Paid Sick Leave or Extended Paid Family Medical Leave under FFCRA is not available for employees who cannot work or telework. Since the government will ultimately reimburse many employers for costs of FFCRA leave, we previously suggested that employers with fewer than 500 employees should seriously consider retaining employees on their payroll if those employees will be eligible for up to two weeks of paid leave. Employees are eligible if their leave is to comply with a government quarantine or isolation order, self-quarantine on advice of a health care provider, or to obtain a medical diagnosis after experiencing symptoms related to COVID-19. Also employees are eligible for up to 12 weeks of paid leave if they are unable to work because they must care for a child whose school has closed as a result of COVID-19.

Unfortunately, Department of Labor guidance now states that this option will only be available if the employer has work or telework available that the employee cannot do because of one of the reasons enumerated in the FFCRA. Consider the following example of an employee who would be eligible for extended paid family leave. The employee typically works as a customer service agent for a small business and spends his entire day taking orders on the phone. As a result of available technology, this employee can still perform the job at home while the office is closed. Unfortunately, the employee also has four small children who are stuck at home because their schools and day care centers are closed. While he might have been able to do his job with one older child, he is not able to do his regular job while simultaneously taking care of four younger children. Because he falls into one of the FFCRA categories and because his employer has work or telework that he could do but for the fact that he has four young children at home, this employee would be eligible for FFCRA leave. In contrast, the employee who normally works on a machine in a machine shop that had closed down would not be eligible for FFCRA because he could not telework.

In the short term, unemployment benefits may be the best option. As we have stated in another recent post, unemployment benefits in most states tend to be fairly minimal — Texas pays a maximum of $521 per week — which may explain why employers have been reluctant to lay-off valuable workers. The CARES Act, however, temporarily expands unemployment benefits for employees who have lost their job due to the Coronavirus pandemic. The Federal government will provide an additional $600 per week through July to any employee receiving unemployment benefits. This will result in some lower paid workers earning more than 100% of their usual paychecks for a temporary period.

Small employers could be eligible for loans and payroll retention tax credits if they keep employees on their payrolls. Before encouraging employees to apply for the enhanced unemployment benefits provided by the CARES Act, employers may also want to explore whether they are eligible for some the relief provided by that same law. For example, the CARES Act has also created a $349 billion loan program to help small employers — generally employers with no more than 500 employees — pay salaries for several months. These loans would be forgiven if the employees remained on the payroll. Alternatively, under the CARES Act, some employers would be entitled to a temporary employee retention tax credit on employer paid payroll taxes. These programs are discussed in greater detail here. Because the CARES Act is a very complicated piece of new legislation, and these loans may come with regulatory stings, we urge our readers to seek expert advice from labor, tax and government contractor specialists when evaluating their options.

Don’t forget about other legal requirements when making decisions about your workforce. As employers and their lawyers familiarize themselves with the (complicated) requirements of the new CARES Act and the FFCRA, we remind you again not to forget other legal requirements that may be triggered by a decision to layoff or furlough employees, including the issuance of WARN notices, collective bargaining, compliance with severance plan obligations, obligations to keep positions open for employees on FMLA, and the duty to accommodate employees who may have a disability.