By Michael P. Thomas

 

Now that COVID-19 has arrived in Catawba County, we wanted to update our clients on legal changes made in response to the health care situation and highlight a few points. 

 

Expanded Unemployment

Governor Cooper has expanded unemployment eligibility in North Carolina to include layoffs and reduced hours resulting from the COVID-19 outbreak. The scope of this expanded coverage is not entirely clear.  As of now, the North Carolina Division of Employment Security (NCDES) says an affected employee has to apply to find out if she is covered. Since the benefits are in response to an unprecedented situation, our hope and expectation is that benefits will be allowed in most situations where the Employee and Employer agree the layoff or reduced hours are as a result of the COVID-19 outbreak.

The most important thing for employers to know is that these unemployment claims are non-charging – meaning they don’t affect your experience rating. 

 

Federal Response

President Trump signed the Families First Coronavirus Response Act (“FFCRA”) on March 18.  In addition to changes in Medicare and Medicaid for testing and COVID-19 treatment, FFCRA includes several employment changes which we’ll address here. 

 

Paid Leave for Parents Employed by Employers with fewer than 500 Employees.

The FFCRA included the Emergency Family and Medical Leave Act (“EFMLA”), which goes into effect April 2, 2020

While the specifics are more detailed, in general, the EFMLA provisions apply to all private-sector employers with FEWER than 500 Employees and requires that they provide leave (as described below) for employees who have been employed for at least 30 days and who are parents and who are unable to work (in-person or remote/telework) because their minor child(ren)’s school or child-care service is closed as a result of COVID-19.   No other leave is covered by the EFMLA, but FMLA coverage remains for employers and employees covered by normal FMLA rules.

The 1st 10 days of this leave are unpaid under EFMLA, but the parental employee can use accrued PTO or other sick/vacation time at her discretion, including the new federally mandated paid sick leave discussed below.

The remaining 50 days of leave must be paid 2/3’s of the Employees regular rate based on regular hours, capped at $200/week and $10,000, total. 

Just like FMLA leave, EFMLA leave is job protection.  An employee who takes EFMLA leave must be restored to the same position.  

Employers with fewer than 25 Employees are excepted where the position is eliminated because of COVID-19 or the related economic downturn.  To meet this exception, the employer has to take reasonable steps to offer the employee an equivalent position if available and make efforts to bring the employee back for up to a year after the leave ends.

There are exceptions for health care and other emergency response workers.

 

Emergency Paid Sick Leave

The FFCRA also includes the Emergency Paid Sick Leave Act (EPSLA) which also goes into effect April 2, 2020 and which provides that most private employers with fewer than 500 employees will have to provide 2 weeks of paid sick leave to employees who are out of work because the Employee may or does have COVID-19 or exposure to the coronavirus (e.g. quarantine, isolation, seeking treatment); is caring for someone who is quarantined or isolated because of exposure to the coronavirus, or is out of work to care for a child whose school or child care is closed due to COVID-19 precautions. 

Paid sick leave is capped at $511/day and $5,110 total if the employee is out for their own exposure to coronavirus or COVID-19 illness.

Paid sick leave is capped at $200/day and $2,000 total if the employee is out because she is caring for another. 

Retaliation and discrimination against employees who invoke their rights under EPSLA is prohibited.

There are exceptions for health care and other emergency response workers.

 

Refundable Tax Credit for Payments of Paid Leave/Sick Time

The FFCRA provides a refundable tax credit – against the Employers’ federal payroll tax obligations (Social Security and Medicare).

There is also a refundable credit against self-employment taxes for self-employed individuals who would have been able to receive Paid Sick Leave under the EPSLA were they employed by another employer, subject to limitations. 

Employers with fewer than 50 Employees can seek exemption in limited circumstances, which will likely take the tax credit into account. 

 

If you have specific questions about how these new laws apply to your business, contact Michael Thomas (mthomas@phd-law.com or 828.322.7741)