If Pain, Yes Gain — Part 87: Colorado Department of Labor and Employment Issues Guidance on Statewide 3-in-1 Paid Sick Leave Law & Notice and Poster For Compliance in 2020

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Seyfarth Synopsis: Last month, Colorado enacted a ground-breaking paid sick leave (“PSL”) mandate containing three distinct types of PSL. More recently, the Colorado Department of Labor and Employment (“CDLE”) updated its website with Interpretive Notices & Formal Opinions on the law’s various types of PSL and a model notice and poster that can be used for compliance with the law’s notice and posting requirements in 2020. The CDLE has also confirmed the termination of the HELP Rules in light of the new law’s COVID-19 specific PSL provisions.

I.  Overview

As noted in our prior Legal Update, the Healthy Workplaces and Families Act (“HWFA” or the “Act”) contains a number of loose ends as written, including, but not limited to: (A) when the law’s additional public health emergency declaration provisions take effect; (B) whether the Health Emergency Leave with Pay (“HELP”) Rules providing COVID-19 specific PSL to employees in a broad range of industries were still in play as a result of the COVID-19 PSL provisions applicable to all employees under the new law; and (C) whether certain conditions required when PSL is used extend to some or all types of PSL under the law.

The guidance and other actions taken by the CDLE clarify these issues and related considerations but also appears to deviate from certain aspects of the law that seemed far less open to interpretation, and as a result, may need to be approached with a fine tuned lens at the same time.

II.  Types of PSL and Effective Dates

• Overview: As a reminder, the HWFA requires nearly all employers to provide COVID-19 specific PSL in the amount required by the Families First Coronavirus Response Act (“FFCRA”) and allow the leave to be used for reasons covered by the FFCRA until December 31, 2020. As suspected, the guidance confirms these obligations took effect following the enactment of the law.[1] As of January 1, 2021 or January 1, 2022 depending on employer size, employers will be required to allow employees to earn and use up to 48 hours of PSL for general/traditional non-COVID-19 specific reasons covered under the law. In addition to general PSL, the Act states that “on the date a public health emergency is declared, each employer in the state shall supplement each employee’s accrued [PSL] as necessary” to ensure that employees may take up to 80 hours of PSL (or a pro-rated amount if not full-time) for covered reasons specified during the public health emergency.
• Additional Public Health Emergency PSL in Question: Despite the interplay between this additional PSL and employees’ accrued traditional non-COVID-19 specific PSL contemplated by the law, the specific effective date provided for the latter and lack thereof for the former suggested a possibility that employers’ public health emergency declaration PSL obligations went into effect at the time the Act became law. Based on the guidance released by the CDLE, it appears this is not the case; rather, the guidance indicates employers’ additional public health emergency declaration PSL obligations take effect simultaneously with employers’ traditional non-COVID-19 specific PSL obligations.
• Additional Public Health Emergency PSL as of 2021: In particular, Interpretive Notice & Formal Opinion (“INFO”) # 6A “covers the 2020 requirements of paid leave” under the law while INFO # 6B covers the law’s requirements “as of 2021.” INFO # 6A provides “[t]hrough December 31, 2020, an employer must provide paid leave to an employee in [specific instances] related to COVID-19.” The specific reasons for use listed are the sole covered reasons discussed in the INFO and — apart from non-substantive differences in prose and omission of the catch-all “similar condition” absence — parallel those covered under the FFCRA. In contrast, INFO # 6B outlines the law’s general PSL requirements, which include providing “[o]ne hour of paid leave for every 30 hours worked, up to 48 hours per year,” and goes on to provide “[b]ut during a public health emergency, up to 80 hours must be provided.” It is the poster made available for compliance with the law’s notice and posting requirements through December 31, 2020, however, that most strongly suggests this issue is resolved. The poster outlines the amount and covered reasons for use of COVID-19 specific PSL required until year-end in detail, while making a one-line reference to the general amount of PSL required, as supplemented due to additional public health emergency declaration PSL when applicable, “[s]tarting in 2021.”
• Determining Employer Size & Non-COVID-19 PSL Obligations Effective Date: Relatedly, INFO # 6B provides that an employer’s size is determined in the same way as it is determined under the FFCRA. As a result, for purposes of determining whether an employer’s general and additional public health emergency declaration PSL obligations take effect in 2021 or 2022, an employer with 16 or more employees nationwide is subject to these requirements as of January 1, 2021 and employers with 15 or fewer employees nationwide are subject as of January 1, 2022. Previously, it had not been clear whether employer size would be determined on a statewide or nationwide basis.

III.  COVID-19 Specific PSL Guidance

• Overview of HWFA and HELP Rules COVID-19 PSL: As expected, the COVID-19 specific PSL INFO confirms the reasons for use of PSL and employee population covered under the Act’s COVID-19 provisions are more broad than those that were covered under the predecessor HELP Rules. As most recently amended on April 27, the HELP Rules applied to employees working in a number of industries, including those working in offices or performing office work, as well as those working in a retail establishment, among others. Prior to the Rules being terminated, covered employees were entitled to 2 weeks (up to a maximum of 80 hours) of COVID-19 PSL if they (a) exhibited flu-like or respiratory illness symptoms and (b) were being tested for COVID-19 or were under instructions from a healthcare provider or authorized government official to quarantine or isolate due to a risk of having COVID-19, compensated at two-thirds of their regular rate of pay. While the CDLE eventually confirmed suspicions that the HELP Rules were terminated as a result of the HWFA’s enactment on July 14 when the Act became law, the question of whether employees’ COVID-19 PSL entitlement under the new law could be offset due to COVID-19 PSL provided in compliance with the HELP Rules remained unanswered prior to the guidance being released.
• Offset of COVID-19 PSL Obligations in General: Addressing this issue, the guidance provides employers can count paid leave an employee already received in 2020 for any of the covered reasons for use of COVID-19 PSL under the HWFA towards the 2 weeks of COVID-19 PSL the HWFA requires in 2020, whether provided in compliance with federal or state law or pursuant to an employer’s policy. To the extent such previous leave was provided at a lesser rate of pay than the rate required when an employee takes COVID-19 PSL under the HWFA, the previous leave can still be counted towards the amount of COVID-19 PSL required under the Act, but the employer’s credit is discounted based on the difference between the amount of pay required by law and the reduced amount of pay the employee received.
• Use of Existing Paid Leave Policies For Compliance: Relatedly, the guidance provides “[c]ompliance can be through a paid leave policy not limited to COVID that an employer adopted on or after April 1, 2020, if it (A) provides the same quantity and pay rate of leave as HFWA, for all situations HFWA covers, and (B) lets employees take HFWA-required leave even if they already used their leave under the policy for other purposes (e.g., a vacation or a non-COVID-related health need).” In contrast, “HFWA-required leave must be provided in addition to leave under an employer policy that existed prior to April 1, 2020, and an employee may first use HFWA-required paid leave before using any other leave under “an employer policy that existed prior to April 1, 2020.”
• Rate of Pay When PSL is Taken: The COVID-19 PSL INFO appears to deviate from the HWFA and FFCRA in terms of the rate of pay required when COVID-19 specific PSL is taken. When an employee takes PSL under the FFCRA, the rate of pay is their regular rate or two-thirds thereof, and subject to $511/$200 daily caps and $5110/$2000 aggregate caps depending on whether the employee uses PSL for themselves or to care for another. Notwithstanding the FFCRA’s rate of pay requirements, the HWFA provides that PSL is compensated at the same hourly rate or salary and with the same benefits, including health care benefits, that the employee normally earns during hours worked, including when used for COVID-19 specific reasons in 2020, and does not reference the differing rates or any caps provided by the FFCRA. The COVID-19 PSL INFO does not align with either law, instead providing a hybrid interpretation of the required rate of pay when COVID-19 specific PSL is taken. Per the guidance, such PSL is to be paid at the employee’s regular rate or two-thirds thereof depending on whether the employee uses PSL for themselves or to care for another, in line with the FFCRA in part. In partially aligning with the HWFA as well, the guidance does not reference the $511/$200 and $5110/$2000 daily and aggregate caps on pay permitted by the FFCRA. The guidance also provides that in all instances, the rate of pay when PSL is taken must be at least the state required minimum wage.
• Employer Coverage and Exemptions: In terms of employers subject to COVID-19 specific PSL obligations under the HWFA, the law is clear that while the FFCRA applies to employers with less than 500 employees nationwide, the HWFA applies to all employers regardless of their size, suggesting it is likely that the exemptions for employers of health care providers and emergency responders,[2] as well as the small business exemption under the FFCRA are inapplicable under the HWFA. At least with respect to the FFCRA’s small business exemption, the guidance appears to confirm this point, providing the only small employer exemption under the law applies between January 1, 2021 and December 31, 2021, after the COVID-19 specific PSL provisions expire and the general and additional public health emergency declaration PSL provisions take effect for employers with 16 or more employees.
• Notice to Employer and Documentation of PSL Use: Also of note from the COVID-19 PSL guidance is that the HWFA’s notice of PSL use and documentation to verify permissible PSL use provisions appear limited to general and additional public health emergency declaration PSL, as the guidance reiterates the notice and documentation requirements provided by the FFCRA regulations.[3]
• Notice and Posting: The law requires employers to notify employees of their PSL rights pursuant to rules promulgated by the CDLE Division of Labor Standards & Statistics ("Division"), which must include requirements on inclusion of select rights and on languages in which the notice/poster is provided based on those spoken by 5% of the employer’s workforce in addition to English. Employers must provide employees with a written notice and display a poster in a conspicuous and accessible location in each establishment where employees work (with electronic communication and conspicuous web based platform distribution/posting permitted where an employer does not maintain a physical workplace or where the employee teleworks or performs work through a web-based platform). Importantly, the Act also contemplates that the Division will create and make available notices/posters that may be used for compliance. While no HWFA Rules have been implemented at this time, the COVID-19 PSL guidance provides the notice requirement can be satisfied by providing employees the latest version of INFO # 6A or the Division’s poster (effective July 15, 2020 - December 31, 2020) on paper or electronically, while the posting requirement can be satisfied by posting the Division’s poster (effective July 15, 2020 - December 31, 2020), though employers are warned to check the Division’s INFO page for the latest versions of the INFO and the poster.[4]
• Business Closure: The law provides that the notice and posting requirements are waived if an employer’s business is closed due to a public health emergency or disaster emergency due to a public health concern for the duration of the closure. The COVID-19 PSL guidance indicates that this provision does not only apply to public health emergencies warranting additional public health emergency declaration PSL use, providing that the notice and posting requirements for employers obligated to provide COVID-19 specific PSL are waived during any time an employer’s business is closed due to a public health-related emergency.

IV.  General and Additional Public Health Emergency Declaration PSL Guidance

• Overview of Law and Guidance: Outside of the effective date considerations outlined above, the text of the HWFA is far less ambiguous when it comes to the interplay between general and additional public health emergency declaration PSL and requirements either applicable to both types of leave or limited to one of the two leaves. Surprisingly, overall, the guidance is far less precise than the text of the law in this regard, making it important for employers to keep in mind that the guidance is non-binding and should not be relied on alone or where in clear conflict with the law. With that said, the guidance also expands on or clarifies some provisions of the law in a non-conflicting manner.
• Breakdown of General and Additional Public Health Emergency PSL Amounts: Under the law, employers must supplement each employee’s accrued general PSL as necessary to ensure the employee may take up to 80 hours (or a pro-rated amount of hours for employees normally working less than 40 hours) of PSL for covered reasons specifically applicable during the public health emergency declaration. While clear that all PSL must be accessible for additional public health emergency declaration covered reasons, the law is silent on whether any of the up to 80 hours is limited to such reasons for use. However, the guidance provides that during the emergency, PSL is provided as follows: (a) 48 hours for general and/or additional public health emergency declaration PSL covered reasons; and (b) 32 hours for additional public health emergency declaration PSL reasons only.
• Frontloading & Carryover of General PSL: As an alternative to tracking PSL accrual, the HWFA allows employers to frontload 48 hours of PSL to employees at the beginning of the year. However, the law is unclear on whether its requirement that up to 48 hours of accrued unused PSL be carried over to the following year at year-end applies when PSL is frontloaded. While employers had hoped the guidance may clarify this point, to much surprise, frontloading PSL in lieu of accrual is not once mentioned in the guidance. Further, the guidance does not reference the 48 hour cap on generally required carryover that is permitted under the law, instead providing that “[a]ny paid leave an employee doesn’t use by year end carries forward to the next year — except the employer is not required to let the employee use more than 48 hours of PSL in a year.” As a result, the initial guidance simply confirms that regardless of carryover balances, an employer can limit an employee’s general PSL use to 48 hours in a year. It remains to be seen whether updated guidance and/or binding regulations adopted at a later time will clarify whether, for general PSL, employers can implement “use it or lose it” policies.
• Notice to Employer: Like the HWFA, the guidance remains silent on rules for employees’ notice of PSL use when the need for an absence is unforeseeable, and reiterates that employers can adopt written policies with reasonable procedures on notice for foreseeable leave, but cannot deny PSL based on employees’ non-compliance with the policy. The guidance also confirms that notice of foreseeable PSL use can be required as soon as practicable, however, while the law imposes the additional requirement that an employer’s business be open for such rules to apply when using additional public health emergency declaration PSL, the guidance suggests that for both types of PSL use, the business must be open.
• Benefit Year Default and Rules for Deviation: Under the law, “year” generally means a regular and consecutive 12 month period as determined by an employer. However, the guidance provides a default PSL benefit year and imposes related requirements and restrictions on deviating from the default provided. Specifically, where “an employer doesn’t say otherwise, the ‘year’ when paid leave accumulates is a calendar year . . . . [A]n employer can choose a different annual cycle if (A) it tells employees in writing in advance, and (B) switching to a different cycle doesn’t diminish employee HFWA rights.”
• Collective Bargaining Agreements Providing “Equivalent” Paid Leave: Employees covered by CBAs pursuant to which they receive paid leave benefits “equivalent” to those required by the law are exempt from coverage under the HWFA.[5] Explaining the circumstance-dependent standard for “equivalent” paid leave, the guidance suggests as an example that a CBA that departs from the minimum increments of use an employer may require when PSL is taken under the law could qualify for the exemption, but a CBA would not qualify if it eliminates the right to take leave without interference or to file a complaint if the law is violated.
• Notice and Posting: The same general notice and posting requirements provided for under the law apply to general and additional public health emergency PSL. Like the COVID-19 PSL guidance, the guidance here also reads the same, with the exception that the latest INFO # 6B or 2021 Division poster will satisfy notice distribution requirement (on paper or electronically) while the latest 2021 Division poster will satisfy the posting requirement as of January 1, 2021. Importantly, however, employers should note compliance preparations along these lines are not practicable at this time because (a) the 2021 Division poster is not yet available; (b) it is possible the INFO for general and additional public health emergency declaration PSL may be updated between now and the January 1, 2021 effective date for most employers’ obligations; and (c) most importantly, it is very likely that binding regulations containing notice and posting provisions as contemplated by the law will be adopted between now and January 1, 2021.

V.  Employer Takeaways

While the preliminary guidance provides much needed clarity on a number of Colorado PSL obligations, including when such obligations take effect and to which forms of PSL they apply, there are still many loose ends outstanding as employers begin taking measures for compliance with this one-of-a-kind PSL mandate. We will continue to monitor Colorado PSL developments and inform employers of any updates as appropriate. In the meantime, here are some steps for Colorado employers to consider:

• To account for the various PSL mandates under the HWFA, implement COVID-19 specific, as well as general and additional public health emergency declaration PSL policies and/or revise existing paid leave, disciplinary, and attendance policies.
• Distribute the COVID-19 specific PSL INFO or Division’s 2020 poster to employees and post the latter in a manner compliant with the HWFA’s notice and posting requirements and related guidance.
• Monitor the CDLE’s website for updated guidance, HWFA regulations, and model posters periodically throughout the remainder of the year and closer to the January 1, 2021 effective date for the law’s general and additional public health emergency declaration PSL obligations.

With the COVID-19 and paid leave landscape continuing to expand and grow in complexity, companies should reach out to their Seyfarth contact for solutions and recommendations on addressing compliance with the various components of the HWFA, if it becomes law. To stay up-to-date on COVID-19 developments, click here to sign up for our daily digest. To stay up-to-date on Paid Sick Leave developments, click here to sign up for Seyfarth’s Paid Sick Leave mailing list. Companies interested in Seyfarth’s paid sick leave laws survey should reach out to sickleave@seyfarth.com.

 

[1] Specifically, the HWFA was enacted on July 14, 2020 and, per the guidance, its COVID-19 specific PSL obligations went into effect on July 15, 2020.

[2] The definition of “health care provider” under the DOL’s FFCRA regulations was recently found overbroad in a decision issued by the United States District Court for the Southern District of New York (“S.D.N.Y”). The nationwide impact of the decision remains to be seen, and similar litigations elsewhere and/or an appeal of this decision are possible. For more information, see our prior Legal Update on the S.D.N.Y. decision here.

[3] The S.D.N.Y. decision referenced above also took issue with the notice and documentation provisions of the FFCRA regulations, at least in part. For more information, see our prior Legal Update on the S.D.N.Y. decision here.

[4] Spanish versions of the INFOs and 2020 poster are also available here and here.

[5] If negotiated after the HWFA’s provisions take effect, the CBA must contain a clear waiver of the HWFA’s requirements.