This is Foley’s fourth installment to the Coronavirus FAQs for Employers. We will continue to publish additional FAQs based on inquiries from clients – including best practices as this workplace challenge continues to develop.
37. Should I be checking temperatures of my employees?
There are currently no mandates under federal law requiring an employer to check the body temperature of employees and visitors coming to their facility. It is also important to note that a person may not have a fever and yet be a carrier of the virus.
The Equal Employment Opportunity Commission has also issued this guidance:
“Generally, measuring an employee’s body temperature is a medical examination. If pandemic influenza symptoms become more severe than the seasonal flu or the H1N1 virus in the spring/summer of 2009, or if pandemic influenza becomes widespread in the community as assessed by state or local health authorities or the CDC, then employers may measure employees’ body temperature.”
38. If I decide to do temperature checks, what is the best way to do them?
Employers who are considering engaging in temperature checks need to carefully think through all the potential issues and risks. First, only someone with proper training and personal protective equipment should be taking the temperature of other people. The method and accuracy of the thermometer should be considered. For example, there have been reports in the general media that temperature scanning guns have accuracy issues. Second, the person taking the temperature must have appropriate personal protective equipment so that they are properly protected. Third, necessary hygiene and sanitation procedures must be followed so as not to cause an inadvertent spread of COVID-19 or any other disease. To the extent an employer has an on-site medical staff person, that person may be most appropriate to designate for conducting temperature checks.
39. Should my employees be wearing Personal Protective Equipment (PPE) and if so, which, and how should they be deployed?
Examples of PPE include: gloves, goggles, face shields, face masks, and respiratory protection, when appropriate. Employers are always obligated under the Occupational Safety and Health Act (OSHA) and similar state laws to provide their workers with any PPE needed to keep them safe while performing their jobs. The types of PPE required during a COVID-19 outbreak will be based on the risk of being infected or spreading the virus if they are a carrier while working and job tasks that may lead to exposure.
40. What are considered essential businesses?
There is no uniform definition of what is an essential business. A number of states and municipal governments have issued various types of Shelter in Place and other executive orders restricting business activities and mobility of people. Some governments have instituted night curfews. Each order is different and each order defines what it determines to be an essential service. You should consult the order that apply to your location. However, note that even if a business is considered “essential,” not all employees can or should continue to come to work. Employees who are able to work remotely likely should be provide equipment and the opportunity to do so. Regardless, employers should follow CDC and local public health authority social distancing guidelines.
41. What is the difference between a furlough and layoff and how do I explain it when announcing it?
The terms furlough, lay off, reduction-in-force have no independent legal meaning. However, in the common parlance since the outbreak of the Coronavirus pandemic, furlough has come to mean placing an employee on a temporary, unpaid cessation of work with the hopes that as soon as the pandemic abates the employer will be able to recall the employee to work (i.e. a temporary unpaid leave of absence). A layoff has come to mean a severing of the employment relationship. Because of the various ways these terms are bandied about, the better practice is to always communicate a change in anyone’s employment status in advance and in writing. In fact, some states and municipalities require advance notice of any change in terms of employment. This would also be true for any employer contemplating reducing compensation; always put in in writing in advance. Additionally, these terms may have special significance under the provisions of your benefit plans, such as Group Medical Insurance. Before making any change in your employees’ status make sure you use the correct terminology for your particular plans.
42. If I allow employees to telework during this Pandemic, will that mean that I will have to allow teleworking as an accommodation in the future for persons with disabilities under the ADA?
Not necessarily, but maybe and only time will tell. These are highly unusual times and what steps an employer takes now to continue to operate in the face a world pandemic should not became binding precedent for the future once the crisis abates. However, the nature of work may radically change based upon the ultimate experience of business in general, and with respect to a particular employer’s business. The manner in which a company manages though the current crisis may in fact provide support that for the conclusion that allowing employees to work from home is not reasonable or feasible for the business or a particular position. On the other hand, the opposite may also be true. Unfortunately, it is impossible to predict how courts or agencies will use a company’s practices during this crisis to determine whether a remote working scenario is a reasonable accommodation down the road.
43. Can an employer treat those employees in a vulnerable population (e.g., over the age of 65 or pregnant) differently than other employees?
Generally yes, but be careful. As noted in our prior FAQs, every employer has an obligation to take reasonable steps to protect the health and safety of all of its employees. Employees who are more vulnerable because of their age or due to individualized health issues may be placed at higher risk by having to come to work during the pandemic. Therefore, more susceptible individuals may need different treatment. However, employers who issue blanket proclamations such as “All employees over age 65 must stay at home” face a great risk of violating age discrimination laws. Consult with an attorney before taking action with respect to individuals who are older or in other vulnerable populations.
44. I plan to cut salaries across the Board. Are there any special considerations for employees working at my company that are temporary visas?
Yes, Employees who are H1-B and E-3 visas must be paid the prevailing wage that was set by the US Department of Labor at the time the employer applied for the visa. Currently, there are no exceptions. Other types of business visas such as L and O visas are not dependent on the employer paying a determined prevailing wage and employees holding those types of visas may have the pay reduced.
45. If I furlough, but not terminate an employee with the hopes of recalling them as soon as the pandemic is over, will they still be eligible for unemployment compensation?
Probably. Whether furloughed employees are eligible for unemployment compensation varies by state. However, many states have relaxed their standard requirements in response to Covid-19. Further, the CARES Act has temporarily resolved this issue by extending unemployment benefits to those who may not be eligible at the state level. Generally, as long as the individual’s unemployment is connected to the COVID-19 outbreak, and they meet other eligibility criteria, they will be eligible for benefits. Furloughed employees may qualify under applicable laws, as do part-time workers, freelancers, independent contractors, and the self-employed.
46. If I reduce my employee’s work hours and/or cut their pay, will they be eligible for partial unemployment compensation benefits?
The determination of whether an individual will be eligible for partial unemployment benefits is within the sole discretion of each state’s unemployment agency. Each state has its own rules regarding how many hours a week an employee can work, and/or how much an employee can earn in one week before they are no longer eligible to receive partial benefits. Whether an individual is eligible for partial benefits is directly tied to their standard Weekly Benefit Amount (WBA) that they would receive if they were fully unemployed. Each state’s unemployment agency determines an individual’s WBA based on its own state formula, which typically requires information regarding the employee’s earnings during the state defined “base period.”
In order to accurately calculate whether the individual is eligible for partial benefits, and if so how much, this requires the individual’s WBA. We do not advise employers estimate the individual’s WBA because this is not a reliable method for determining whether an individual will be eligible for partial benefits. The calculation for a WBA is fact specific for each individual and will often require information outside of the employer’s knowledge. For example, if the individual worked for a different employer during the base period, the employer will not have the individual’s prior earnings to determine the WBA.
Because employers are not the ones granting unemployment benefits, employers should explain to the employee that they should apply for unemployment and that the employer will respond to any such claim in a timely fashion pursuant to applicable state law.
47. If my State has a Shelter-in-Place, Stay-in-Place, or Safer-at-Home (SiP) Order, does that mean that my employees are entitled to paid sick leave (PSL) benefits under the Families First Coronavirus Response Act?
No. According to the Department of Labor Guidance (DOL Q&A Nos. 23-25), if your business closes (and you therefore send your employees home) due to slow work conditions or because of a State SiP Order, employees are not entitled to FFCRA benefits; rather, employees may apply for unemployment insurance benefits through their State Unemployment Compensation Department. The key to understanding the FFCRA benefits from the DOL’s perspective is as follows: If the employer remains open for business, and the employee is required to be at home due to one of the reasons outlined in the Act, and the employee cannot perform any of his/her duties and responsibilities from home (i.e., teleworking), then FFCRA benefits are generally available.
48. If I provide PSL under the FFCRA, how do I get the “tax credits” and how much tax credit am I entitled to?
According to the IRS, reimbursement for employers who provide FFCRA paid benefits will be “quick and easy” to obtain. It is an immediate “fully refundable” dollar-for-dollar tax credit against the employer’s payroll taxes (including Medicare tax and Social Security tax). And, where the offset is insufficient to cover the paid benefits provided under the FFCRA, the IRS contends that it will send a refund for the difference as quickly as possible. Normally, when an employer pays its employees, it is required to withhold from its employees’ paychecks, federal income taxes and the employees’ share of Social Security and Medicare taxes. The employer is then required to deposit these federal taxes, along with their share of Social Security and Medicare taxes, with the IRS and file quarterly payroll tax returns (Form 941 series) with the IRS. Pursuant to the FFCRA, the employer may now retain the amount of the payroll taxes equal to the amount of FFCRA paid benefits provided, rather than deposit them with the IRS.
The payroll taxes that are available for retention include withheld federal income taxes, the employee share of Social Security and Medicare taxes, and the employer share of Social Security and Medicare taxes with respect to all employees. In addition, if there are not enough payroll taxes to cover the cost of paid benefits provided under the FFCRA, the employer can file a request for an accelerated payment from the IRS. The IRS currently expects to begin processing these requests sometime in April 2020. The IRS has started to release details of this new, expedited procedure, though we expect more details will be issued in the coming days.
Examples
If an eligible employer paid $5,000 in sick leave and is otherwise required to deposit $8,000 in payroll taxes, including taxes withheld from all its employees, the employer could use up to $5,000 of the $8,000 of taxes it was going to deposit for making qualified leave payments. The employer would only be required under the law to deposit the remaining $3,000 on its next regular deposit date.
If an eligible employer paid $10,000 in sick leave and was required to deposit $8,000 in taxes, the employer could use the entire $8,000 of taxes in order to make qualified leave payments and file a request for an accelerated credit for the remaining $2,000.
Save Your Receipts/Evidence of Payment of Benefits
The IRS administers the tax credit, so some employers may be subject to an IRS audit. DOL advises that an employer should retain appropriate documentation, including any needed substantiation to support the credit. For example, if an employee takes expanded family and medical leave to care for his or her child whose school or place of care is closed, or a child care provider is unavailable, due to COVID-19, it is advisable that an employer require its employees to provide documentation in support of the leave to the extent permitted under the certification rules for conventional FMLA leave requests. For example, this could include a notice that has been posted on a government, school or day care website, or published in a newspaper, or an email from an employee or official of the school, place of care or child care provider.
49. How does one calculate the amount of the benefit provided to employees for PSL and paid EFML (expanded family medical leave) under the FFCRA?
First, an employer must know the employee’s “regular rate.” The employee’s regular rate is average of the employee’s regular rate of pay over a period of up to six months prior to the date on which leave is taken. For employees who are paid with commissions, tips, or piece rates, these amounts are incorporated into the calculation to the same extent they are included under regular rate determinations for the Fair Labor Standards Act.
Second, PSL is paid at the employee’s average regular rate for up to 80 hours. This amount is capped, however, at no more than $511/day and $5,110 for the entire 80-hour period. And, EFML is paid at 2/3rds of the employee’s average regular rate of pay for up to 10 weeks. The caps for EFML are $200/day or $10,000 for the entire 10-week period.
50. If I provided my employees with paid leave prior to April 1, am I able to take a tax credit for the amounts provided?
No.
51. If I want to advise my employees about UC (unemployment compensation) benefits, what UC benefits are they entitled to under the CARES Act?
Under the CARES Act, eligible employees will receive an extra $600 per week in unemployment benefits in addition to what they are eligible for under existing state programs. This boosted payment will last for approximately four months until its current expiration date of July 31, 2020. The CARES Act also provides for an additional 13 weeks of continued $600 weekly payments for individuals who remain unemployed after exhausting their state unemployment benefits. This means eligible workers will be able to receive unemployment benefits for up to 39 weeks rather than the 26-week cap provided the state in which the employee resides, enters into, and participates in, the program. Because employers are not the ones granting UC benefits, we advise employers to explain to the employee that they should apply for unemployment and that the employer will respond to any such claim in a timely fashion consistent with applicable state law.
52. If I decide to seek a loan or other financial support under the CARES Act, am I foreclosed from receiving the loan or other support if I had to lay off employees already?
Potentially yes. The answer to this depends on which loan under CARES Act you are seeking. If you are a small business, under 500 employees, seeking a loan under the Paycheck Protection Act, employers may still take advantage of its benefits if it rehires its employees by June 30, 2020. If you are a midsize business between 500 and 10,000 employees, you must retain at least 90 percent of your employees at full pay as of the time the loan is received through September 30, 2020 along with other post-pandemic certifications about restoration to full compensation and benefits not less than 90 percent of employees whose employment was terminated or whose compensation was reduced between February 1, 2020 and the time of the loan.
53. If I have laid off employees already, but want to bring them back in order to apply for CARES Act financial support, how do I do that?
See the discussion to the prior question (No. 52) and determine under which loan program you are eligible and offer positions back to your furloughed/laid off employees as set forth above. If you are not restoring the entire workforce, ensure that your decisions are made based on legitimate, nondiscriminatory business reasons that you can support if challenged.