It has been a week of significant changes. Schwartz Rollins is committed to helping both Employers and Employees in what’s become the New Normal.
This morning the House of Representatives is poised to pass a $2 trillion stimulus package that was passed unanimously by the Senate earlier this week. The President is set to sign the bill into law before the day is done. Dubbed the largest stimulus bill ever passed, the legislation is really an attempt to rescue businesses and individuals reeling from the double- whammy of the Coronavirus and a shutdown economy. The bill plans to extend unemployment insurance, provide direct payments to Americans, provide loans to businesses, provide funds to hospitals, state and local governments, and provide loans to specific industries with strings attached. The centerpiece of CARES would allow small- and medium-sized businesses to receive federal loans – in some cases forgivable – to cover payroll and other expenses. It also expands unemployment benefits for workers impacted by the outbreak, while extending unemployment eligibility to many who are otherwise not regularly entitled to receive such benefits.
The most important thing in this bill for small- and medium-sized businesses appears to be the Paycheck Protection Plan. Right now, the bill provides that employers with fewer than 500 employees may receive forgivable loans to cover employee salaries, insurance, rent, and other business costs listed in the bill. This forgivable loan also extends to businesses that rehire workers who were laid off due to this crisis. The U.S. Small Business Administration is the United States government agency that provides support to entrepreneurs and small businesses. It will be in charge of these loans and you should keep your eyes on its website for additional information about how to apply for these loans.
For individuals, the bill will substantially expand jobless aid, providing an additional 13 weeks and enhancement of benefits, extending unemployment benefits for the first time ever to independent contractors, self-employed and gig workers, and adding up to $600 per week on top of the usual payment. The bill would also provide for direct payments from the federal government to taxpayers. Most adults would get $1,200, although some would get less. Single adults who have an adjusted gross income of $75,000 or less would get the full amount. Married couples with no children earning $150,000 or less would receive a total of $2,400. And taxpayers filing as head of household would get the full payment if they earned $112,500 or less. For every child age 16 or under, the payment would be an additional $500.
The Family’s First Coronavirus Recovery Act goes into law on Wednesday, April 1, 2020. At this time, it is not perfectly clear how the FFCRA paid leave impacts different classes of employees, furloughed or laid off or terminated employees. Generally, a furlough is a temporary, short-term reduction in an employee’s hours (maybe down to zero hours). The employee still remains on the payroll and there is an expectation that the employee will return to active working as soon as business picks back up. Layoffs are terminations necessitated by a lack of business, with a less fervent belief that the employee will return to work. As for both layoffs and terminations, of course, the employee is completely separated from employment and no longer on payroll. Both furloughed and terminated employees may be eligible for unemployment benefits and/or the continuation of COBRA benefits. However, many health insurance companies are waiving the minimum hours requirement for employers to remain on a company’s health insurance without having to be converted to COBRA. Employers should check with their health insurance companies regarding this possibility for furloughed employees.
There is concern that furloughed employees who (because they’re still “employees”) apply for emergency paid sick leave (EPSL) under the FFCRA may receive the regular rate of pay they were earning prior to the furlough. Until we receive different guidance from the Department of Labor (DOL), though, our position is that employees taking emergency paid leave or emergency FMLA (EFMLA) leave are paid a rate based only on the hours they’re scheduled during the furlough (not for what they may have worked prior to furlough). If their normal scheduled hours are reduced (or even zero) prior to the leave, then the paid leave would reflect this reduction.
There’s no obligation for employers to comply with this new law until April 1, 2020, although Wednesday, March 25, the Department of Labor agency released the poster that employers will need to display in order to advise employees of their EPSLA and EFMLA rights. You can find that poster on the DOL’s website. In our opinion, there’s no reason not to go ahead and post it, and, if you’re comfortable doing so, email the poster to all your employees. The more they understand their rights and obligations, the fewer uninformed questions you may get as the effective date approaches.
Additionally, the DOL has announced a 30-day non-enforcement period to allow employers to comply with the new law without suffering any penalty or fee for non-compliance. To fall under this grace period, employers must try reasonably and in good faith to comply with FFCRA.
The Georgia Department of Labor announced last week that it passed emergency rules regarding partial unemployment claims and shifted Career Center registration from in-person to online. The rule will remain in effect for 120 days or until the agency proposes or adopts a subsequent rule.
On March 16, the Georgia Department of Labor (GDOL) announced new requirements for employers filing partial unemployment claims. Under Emergency Rule 300-2-4-0.5, containing Rule 300-2-4-.09(1), impacting all partial claims filed on or after March 15, 2020:
The GDOL provides several circumstances in which employers should not file a partial claim. These include employees who:
This last item still leaves open the question of what is “permanent”. If employees are being laid off because of the COVID-19 pandemic with the plan that they hopefully will be recalled when things get back to normal, then arguably their termination is not permanent. If an employee is fired for other reasons (performance, etc.), then they are permanently terminated. If the “termination” is intended to be temporary in any way, we still recommend that employers err on the side of caution and apply for unemployment for employees laid off or terminated subject to recall.