A Coronavirus Survival Guide: Potential legal changes affect employers, employees

It’s been a month unlike any other.

On March 16, Governor Gretchen Whitmer signed Executive Order 2020-10, temporarily expanding unemployment benefits. On March 18, President Donald Trump signed the Families First Coronavirus Response Act (FFCRA), effective April 1, 2020 through December 31, 2020, providing paid sick leave and family leave protections related to COVID-19. On March 23, Governor Whitmer signed Executive Order 2020-21, Michigan’s shelter-in-place order, effectively shuttering much of Michigan’s economy. These actions have incredible implications for employers and employees. What are some of the things you need to know? Here are a few scenarios:

Q. Our business is down 80% this past week and with the governor’s shelter-in-place order, I need to let some people go. I want to make this as humane as possible. What’s the difference between a termination, layoff, furlough and temporary leave?

A. A termination and a layoff both end employment, even though the terms carry different connotations. But for most non-unionized employment settings, the legal effect is the same in the sense that the individual is no longer an employee.

The terms “furlough” and “temporary leave” are very similar. Both indicate an expectation – though not a guarantee – of a return. Both terms are essentially the same in terms of COVID-19-related reductions in workforce. For many employers, if they have liquidity and access to capital, placing employees on temporary leave or a furlough will be the best option, especially if they intend to bring the employee back within 120 days, because there are potential tax and benefit incentives.

Whether you terminate, lay off or put on temporary leave, make sure you provide the Unemployment Compensation Notice required by the state. An attorney can help you get all of the necessary paperwork together.

Q. I want to do what’s best for my employees, so I’m leaning toward placing my employees on a temporary leave. But what about health insurance? What happens to my employees if I terminate them versus putting them on temporary leave?

A. Many insurance companies will allow employees on temporary leave to be kept on the insurance policy, as long as the employer continues to pay premiums. But each plan varies. You need to figure this out with your insurance company. Good luck getting back an employee if his last memory of you is you putting him in a situation where he had no health insurance during a pandemic!

Q. If I do put my employees on unpaid temporary leave, will they still be able to collect unemployment?

A. Your employees will likely be eligible. Executive Order 2020-10 temporarily expands eligibility for unemployment benefits and broadly protects those who are absent from work for COVID-19-related purposes. The order also expands unemployment benefits from 20 weeks to 26 weeks. The order is effective until at least April 14, 2020.

Q. I’ve heard a lot about this Families First Coronavirus Response Act. What do I need to know?

A. The FFCRA is complicated. That said, it goes into effect April 1, 2020 and will last for the rest of the year. Here is a brief summary: The FFCRA includes paid sick leave for COVID-19-related purposes. It also includes paid family leave so that employees can care for a minor son or daughter in certain circumstances related to COVID-19. (This includes a situation where the employee must provide care because schools are closed.) Who it applies to and how much the employee will be paid depends on the circumstances and whether the employee can telework. Each situation will need to be reviewed. An employer pays the amounts owing under the FFCRA to their employees. The employer is refunded through tax credits factored in payroll taxes, with the ability for a dollar-for-dollar deduction.

Q. Can I just make my employees use their ordinary paid time off to avoid the administrative hassle?

A. No. Under the law, paid sick time for coronavirus, as defined by the Emergency Paid Sick Leave Act, is a right and an “employer may not require an employee to use other paid leave provided by an employer to the employee before the employee uses sick time” under the act. In other words, employees who take paid leave for COVID-19-related purposes as described under the act will not lose other available sick leave ordinarily available under an employer’s policies.

Q. Are there any exceptions that might apply?

A. Yes. For example, there are potential exceptions for the medical industry and those businesses with less than 50 employees if the requirements of the act would “jeopardize the viability” of the business. This pertains to paid family leave to care for a minor son or daughter,

Q. What if my employee leaves because of COVID-19 and then wants to come back to work? I don’t want an employee to spread COVID-19 throughout the office. But I also know that I have to be careful about asking about medical information because of discrimination laws. What should I do?

A. The Equal Employment Opportunity Commission recently reminded employers that while the Americans with Disabilities Act provides that employers cannot discriminate and should provide reasonable accommodations, this does not mean that employers must put other employees at risk. In fact, during the pandemic, employers may ask employees if they are experiencing symptoms of a pandemic virus (while keeping the information confidential) and employers may even measure an employee’s body temperature as a precaution. If you have an employee who leaves for COVID-19 and later wants to return to work, you can require that employee to obtain a physician’s note certifying his or her fitness for duty before allowing him or her to return.

Q. Are there any other laws I need to be aware of?

A. Absolutely. There’s the WARN Act, FLSA, ELCRA, COBRA and others. But you don’t need a law degree to get through this pandemic. Let me worry about those issues. Instead of giving you a bunch of legal doctrines you’ll probably forget, here is what I want you to remember right now: No matter what policies you implement and no matter what difficult decisions you have to make, make your decisions fairly and non-discriminatorily. No matter what you do, treat your employees with dignity and respect.

Conclusion

A little common sense will go a long way. Require remote work. Don’t violate the law. Follow the Centers for Disease Control and Prevention’s guidelines. Each business is unique; the best course of action will depend on your company’s circumstances. We will get through this. The last thing we need is more stress and uncertainty by ignoring our legal obligations. Our courts are burdened enough already. Let’s all do our part to keep employment issues out of the courtroom.

Anders J. Gillis is an attorney with Parker Harvey PLC. Reach him at (231) 486-4507 or agillis@parkerharvey.com. You can also read his legal blog at northernmichiganemploymentlaw.com.

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