Over the past 48 hours, legislation at the federal and state levels has changed the rules for employee sick leave and family leave. We know that businesses and employees are trying to navigate many challenges right now and wanted to provide a brief summary of the changes that impact you. We’ll address the federal law first, then New York updates, followed by a check-in with New Jersey.
Trump Signs Families First Coronavirus Response Act
The act, which takes effect in two weeks, provides for emergency leave pursuant to the Family Medical Leave Act (“FMLA”) and paid sick leave for all small business employees.
All employers with less than 500 employees must provide the following:
- Emergency FMLA for any employee who has worked for you for at least 30 days.
- Emergency paid sick leave for all employees (regardless of when they started working for you and how much they work)
For emergency FMLA:
- Employees get up to 12 weeks for emergency FMLA. The first ten days are unpaid, after which employees must be paid at least two-thirds of their usual pay for the remaining time.
- Like the FMLA, employees may supplement those initial two weeks of unpaid leave with paid-time-off (“PTO”). Unlike the FMLA, employers cannot require that employees use accrued but unused PTO.
- Employers are not required to pay an employee’s wages in excess of $200 per day or $10,000 total.
- Employees may use this time only if they are unable to work (or work remotely) and need to care for a child whose school/place of care has been closed or the childcare provider is otherwise unavailable as a result of a public health emergency (Note: this is a big change from the initial version of the bill).
For paid sick leave:
- Employees get the equivalent of 2 weeks paid. For full-time employees, this means 80 hours. For part-time employees, a pro-rated amount equal to the average time worked in a two-week period.
Employees who cannot work (or work remotely) may use this time if:
- They have been ordered to quarantine or isolate by a physician, federal, State, or local mandate
- They are experiencing symptoms of Coronavirus and are seeking a medical diagnosis
- They are caring for an individual who is quarantined or experiencing symptoms
- They are caring for a child whose school or place of care has been closed, or the childcare provider is otherwise unavailable, as a result of Coronavirus precautions
Employees are entitled to full pay if they use this time to care for themselves and are entitled to at least two-thirds pay if they use this time to care for a family member/child. Employers are not required to pay an employee’s wages in excess of $511 per day ($5,110 total) or $200 per day ($2,000 total), depending on the reason for the employee taking leave.
Employers with less than 50 employees may be exempt from compliance by applying for a waiver and showing that compliance would “jeopardize the viability” of their business. Employers cannot require employees to use other paid leave before using this paid leave. But, the initial language prohibiting employers from changing their existing paid leave policies in response to this new law has been removed.
Employers get the following benefits:
- A 100% tax credit of the amount of qualified family leave and sick leave wages paid, subject to a cap depending on the number of days and purpose of the leave.
- Employers are not required to pay out, or let employees carry over, any unused time. Certain self-employed individuals will be able to claim a tax credit for time taken off during which they are “unable to perform” their job.
New York Emergency Relief
New law provides (1) immediate paid sick leave for New Yorkers impacted by Coronavirus and (2) official State paid sick leave later this year. This law applies to all New York employers. However, the type and amount of leave will vary depending on employer size.
For Coronavirus-related leave:
- For employers with 10 or less employees and less than $1 million in revenue, employees must be given access to paid family leave and short-term disability benefits.
- For employers with 10 or less employees and more than $1 million in revenue, employees are eligible for 5 days of paid sick leave, followed by temporary disability benefits and paid family leave.
- For employers with 11-99 employees (and employers with 10 or fewer employees and a net income greater than $1 million), employees would be eligible for 5 days of paid sick leave after which they can qualify for paid family leave or temporary disability benefits.
- For employers with 100 or more employees, employees would be eligible for 14 days of paid sick leave.
This leave can be used for employees who are “subject to a mandatory or precautionary order of quarantine or isolation issued by the State, the department of health, local board of health, or any governmental entity” or are caring for a family member subject to such an order. Employees who are asymptomatic or have not yet been diagnosed with a medical condition and are able to work (or work remotely) are not eligible. Employers must offer job protection during the leave period.
Please note that this leave will not be available once the federal law goes into effect (unless there is a scenario where the employee will receive greater benefits under the state law).
For standard statewide paid sick leave:
- For employers with 5-99 employees (and employers with 4 or fewer employees and a net income greater than $1 million), employees will be eligible for at least 40 hours of paid sick leave.
- For employers with 100 or more employees, employees will be eligible for at least 56 hours of paid sick leave.
- Less than 4 employees and net income less than $1 million? Employers must offer 40 hours of unpaid sick leave.
This should look familiar for those of you already subject to New York City’s version:
- Employees will accrue sick leave at a rate of 1 hour for every 30 hours worked (beginning at the commencement of employment or effective date of new law, whichever is later).
- Sick leave can only be used for the following purposes: (i) care, treatment, or diagnosis for the employee or a family member with a mental or physical illness, injury, or health condition; (ii) absence due to, or to avail the services of (either themselves or a family member), domestic violence, sexual offense, stalking, human trafficking, or related matters, including meeting with an attorney regarding same.
Employees are permitted to carry over up to their maximum accrual amount (i.e., 40 or 56 hours) to the following calendar year, but employers are permitted to have forfeiture clauses for unused time upon termination of employment. Statewide paid sick leave is set to go into effect 180 days following the bill’s approval.
If a business closes due to Coronavirus, employees can immediately file for unemployment benefits.
Governor Cuomo will also be issuing an executive order that requires at least 75% of employees of businesses in-state stay out of the office. Businesses providing essential services are exempt.
New Jersey Emergency Relief
New Jersey is just one of a handful of states that guarantees sick leave to employees, including for public health emergencies. This means that employees can generally use accrued sick leave if their workplace, their child’s school, or their child’s daycare facility is closed due to an epidemic or publicly mandated quarantine.
All businesses with employees in the State (even those employers based outside of New Jersey) must provide paid leave to their employees.
Sick leave is accrued at a rate of 1 hour of leave for every 30 hours worked and can be used by any full-time, part-time, or temporary employee who has worked for at least 120 days. Employees can accrue up to 40 hours (or 5 full days) of leave each year. Dozens of bills are pending to expand the State’s laws:
Sick leave laws would be expanded to cover employees who can’t work because of:
- The determination by a public health authority that the employee’s presence, or the presence of the employee’s family that the employee is caring for, would jeopardize the health of others
- A recommendation by a doctor or public health authority that the employee, or a member of the employee’s family that the employee is caring for, voluntarily self-quarantine due to suspected exposure to a communicable disease
Employees who use paid sick leave for these reasons must file a claim notice with the State. Employers will be reimbursed for any pay provided to workers under these provisions.
A bill creating an unemployment insurance fund to compensate workers for lost wages while quarantined, caring for themselves or a family member, or because their child’s school or daycare facility is closed. The fund will also reimburse businesses for wage payments made to workers. Both employee and employer are required to file a claim notifying the State and can face a fine of up to $10,000 for falsifying information.
A bill prohibiting employers from terminating or penalizing employees who request/take time off from work based on a written recommendation of a New Jersey licensed health professional because the employee has, or is likely to have, an infectious disease. Workers would be entitled to reinstatement without any changes in their terms of employment. Aggrieved employees are provided a private cause of action against the employer for any violation.
A bill expanding all insurance policies covering loss or damage to property, including business interruption, to include financial losses as a result of the Coronavirus. This would only apply to insured businesses who have less than 100 employees working at least 25 hours per week.
Independent contractors: the new rules would permit independent contractors to file claims for lost earnings with the State. Independent contractors would have to provide documentation and any benefit would be based upon their average weekly earnings from the prior calendar year.
The State’s Department of Labor has offered some guidance on interpreting existing laws in light of the Coronavirus:
- Employees who are ordered to self-quarantine, are unable to work as a result of a workplace closure or closure of a child’s care facility, or they are caring for a relative who has tested positive or has symptoms for Coronavirus, can use any sick leave days they have.
- Employees who have tested positive or have symptoms for Coronavirus, and are unable to work, can use any sick leave days they have. They may also be eligible for temporary disability insurance and workers’ compensation benefits.
- If a workplace voluntarily closes, or the employee’s hours are cut by more than 20% in a week, that employee may also be eligible for unemployment benefits.
- If a workplace is ordered closed by public officials, employees can use any accrued sick leave they have. If they use up all their sick leave and still can’t return to work, they can apply for unemployment insurance benefits.
- Employees who are concerned about working and choose to stay home (i.e. self-isolating) can use any sick leave days they have. They may also be eligible for temporary disability insurance.
- Here’s a helpful chart which breaks down various scenarios and benefits available.
We hope this provides some guidance during these confusing times. If we can be of any help, please do not hesitate to contact us.
As always, stay safe.