How should employers handle COVID-19?

The federal government and the states are responding to the challenges presented by the COVID-19 pandemic. On March 18, the federal government signed into law an emergency relief package providing many workers paid leave if they need to take time off work because of COVID-19. Below are updated resources for employers grappling with questions on how to react today and how to plan for tomorrow.

DRM recognizes many Vermont businesses are suddenly facing immensely difficult circumstances. We remain available to assist our clients through these uncertain times.

CONSIDERATIONS IF EMPLOYEES ARE STILL COMING TO WORK

Recommended Strategies

The CDC guidance for businesses is being regularly updated with recommended strategies for employers that remain open. These strategies include: (1) actively encouraging sick employees to stay home; (2) separating employees from other individuals when they arrive to work with acute respiratory illness symptoms (i.e., cough, shortness of breath) or become sick during the workday; (3) emphasizing respiratory etiquette and hand hygiene; (4) performing routine environmental cleaning; and (5) advising employees take certain precautionary steps before travelling.

The CDC also states all employers should be ready to implement strategies to protect their workforce from COVID-19 while ensuring continuity of operations during an outbreak. The CDC recommends that this plan consider, among other issues, whether an employer can establish policies and practices, such as flexible worksites (e.g., telecommuting) and flexible work hours (e.g., staggered shifts), to increase the physical distance among employees and between employees and others if state and local health authorities recommend the use of social distancing strategies.

Requiring a Sick Employee to Stay Home

Under the appropriate circumstances, employers may send home a sick employee or prevent them from coming to work if they have an objective, reasonable belief the employee’s ability to perform the essential functions of their job is impaired, or the employee presents a direct threat to the health or safety of others in the workplace. Generally speaking, any “direct threat” analysis depends on: (i) the duration of the risk, (ii) the nature and severity of the potential harm, (iii) the likelihood that the potential harm will occur, and (iv) the imminence of the potential harm. In conducting any “direct threat” analysis related to COVID-19, employers should rely on the CDC and WHO guidelines listed above in order to properly assess the risk presented by an employee’s presence at work.

In Vermont, if a non-exempt or hourly employee is sent home or prevented from coming to work, employers are not required to pay the employee for the unworked time. However, in New Hampshire, if the employee shows up to work as scheduled, the employer must pay him or her for a minimum of two hours of work. If the employee performs remote work, the employer is required to pay the employee for all hours worked. Employers should ensure they have the means to accurately track the time spent by hourly employees working from home. Additionally, employees may be eligible to take sick leave or other paid time off, as outlined below.

For exempt or salaried employees, employers will generally continue the employee’s pay during any period of absence. There are limited circumstances under which an employer may deduct a salaried employee’s pay during the employee’s absence. Employers are encouraged to consult with counsel, however, before making any such deduction.

Notifying Coworkers of an Employee’s Diagnosis With COVID-19

If an employee is diagnosed with COVID-19, employers should inform fellow employees of their possible exposure to the disease. Employers may ask, but cannot require, that the affected employee allow the voluntary disclosure of their identity. Without this consent, employers must be careful to protect the confidentiality of the affected employee, as the Americans with Disabilities Act (“ADA”) and other medical privacy laws generally prohibit employers from disclosing employees’ confidential medical information. Employers may generally inform the employee’s coworkers that they may have recently been in contact with an employee who tested positive for COVID-19, and recommend that the coworkers monitor themselves for symptoms and seek medical treatment as needed.

CONSIDERATIONS IF PLACING EMPLOYEES ON LEAVE

Leave Available When the Employee or an Employee’s Family Member Has COVID-19

Emergency Paid Sick Leave Act

Under the emergency paid sick leave provisions incorporated into the Families First Coronavirus Response Act (“FFCRA”) passed by Congress on March 18, employers with less than 500 employees are required to provide eligible employees with up to two weeks of paid sick leave if they are ill, quarantined, are seeking diagnosis or preventive care for COVID-19, or are caring for quarantined family members. The law also extends paid sick leave to an employee caring for a child whose school or child care provider has been closed.

Full-time employees are eligible for a full two weeks, or 80 hours, of paid leave. Part-time employees are eligible for paid leave equivalent to the number of hours they work on average over a two-week period. This emergency paid sick leave must be provided prior to requiring that employees use other accrued paid time off.

For employees using paid sick leave for their own illness or quarantine, the employee must be provided this benefit at their regular rate of pay, capped at $511 per day and $5,110 over the entire period of leave. If the employee takes leave to care for a quarantined individual or minor child whose school or childcare provider has been closed, this benefit may be capped at the lesser of two-thirds the employee’s regular rate or $200 per day, and $2,000 in total over the course of leave.

Smaller employers with less than 50 employees are included under this law but may request a hardship exemption from the U.S. Department of Labor, if providing leave will put the company out of business. Under certain circumstances, employers may also decline leave to workers on the front lines of the COVID-19 crisis, such as health care providers and emergency responders.

How Will Tax Credits Assist An Employer Providing Paid Leave?

The FFCRA further provides that employers may recapture benefits paid towards emergency paid sick leave or expanded FMLA protections through a refundable tax credit, applied against the employer’s Federal Insurance Contribution Act (or “FICA”) taxes. The extent of these credits aligns with the amounts to be paid eligible employees. In other words, for those employees eligible to receive emergency paid sick leave benefits up to $511 per day, the employer may claim a credit up to $511 per employee per day, and for those employees eligible to receive emergency paid sick leave or expanded FMLA benefits up to $200 per day, the employer may claim a credit up to $200 per employee per day. These credits can be claimed by employers each quarter.

Vermont Sick Leave

In addition to the new benefit outlined above, as of January 1, 2019, all Vermont employers have been required to implement paid sick leave policies, providing employees at least one hour of paid sick leave for every 52 hours worked, with an accrual cap of no less than 40 paid sick leave hours. Many Vermont employers have complied with this requirement by offering a lump sum of paid sick leave at the beginning each calendar year, or by allowing employees to generally use their paid time off for sick-related reasons, which must include care for an employee’s family members, or care for a child whose school or childcare provider is closed for public safety reasons.

Family Medical Leave Act

If an employer is otherwise subject to the Family Medical Leave Act (“FMLA”), than any employee diagnosed with COVID-19 may be eligible for additional unpaid leave, up to 12 weeks, no differently than the employee would be to attend to any other “serious health condition.” Eligible employees may also use additional unpaid leave to care for a family member with a “serious health condition.”

If an employer offers short-term disability insurance, employees may also be eligible for these benefits. Under any circumstances, employers are encouraged to consult with legal counsel to ensure compliance with all applicable laws and compliance with the employer’s internal policy documents.

Because the School or Childcare Facility for the Employee’s Minor Child Closed

Expanded Emergency FMLA

The recently-enacted FFCRA extends additional emergency FMLA protections to employees who have worked for the employer for at least 30 days, and are unable to work or telework in order to care for a minor child whose school or childcare provider is closed due to COVID-19. As with emergency paid sick leave, these emergency FMLA protections must be provided by employers with fewer than 500 employees. The emergency FMLA protections extend up to 12 weeks of leave to eligible employees, with the first two weeks of this leave period incorporating the two weeks of emergency paid sick leave outlined above. After the first two weeks of emergency paid sick leave, employers must continue to pay eligible employees the lesser of two-thirds their regular pay or $200 per day, and no more than $10,000 in the aggregate. At any point during this leave period, employees may elect to use accrued paid time off pursuant to their employers’ individual policies.

Just as with emergency paid sick leave, smaller businesses with less than 50 employees may apply for a hardship exemption from the Department of Labor if providing expanded FMLA “would jeopardize the viability of the business as a going concern.” The DOL will be issuing guidelines on applying for this exemption.

Vermont Sick Leave

As noted above, the Vermont sick leave law requires that employees be able to use accrued paid sick leave to care for a child whose school or childcare provider is closed for public safety reasons.

Because the Business Was Ordered to Close

A number of businesses that cater to larger gatherings of people, such as bars and restaurants, have already been ordered to close. Additionally, employers should remain mindful that in some other countries, such as Italy, as well as some locations in the United States, public authorities have ordered citizens to “shelter in place.” If this were to occurs in our area, most businesses will be effectively required to temporarily close, unless they are in an essential industry, such as healthcare, pharmacies, or grocery stores. If in addition to the business’s closure, employees are ordered by public authorities to quarantine or isolate, employees may be eligible for the new federal paid sick leave benefits outlined above. However, neither federal nor state law otherwise provides paid leave benefits to employees based solely on their employer’s closure.

Because the Employee Refuses to Come to Work out of Concern They Will Contract COVID-19

Employers should rely on their own policies and procedures to determine whether the employee may take time off from work. Under OSHA guidelines, however, even if an employee does not have paid time off available to them, employees cannot be retaliated against for staying at home if they have a reasonable belief reporting to work will pose an imminent and serious danger to the employee’s life or health. Employers are encourage to consult with counsel if presented with these circumstances.

Additionally, in Vermont, while employers are not legally required to allow remote work, the law does require that employers at least consider in good faith whether they can accommodate any remote work request. If an employee presents a remote work request in writing, Vermont employers must provide a written response to the request.

CONSIDERATIONS IF REQUIRED TO LAYOFF EMPLOYEES

Unemployment

The Vermont Department of Labor has published FAQs related to COVID-19.

The Vermont Department of Labor has published an online form for Unemployment Insurance claimants to establish their claim, available here.

The Vermont DOL also maintains a Mass Claims Program that allows employers who are experiencing a slowdown in business, or a temporary/permanent layoff for a group of 10 or more employees, to open claims for affected employees. A template mass layoff spreadsheet is available here. The spreadsheet contains instructions on how it can be submitted to the DOL.

At the moment, unemployment insurance claims made by impacted employees will be charged against an employer’s account. The Vermont legislature is currently considering whether to waive the impact on employer ratings caused by COVID-19 layoffs.

Health Insurance

For employees covered under an employer’s health insurance program, a layoff will be a COBRA triggering event. Even if an employer places employees on extended unpaid leave, rather than a layoff, the employer’s insurance plan may require termination of health insurance benefits. Employers are advised to review their plan documents, and contact their carrier or insurance broker, to determine how to best navigate.

If a laid off employee elects to continue insurance coverage under COBRA, an employer may elect, but is not required to, maintain contributions to the employee’s premiums.

Final Paycheck

Under Vermont law, final paychecks must be issued to laid off employees within 72 hours of discharge.

In Vermont, employers are not required to include accrued paid time in final paychecks, unless the employer’s internal policy states otherwise.

WARN Act

The federal WARN Act generally applies to employers with 100 or more employees. Covered employers undergoing a permanent plant closing or a mass layoff are generally required, with certain important exceptions, to give affected employees at least 60 days’ notice of such an employment action.

Vermont maintain its own version of the WARN Act, requiring all employers who are permanently closing or conducting mass layoffs of 50 or more employees to notify the Secretary of Commerce and Community Development and the Commissioner of Labor 45 days prior to the effective closing or layoff date that reaches the required thresholds.

There are certain conditions under which the notification period may be reduced to less than 60 days, including “unforeseeable business circumstances” and “natural disaster.” Even when these conditions apply, though, employers must still give as much notice as is practicable, which may, in some circumstances, be notice after the fact.

Notices of layoff must also be provided to all local chief elected officials or administrative officers, the local municipality, and any employee bargaining unit.

CONSIDERATIONS FOR WHEN EMPLOYEES RETURN TO WORK

Asking for a Doctor’s Note

If an employee is returning from leave taken during a COVID-19 outbreak, employers are permitted to request a doctor’s note establishing the employee’s fitness for work. As a practical matter, thought, health care professionals may be too busy during and immediately after an outbreak to provide this documentation. Therefore, employers may need to consider new approaches that lessen the burden for healthcare professionals. Certification may also be required of employees won caregiver FMLA leave, as long as the employer uniformly applies the policy of requiring such certification under all circumstances.