Surviving Difficult Times: What Employers Need to Know Now - PART 3

Given the federal government’s rush to pass three COVID-19 stimulus packages in rapid succession, it is no surprise that numerous aspects of the legislation have been difficult for employers to untangle. The US Department of Labor (also “DOL”) and other governmental departments have since attempted to clarify the law’s provisions. Using the information provided by the government, the following is intended to shed some light on the more confusing aspects of the Families First Act (“the Act”). A summary of the latest developments from the Commonwealth of Massachusetts regarding unemployment compensation also follows.

In the firm’s article dated March 20, 2020, we chronicled the two key aspects of that law, namely the two weeks of emergency sick leave and the 12 weeks (10 of which are paid following the two-week elimination period) under the Family and Medical Leave Act (FMLA). This article picks up where that article left off.

UPDATE ON FEDERAL PAID MEDICAL LEAVE

Looking at the paid family leave provisions within the Families First Act, the Act specifically states that the new leave will follow the FMLA. Based on the most recent guidance from the US DOL, the following clarifications have been issued:

• An employee is entitled to only 12 weeks of total leave. The Families First Act does broaden the FMLA to include employees who may not otherwise be eligible for FMLA leave (for example they only need to have worked for the employer for 30 days, not a year). Also it expands the definition of what the leave can be used for (by adding COVID-19-related leave reasons). But, if an employee has already recently taken some portion of his or her FMLA-qualified leave for a reason unrelated to COVID-19, those days or weeks already taken during the measurement period reduce the amount of FMLA leave he or she can take for a COVID-19-related reason. For example, if a person was out of work for 3 weeks on FMLA leave in January for surgery, he or she has only 9 weeks of FMLA remaining to use for COVID-19-related reasons.
• An employer and employee may agree to supplement the paid leave under the Families First Act by using employer-provided paid leave time--without the employer losing the tax credit. The Families First Act provides that an employee who accesses the 12 weeks of leave may receive two-thirds of their daily rate of pay (up to $200/day) at the start of the third week of qualified leave taken. The employee only receives two-thirds of their gross daily pay (or the $200 cap) -- whichever is lower. So, both employers and employees have wondered whether an employer may supplement the government-funded leave by making up some or all of the shortfall without the employer losing the tax credit. The answer is yes. An employer who chooses to cover some or all of the shortfall will not lose the tax credit tied to this program. As to how this may occur, it is anticipated that an employer who does supplement an employee’s wages will do so by requiring the affected employee to draw down a corresponding portion of his or her paid time off -- such as accrued sick or vacation time.
• Employees must have a family/guardian relationship with the person for whom they are seeking paid family leave under the Families First Act. When the Families First Act was passed, it stated that employees could take the paid leave if they were caring for “a person” affected by the coronavirus and otherwise met the eligibility requirements for coronavirus-related leave. It did not provide any guidance on how broadly “a person” was to be defined. Under recent clarifications from the DOL, the “person” for whom the employee hopes to provide care under the Families First Act must fall within the “family” definition found in the FMLA: namely the employee’s spouse, children, or parents, or someone who resides in the employee’s home and for whom the employee has an obligation to provide care.
• The Department of Labor expanded Families First Act paid leave to include children 18 years of age or older in certain instances. Under the Families First Act as written, a parent or legal guardian could take approved paid leave only for a child under 18 whose school or day care is closed. Recently, the DOL confirmed that the age limit of 18 does not apply to a person who has a physical or mental disability and whose caregiver cannot provide care due to COVID-19 restrictions. A parent or legal guardian needing to take this leave for an adult disabled child now also has access to this leave.
• Paid leave under the Families First Act ceases if the employee is furloughed or terminated while on paid leave. When an employee goes on paid family leave under the Families First Act, people have asked “What happens to the employee’s paid leave if the employee is furloughed or terminated while on paid Families First leave?” The answer is that the paid leave does not continue, regardless of whether the business remains open or closes during the furlough. The new law does not prohibit an employer from laying off or furloughing (giving short-term unpaid leave) an employee as long as the layoff or furlough of that employee is not predicated on the employee having accessed this protected leave. When an employee is furloughed or laid off, their receipt of paid sick leave also ends at that time. However, the employee will be able to collect unemployment benefits. Note that the federal supplement added to the unemployment insurance payments from the Commonwealth may actually equal or exceed the two-thirds of the daily rate amount the employee was receiving under the Families First Act’s FMLA paid leave provisions.

The COMMONWEALTH of MA ISSUES NEW GUIDANCE ON ROLLOUT OF ENHANCED UNEMPLOYMENT BENEFITS UNDER FEDERAL PROGRAMS

On Thursday April 9th, Massachusetts Governor Baker provided an update on the Commonwealth’s roll-out of the enhanced unemployment benefits under the recently passed federal stimulus acts. Readers will recall that the federal stimulus programs contained two federal unemployment benefits enhancements for people who are otherwise eligible to receive unemployment compensation from the Commonwealth. It also contains a third program for people who were otherwise not eligible for unemployment benefits (such as independent contractors and others who work in the so-called “gig” economy and do not make payments into the unemployment insurance program). The first two programs are called the Federal Pandemic Unemployment Compensation Program and the Pandemic Emergency Unemployment Compensation (PEUC) Program. The third program is called the Pandemic Unemployment Assistance (PUA) Program.

The Federal Pandemic Unemployment Compensation (FPUC) Program (a.k.a. the $600/week federal supplement)

Under the FPUC program, people collecting unemployment benefits will receive an additional $600 per week beyond what they otherwise receive from the Massachusetts Department of Unemployment Assistance (DUA), retroactive to March 29, 2020. This $600-per-week enhancement will continue until the date on which the employee has either returned to work/found new employment, or July 31, 2020, whichever date occurs first. The governor’s office recently indicated that individuals who are presently on unemployment benefits and who are eligible for this FPUC program benefit should begin receiving payments this week. Individuals whose unemployment claims have not yet been processed or approved will, once their claim is approved, begin receiving both the Commonwealth’s portion and the additional $600 commencing when they receive their first unemployment check.

The Pandemic Emergency Unemployment Compensation (PEUC) Program (a.k.a. the 13-week extension of unemployment benefits.)

Under the PEUC program, individuals who exhaust their regular unemployment benefits will be eligible for a federal extension of up to 13 weeks. The first week to which this extension may apply is the week of March 29, 2020 and the last week it may cover is the week ending December 26, 2020. According to the governor’s office, the Commonwealth is still awaiting guidance from the federal government on how this 13-week extension plan will be operated before it may be implemented. At present, there is nothing applicants need to do other than check for updates. As soon as the Commonwealth hears from the federal government it will make further information available and roll out this benefit.

The Pandemic Unemployment Assistance (PUA) Program (a.k.a. unemployment for “non-employee” workers.)

Under the PUA program, the federal government will make unemployment benefits available to individuals who are not otherwise eligible because they are not an “employee” per se and they do not have an unemployment account at the DUA. An individual eligible for unemployment benefits under the PUA program will be able to receive up to 39 weeks of only the federal unemployment compensation (the $600/week). They will not be eligible for any unemployment benefit payments from the Commonwealth nor will their application for unemployment be processed through the DUA’s current online application portal. Rather, these individuals must apply for the federal unemployment compensation through a portal currently being created by the Commonwealth. The governor’s office has indicated the application portal should be operational and available to begin processing applications by April 30. For more information on when this portal will be able to accept applications of these non-employee workers, check frequently at the following link: www.mass.gov/unemployment/covid-19

There are nuances to the legislation that go beyond the scope of this article. For a more in-depth discussion of these items or any other employment topic related to the coronavirus pandemic, readers are encouraged to contact Attorney Joseph T. Bartulis, Jr.




©2020. This material is intended to offer general information to clients and potential clients of the firm, which information is current to the best of our knowledge on the date indicated below. The information is general and should not be treated as specific legal advice applicable to a particular situation. Fletcher Tilton PC assumes no responsibility for any individual’s reliance on the information disseminated unless, of course, that reliance is as a result of the firm’s specific recommendation made to a client as part of our representation of the client. Please note that changes in the law occur and that information contained herein may need to be reverified from time to time to ensure it is still current. This information was last updated April 2020.