New State and Federal Laws in Response to the COVID-19 Crisis as of March 19, 2020

COVID-19’s harm is as much economic as it is medical. The deadly virus has unraveled years’ worth of economic growth within a matter of weeks. Governments are doing their best to relieve its economic impact on both employees and employers, as both are finding themselves with economic stability. 

Two new laws were passed today, and both will have a major impact on employees and employers. Federally, President Trump signed into law the Families First Coronavirus Response Act. This bill relieves economic pressures on both employees and employers both by augmenting existing federal law and adding additional protections unique to the coronavirus’ impact.

Additionally, California Gov. Gavin Newsom signed an Executive Order easing the WARN Act’s requirement that employers give 60 days’ notice before layoffs.

1. FEDERAL LAW

The Families First Coronavirus Response Act protects those employees affected by COVID-19. Normally, under the Family and Medical Leave Act (FMLA)—the federal law providing most employees their medical leave rights—an employee’s benefit is job security, not money, as FMLA leave is unpaid.

But the Families First Coronavirus Response Act changed this. Beginning fifteen days from now and through December 31, 2020, sick employees taking leave may receive their full pay up to $511 per day, or $5,110 total for the period. If the employee takes leave to care for children whose schools or daycares have closed, the employee is paid at two-thirds of his or her regular rate of pay, with a maximum of $200 per day or $10,000 total.

Employees are entitled to this paid leave; there is no requirement to exhaust vacation or sick time before payment kicks in. The main caveat is a ten-day waiting period before the paid-leave benefit applies. Employees can use existing sick or vacation time to cover these days.

Even more important is the new law’s scope. While the FMLA only applies to employers with 50 or more employees, the new law upends that requirement. Now, employers with 500 or fewer employees must comply with the laws, making the 50-employee requirement effectively null.

An employee may qualify for these protections if any of the following apply:

1. 1. 1. The employee is subject to a COVID-19-related quarantine or isolation established by a federal, state, or local authority;
      2. The employee is caring for an individual subject to a federal, state or local quarantine order because of COVID-19;
      3. The employee is caring for an individual advised to self-quarantine due to concerns related to COVID-19;
      4. A health-care provider has advised the employee to self-quarantine because of concerns related to COVID-19;
      5. The employee is experiencing symptoms of COVID-19 and seeking medical diagnosis or treatment;
      6. The employee is caring for the employee’s child, if the child’s school or childcare facility has been closed due to COVID-19 precautions;
      7. vii.The employee is caring for the employee’s child, if the child’s care provider is unavailable due to COVID-19 precautions; or
      8. viii.The employee is experiencing any other substantially similar condition specified by Health and Human Services in consultation with the Department of the Treasury and the Department of Labor.

The new law cuts employers a break, too.  Most notably, employers may generally receive tax credits for 100 percent of what they pay out to employees. The Secretary of Labor may exempt a business with 50 or fewer employees. And employers with fewer than 25 employees need not restore employees to their previous positions.  These are just a few of the provisions aimed at easing economic pressure on employers blindsided by COVID-19’s impact.

2. CALIFORNIA LAW

Governor Gavin Newsom gave California employers further relief. Now, an employer laying off employees because of the COVID-19 pandemic can use the newly created “unforeseen business circumstances” exception to the state’s WARN Act requirements.

Usually, employers conducting layoffs must give notice at least 60 days in advance. This requirement applies to temporary layoffs too, such as layoffs for only a period of a few months. If they do not give notice, the employee may be entitled to payment for the unnoticed days. So, absent exceptions, an employee given layoff notice only 45 days before his last day may receive 15 days of pay from the employer.

Gov. Newsom’s new executive order changes that rule. Now, notice of layoffs only require as much notice as is practicable. This makes sense. Unlike traditional layoffs, neither the employee nor the employer knew local and state governments would force businesses to close.

But an employer’s layoff notice has particular requirements to be able to fit within the newly created exception. Aside from the information typically required under California’s WARN Act, any mass layoff, relocation, termination, or closure caused by COVID-19 must attribute the cause as such. That is, the less-than-60-days-notice must explain that COVID-19 caused the business circumstance that was “not reasonably foreseeable as of the time that notice would have been required.” The notice must also state: “[i]f you have lost your job or been laid off temporarily, you may be eligible for Unemployment Insurance (UI).  More information on UI and other resources available for workers is available at labor.ca.gov/coronavirus2019.”

Next week, California’s Labor and Workforce Development will guide the public as to how Governor Newson’s Executive Order will be implemented. This will help, but we encourage both employers and employees to seek the advice of legal counsel. Seeking legal counsel is the surest way to mitigate the risk of legal exposure and ensure that legal obligations are being met. The attorneys at Dhillon Law Group are happy to provide consultation services to both employers and employees on these challenging and complicated, but hopefully helpful new laws.