreement or employment policy provides for paid vacations, and an employee resigns or is terminated without having taken all earned vacation time, the employee must be paid for all accrued, unused earned vacation time as part of the employee’s final compensation at his or her final rate of pay. Id.

Compliance with the Illinois WARN Act

If an Illinois employer conducts a layoff affecting at least 33% of its full-time employees, or closes a facility that impacts at least 50 employees for a period of time that exceeds six months, it must comply with the Illinois’ Worker Adjustment and Retraining Act (“Illinois WARN Act”). 820 ILCS § 65/1, et seq.   The Illinois WARN Act generally requires that employers provide 60 days advance notice to the Illinois Department of Commerce and Economic Opportunity, to all employees, and to any employee representatives (if applicable where employees are represented by a union). 820 ILCS § 65/10.

The notice must include all elements required by the federal WARN Act. 29 U.S.C. § 2101, et. seq. This includes notice of: (a) whether the shutdown/layoff is expected to be permanent or temporary; (b) if the entire facility is closed; (c) when the closing or mass layoff will commence; (d) the expected date an individual employee will be separated; (e) whether “bumping rights” exist upon a return to work; and (f) contact information for a company point of contact. Similar information must be provided to state officials. If the Illinois Department of Labor determines that the mass layoff or closure was the result of an unforeseeable business circumstance such that 60 days’ notice could not be provided, the Illinois Department of Labor may excuse a shorter notice period, however, employers are still expected to comply with notice requirements. 820 ILCS § 65/15.

Unemployment Benefits for Separated or Employees Subject to Temporary Layoff

The Illinois Unemployment Act generally entitles employees who have separated from employment by no fault of their own to receive unemployment benefits if they apply for such benefits and are eligible. This includes employees who remain employed, but are subject to a reduction in hours or pay relative to their normal hours, to the extent they now earn less than they would as a weekly unemployment benefit. 820 ILCS § 405/239.  Though generally out-of-work individuals must wait seven-days before being considered eligible for unemployment benefits, Governor Pritzker’s March 16, 2020 Executive Order suspended this provision of the Illinois Unemployment Act for the duration of the “disaster” proclamation. (Executive Order 2020-07).

[1] Essential businesses are defined to include: (a) stores that sell groceries and medicine; (b) food, beverage, and cannabis production and agriculture; (c) organizations that provide charitable and social services; (d) newspapers, television, radio, and other media services; (e) gas stations and businesses needed for transportation; (f) financial institutions; (g) hardware and supply stores; (h) building, construction, and other trades that provide services necessary to maintain the safety, sanitation, and essential operation of residences, Essential Activities, and Essential Businesses and Operations; (i) mail, post, shipping, logistics, delivery, and pick-up services; (j) educational institutions; (k) laundry services; (l) restaurants for consumption off-premises; (m) businesses that sell, manufacture, or supply products needed for people to work from home; (n) businesses that sell, manufacture, or supply other Essential Businesses and Operations with the support or materials necessary to operate; (o) transportation, including airlines, taxis, transportation network providers (such as Uber and Lyft), vehicle rental services; (p) home-based care and services; (q) residential facilities and shelters; (r) professional services, such as legal services, accounting services, insurance services, real estate services (including appraisal and title services); (s) day care centers for employees exempted by the order; (t) manufacture, distribution, and supply chain for critical products and industries; (u) critical labor union functions; (v) hotels and motels; and (w) funeral services.

We will continue to monitor this evolving situation and report back on key developments as they occur.  You can also read more about our guidance to employers about Coronavirus in the Workplace on our blog, which is updated frequently.

Proskauer’s cross-disciplinary, cross-jurisdictional Coronavirus Response Team is focused on supporting and addressing client concerns. Visit our Coronavirus Resource Center for guidance on risk management measures, practical steps businesses can take and resources to help manage ongoing operations.

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