The Coronavirus Pandemic Brings Significant Potential Legal Changes for Businesses
Coronavirus
Last week we posted about steps employers could take to prepare for the impact that the coronavirus might have on their business. Many business owners have already felt the impact of the pandemic. State and federal governments are trying to act quickly to try to address the financial impact of the pandemic on businesses and employees. This is being done through proposed legislation, the provision of information, and disaster relief programs.
Proposed Legislation
State and federal legislatures have, and are in the process of, proposing several laws aimed at reducing the negative financial impact of the coronavirus outbreak.
Federal Law
The United States House of Representatives has passed, and the Senate is considering, legislation to provide for job protections and paid sick leave for employees effected by the coronavirus. If enacted, the bill would take effect 15 days after enactment and will sunset (i.e. end) on December 31, 2020.
UPDATED 3/19/20 The Senate passed the legislation discussed below late on March 18, 2020 and it was signed into law by President Trump that same evening. The law will become effective on April 2, 2020.
Emergency Family and Medical Leave
The bill would require private-sector employers with less than 500 employees to provide up to 12 weeks of job protected leave when an employee is unable to work (or telework) in order to care for a minor child whose school or child care has been closed (or child care provider is unavailable) due to a public health emergency. A prior version of the bill granted protected leave to a significantly larger scope of “qualifying needs” and the scope of the final bill remains to be seen.
Under the proposed law, the first ten days of leave can be unpaid and, thereafter, employers would be required to pay employees, generally at two-thirds of their regular rate. The amount of the paid leave is capped at $200 per day and $10,000 in the aggregate.
Any employee who has been an employers payroll for 30 calendar days would be eligible for this leave.
Emergency Paid Sick Leave
Under the proposed legislation, private employers with less than 500 employees would be required to provide paid sick leave to employees who are unable to work (or telework) because the employee:
is subject to a quarantine or isolation order related to COVID-19;
has been advised by a health care provider to self-quarantine due to concerns related to COVID-19;
is experiencing symptoms of COVID-19 and seeking a medical diagnosis;
is caring for an individual who is subject to a quarantine or isolation order, or has been advised by a health care provider to self-quarantine, related to COVID-19;
is caring for a son or daughter due to the closure of the child’s school or place of care, or the unavailability of the childcare provider, due to COVID-19 precautions; or
is experiencing a substantially similar condition as specified by the Secretary of Health and Human Services (in consultation with the Secretary of the Treasury and Secretary of Labor).
Full-time employees would be entitled to up to 80 hours of paid sick leave and part-time employees would be eligible for paid sick leave based upon their average hours worked over a two-week period. An employers obligation to provide paid sick leave would be capped at $511 per day and $5,110 in the aggregate for sick leave use for reasons 1 through 3; and $200 per day and $2,000 in the aggregate for sick leave use for reasons 4 through 6.
The bill includes anti-retaliation provisions and treats the failure to pay required paid sick leave as a failure to pay minimum wage under federal law.
Tax Credits
The bill includes payroll tax credits for employers of 100% of the emergency family and medical leave and emergency paid sick leave an employer pays each calendar quarter. The bill also includes tax credits for self-employed individuals.
New Jersey Law
On Monday, the New Jersey Assembly passed approximately 30 measures known as the “COVID-19 Emergency Response Package.” These measures ranged from everything from schools to portages. Of note to business owners, the proposed legislation includes bills that would:
Require business interruption insurance to be constructed to include coverage for business interruption due to “global virus transmission or pandemic.”
Prevent retaliation against employees who request or take time off based on the written or electronically transmitted recommendation of a medical provider due to the employee having, or likely having, an infectious disease.
Permitting the the New Jersey Economic Development Authority to provide zero-interest loans to assist businesses in meeting payroll obligations.
The New Jersey Senate will be voting on the legislation on Thursday March 19, 2020.
New York Law
New York had plans to finalize legislation for state-wide paid sick leave, but the New York legislature suspended its legislative session due to coronavirus concerns. New York City and Westchester County already required paid sick leave for most employees.
Disaster Relief
The United States Small Business Administration is offering designated states and territories effected by COVID-19 low-interest federal disaster loans.
Informational Resources
As mentioned in our previous post, the CDC has published Interim Guidance for Businesses and Employers for COVID-19.
The New Jersey Department of Labor has also updated its website to provide information for businesses and employers impacted by COVID-19. The website includes a helpful chart of COVID-19 scenarios and potential employee benefits related thereto.
The situation and information related to the coronavirus and employers obligations is rapidly evolving. Morea Law remains available and technologically equipped to continue to guide our clients through these confusing times by telephone, email, or video conference (no in-person meetings for the time being). If you have questions about your business’s handling of coronavirus related employment or business issues, please contact us at (201) 345-5412 / (646) 503-5358 or through our online scheduling system.