Introduction

During these unprecedented times, news regarding COVID-19 seems to be abundant. What causes great uncertainty though is the daily law changes, updates, and clarifications on the impact of businesses. The below is intended to be a general outline bullet points and abbreviated explanations of some key points for businesses to be aware of as of March 29, 2020:

Families First Coronavirus Response Act (FFCRA)

• Effective Date – The FFCRA paid leave portions of the Act are effective April 1, 2020 and expire on December 31, 2020.
• Company Size – The FFCRA paid leave affects all small businesses with fewer than 500 employees.
• Poster Requirements – Businesses are required to provide their employees with the newly mandated Employee Rights Poster by the Department of Labor. Traditionally a poster like this can be posted in a highly used employee area on the job, such as a breakroom. However, with many employees sheltering in place, it should be distributed to all employees electronically via email or online portal. The notice can also be mailed hardcopy. Here is a copy of the notice.
• Enforcement Timeline­ – The Department of Labor is giving employers time to comply with the FFCRA. No penalties will be brought against employers for FFCRA violations committed prior to April 17, 2020 so long as the Employer is making good effort to comply with the Act.
• Paid Sick Leave – Up to 2 weeks of emergency paid sick leave (ESPL) is required for employees for illness, quarantine or school closures relating to COVID-19
• Paid Family Leave – Up to 12 weeks of emergency Family and Medical Leave Act (EFMLA), are available to those who have to leave for care of their children during school closures related to COVID-19. Although there are some exceptions, most of this must be paid out.
• Retroactivity – The Act goes into effect on April 1, 2020. Employees terminated prior to the Act would not be eligible.
• Reimbursement – Businesses will be reimbursed for these expenses by ways of payroll tax credit. However, given the immediate financial impact to businesses, there are ways to apply for more immediate dollar for dollar reimbursements. Further clarifications on this process should be coming later this week.
• Leave Eligibility – The paid leave portions are not available to everyone. Leaves are not available to terminated employees, furloughed employees, employees with reduced hours, or to employees who work at closed businesses (either permanently or those temporarily closed due to slowdowns or shelter in place orders). These employees are encouraged to file for unemployment insurance as soon as possible.

Coronavirus Aid, Relief, and Economic Security Act (CARES)

• What is CARES – The CARES Act was signed by President Donald Trump on Friday March 27, 2020. It is a $2 trillion relief bill intended to prevent economic devastation related to COVD-19. The aid not only covers individuals but also includes nearly $850 billion in forgivable and non-forgivable loans to businesses. The two covered provisions of the loans to businesses is the Paycheck Protection Program (PPP) and the Economic Stabilization to Severely Distressed Sectors (ESSDS). This Act is scheduled to end on December 31, 2020.
• What is PPP – PPP are the forgivable loans to businesses. It is a $350 billion dollar program offering loans up to $10 million dollars to small businesses so that they can meet their payroll, insurance premiums and operating expenses (rent and utilities) for eight weeks. At least 75% of the loan must be used for payroll related costs to qualify forgiveness of the loan.
• Eligibility for PPP – Businesses and non-profits (less than 500 employees) as well as independent contractors and self-employed individuals are eligible. Earnings are capped at $100,000 and wages above that are not eligible for loan reimbursement. Loan forgiveness will be reduced if borrower reduces employment. 
• Administration & Application of PPP – Loans will be distributed through the Small Business Administration Program. The process is set to be more relaxed and paperwork requirements will be streamlined. The only main requirement is proof of payroll costs. The full application process is set to be released this week.
• What is the ESSDS Act – The ESSDS Act provides $500 billion in non-forgivable loans to particular industries: airlines, air carriers, and national security businesses. It also provides loans to businesses states and municipalities; all of which will be distributed by the Federal Reserve Board.
• ESSDS Requirements and Costs of Loans – Loans to businesses must be secured by collateral and are non-forgivable. Loans made to businesses with 500 – 10,000 employees are capped at 2 percent per year and employers must maintain 90% of employment.
• What is the Economic Injury Disaster Loan (EIDL) – The EIDL program was an expansion was a part of Congress’s second emergency bill signed into law on March 6, 2020. It allows for a request for emergency grant for businesses to request up to $10,000 immediately as an advance. This cannot be used in conjunction with the above CARES Act since they overlap in nature.

Furloughs, Layoffs, Terminations and Benefits

• Definitions – A termination is simply a layoff with no anticipated rehire date; a temporary layoff is a layoff with intent to rehire (generally within 6 months); a furlough is a temporary reduction of hours, days or weeks worked with a projected start back of a normal schedule.
• What should I do with my Employees at this time – Given the CARES Act discussed above it may be best for business and employee satisfaction in the long run to retain your employees and utilize the loans appropriated for reimbursement. If you still wish to have your employee stop working it is important to note that furloughs, layoffs and terminations can still all receive unemployment insurance benefits. Employers should not feel that they have to terminate employees in full.
• Reduction of Pay – There are rules around reducing an employees’ pay. Non-exempt workers need to only be paid for hours worked, as such reduction of wages should not be necessary. A reduction in hourly wages may require due notice per state laws and cannot be retroactive. Exempt employees can have a paycut implemented based on the new workload. It is important to make a reduction like this for everyone, particular departments or particular job types. It is important to note that employees must still have a salary above the federal minimum ($684/week) or above the stricter state minimum ($1,040/week in California as example). You may not prorate exempt employee wages.
• Unemployment Concerns – Businesses do not pay unemployment insurance claims directly as they are paid through the state via all business’s unemployment insurance taxes. States are set to forgive employers due to COVID-19 terminations with concerns of increases UI tax rates in the future.

Health Insurance Benefits

• Are furloughed or reduced hour employees eligible for benefits – Employers are actually being encouraged at this time to keep employees on health benefits. The vast majority of health benefit carriers have confirmed that that will allow furloughed or reduced hour employees to maintain benefits. Health insurance is critical at this time and can be a key asset in employee retention in these uncertain times.
• Do we need employee signatures on applications or change forms – Most insurance carriers require signature of employees on applications or change forms. This can be easily captured though electronic portals that should be offered through your health insurance broker and is a standard of EVCO Insurance Services
• What other changes are health insurance carriers implementing – All carriers are offering different guidelines on provisions relating to COVID-19 relaxed rules. This includes but is not limited to: Special Enrollment Opportunities, extended grace periods for premium payment, true premium payments, re-certification, rehire waiting period, off-anniversary changes, covered services relating to COVID-19 testing and telemedicine. It is best to talk to your broker to go over your particular plans and carrier guidelines.
• Individual Special Enrollment – State Exchanges such as Covered California have opened up enrollment through June 30, 2020 for previously declined individuals who do not have coverage. Consumers may wish to sign up by March 31, 2020 to avoid the individual health mandate tax penalty (specific for California).

Health, Safety and Work from Home Tips

• Can an employee refuse to come to work due to fear of COVID-19 – Employees generally do not have the right to refuse work based on a general concern of falling ill. As such you can enforce your regular attendance policies. However, due to shelter-in-place provisions, essential businesses should show employees that they take COVID-19 seriously and are making modifications to produce a safe working environment.
• Should I send all my at-risk employees home – No you are not required to send at-risk employees home (including pregnant employees). If you choose to do this it is recommended to make work from home an option when possible or make unpaid leave available.
• Do all employees have to be paid regardless of hours worked – Non-exempt employees must be paid hours worked; exempt employees must be paid their salary regardless of hours worked. This includes work from home employees or employees who are sent home.
• Can I send home employees if they exhibit COVID-19 symptoms – Yes you should send these employees home. You should ask employees if they are experiencing fever, cough or shortness of breath.
• Can I check employee temperatures – You may check employee temperatures per EEOC guidance. It is important to note that someone who is COVID-19 positive may not record a fever.
• Does Workers Compensation laws apply to work from home – Generally yes. You should work with your workers compensation broker to discuss specifics and work with your employees on reducing in-home risk.
• Monitoring Work from Home – It is recommended to implement a work from home agreement to be signed by employee and employer. Employers must pay employees working from home just as they would in the office setting. You can require employees to log their time and report it. You may also require employees be available through online messaging and telephone applications during work hours and you may regularly check in on employees. Non-exempt employees must still take breaks per standard workplace laws.

Conclusion

President Donald Trump recently announced an expansion of shelter-in-place through April 30th, 2020. States may also impose stricter limits. As this continues to affect businesses and individuals it is important to keep a pulse on changes to the laws and newly available forms. Your broker should be a trusted resource in gaining and providing information regularly. Clients of EVCO have the ability to tap into our EVCO HR Service which provides regular updates on their COVID-19 portal, clients are encouraged to regularly login to see changes as they post. We are offering our access to EVCO HR to any non-customers through July 1st at no-cost during this epidemic. Please let us know and we'll give you access.