Seyfarth Policy Matters Newsletter - April 3, 2020

Department of Labor Issues Regulations on the Families First Coronavirus Response Act (FFCRA). On April 1, the Department of Labor issued final “temporary” regulations interpreting the requirements of the FFCRA. As indicated by the Wage and Hour division, the regulations are very consistent with the Department’s most recent FAQs, but provide helpful additional guidance in several areas including: linking to IRS and SBA resources (p. 5), guidance on the rehire provisions added under the CARES Act, (p. 9), the payment schedule (pp. 9-10), counting hours when teleworking (p. 13), the effect of closures on eligibility for leave (p. 14 and note 1), defining full and part-time employees (pp. 21-23), determining the regular rate of pay (p. 31), definition of “health care provider” (p. 36), how to count employees and reaffirming the integrated employer test to reach the threshold of less than 500 (p. 38), intermittent leave including when teleworking (pp. 42-45), return to work requirements (p. 54), and interaction with existing employer leave policies (p. 59). The provisions on record-keeping and the four-year retention record requirement (p. 55) are also worth attention. It bears repeating that the requirements apply only to employers with less than 500 employees and will sunset at the end of the year. The Department enforces the FFCRA’s sick-leave requirements under the Fair Labor Standards Act procedures, which includes a private cause of action (special exception for employers with less than 50 employees), with damages keyed to the minimum wage, liquidated damages, attorney’s fees, and possible jury trials. The family leave provisions of the FFCRA are enforced under the existing provisions of the Family and Medical Leave Act, which provides for similar procedures and monetary relief, albeit not keyed off of the minimum wage (see pp. 56-58). For a deep dive on the regulations, see Seyfarth’s recent analysis here.

There remains talk on the Hill of a “Phase 4” relief package which could include more labor protections. A favorite of Speaker Pelosi’s has been an OSHA emergency temporary standard providing expedited protections for health care workers, dropped from past versions of legislation. We do not believe that the thresholds for the leave protections will be revisited.

Don’t Forget the Stimulus! As we noted last week in this space, it is worth restating that hard on the heels of passage of FFCRA, Congress passed the Coronavirus Aid, Relief, and Economic Security Act (CARES), targeted at providing financial relief for businesses and workers adversely affected by the coronavirus crisis. While beyond the scope of this newsletter, Seyfarth has compiled many resources to guide businesses through the use of the relief provided under this complex law. While questions of implementation remain as the agencies continue to issue guidance and the necessary forms, Seyfarth will continue to provide detailed updates.

NLRB Amends Union Election Procedures and Will Resume Representative Elections Despite the COVID-19 Pandemic. In June of 2018, Seyfarth correctly forecasted the NLRB, under the Trump Administration, would institute new rules for union organizing, including blocking charges. As predicted, the NLRB finalized three amendments to Part 103 of its Rules and Regulations, which the board asserts will protect workers’ rights: (1) NLRB’s blocking charge policy, (2) the voluntary recognition policy, and (3) Section 9(a) Recognition in the Construction Industry. Most important for purposes of this space is the new blocking charge rule—pausing of a union election when an unfair labor practice charge is filed—which would replace the current policy with either a vote-and-count or a vote-and-impound procedure. According to the NLRB, “[e]lections would no longer be blocked by pending unfair labor practice charges, but the ballots would be either counted or impounded . . . until the charges are resolved.” NLRB Chairman John Ring and members Marvin Kaplan and Bill Emanuel each voted in favor of the final rule. The five-member board’s two Democratic seats are currently vacant. Additionally, as Seyfarth detailed here, despite the pandemic, the NLRB announced it would not extend temporary suspension of elections and will instead resume the processing of NLRB-conducted elections on Monday, April 6th.

IRS Orders Evacuation of Nearly all Workers. This week, the IRS sent an email ordering “employees who are currently not teleworking but whose work is portable or can be adapted to work off-site" to "evacuate the work site” and either work from home or an alternate location. The email, unfortunately, did not address if or how the order would affect tax returns, refunds, or direct payments of $1,200 for most Americans that the IRS will play a large part in distributing. The order also does not address how the evacuation will affect the IRS’ critical role in the implementation of the stimulus bill aimed at assisting businesses during this pandemic. Stay tuned.

New York Passes Sick Leave Bill and Its FY2021 Budget. On March 18, 2020 Governor Cuomo signed Senate Bill S8091 into law. The State has released updated FAQs that provide some clarification on the law. Seyfarth has stayed up to date on these developments. Although the governor signed the bill, contrary to his stated antipathy toward the same, it only included COVID-19-related paid and unpaid leave benefits and did not include long-term paid sick leave benefits. The State has issued FAQs, an employee fact sheet/notice, an employer fact sheet/notice on a special website, and guidance for local health departments, all of which help clarify some of the statutory ambiguities. The leave provisions in the new law are not accessible unless they are in excess of the benefits provided by the Families First Coronavirus Response Act (“FFCRA”), which went into effect on April 1, 2020. Additionally, on Thursday, April 2, 2020, the legislature passed the Education, Labor, Housing and Family Assistance Article VII (“ELFA”) bill (one of among an array bills that make up the FY 2021 budget), which would require all employers to provide sick leave to their employees each calendar year. This bill would require employers with 0-4 employees to provide five unpaid sick days each calendar year; employers with 5-99 employees to provide five paid sick days each calendar year; and employers with 100 or more employees to provide seven paid sick days each calendar year. The ELFA bill, along with the rest of the budget bills, passed the legislatures and was sent to Governor Cuomo on Friday for signature. Seyfarth attorneys examine the bill in depth and provide key employer takeaways, here. Stay tuned for additional updates.

New York Takes Steps to Keep Small Businesses Afloat. NYC recently launched the Employee Retention Grant Program to help small businesses retain employees as businesses face decreased revenue in light of the Pandemic. This program is available to New York City businesses with one to four employees that can demonstrate at least a 25% decrease in revenue as a result of COVID-19. Eligible businesses will receive a grant covering up to 40% of their payroll for two months. Businesses can access up to $27,000. Also, in a public-private showing of partnership, Goldman Sachs’ “10,000 Small Businesses,” Tapestry, Inc.'s Coach Foundation, and Pursuit have invested in a special fund to be supervised by the NYC Small Business Continuity Fund to provide zero-interest loans to New York City's small businesses affected by COVID-19. Businesses with fewer than 100 employees who have seen sales decreases 25% or more will be eligible for loans of up to $75,000 to help retain employees and ensure business continuity. The loan can be deployed for a variety of uses, including working capital, inventory, or other investments. Additionally, as Seyfarth summarized here and here, the New York Legislature proposed two bills to assist small business: the first would waive rent payments for small business commercial tenants that have suffered financial hardship due to COVID-19 crisis; the second would expand business interruption insurance coverage.

Amendments to N.J. Leave Legislation Signed into Law. On March 25, Governor Phil Murphy of New Jersey signed S2304 into law, which calls for expansive leave protections, mainly triggered by the declaration of a state of emergency. The provisions covering sick and family leave are the most relevant. In addition to expanding the existing reasons for an employee to dip into their earned sick leave, the law now also includes the ability to use sick days in the event that it is recommended by a healthcare provider or authorized public official that an employee isolate or quarantine. The New Jersey Family Leave Act (“NJFLA”) which provides unpaid, job-protected leave in the event an employee needs to care for a family member, was also amended by the bill: An employee may receive a recommendation from either a healthcare provider or public health authority that a family member’s presence in the community may pose a risk to others and receive job-protected leave—12 weeks of unpaid, job-protected leave in a 24-month period. Seyfarth recently published a detailed analysis of these updates here.