Welcome to the holiday season! Usually, this is the time we advise employers about holiday celebrations, provide warnings about serving alcohol during company parties, and field questions regarding employee time off requests. This year, the virus not only requires us to find alternative ways to celebrate, but it presents different legal challenges, especially in light of the new Regional Stay Home Order issued by California’s Governor Gavin Newsom.
So in lieu of discussing holiday concerns, we’ll answer the top five employer questions we’ve encountered recently.
1. The recent California Regional Stay Home Order requires me to shut down my business. Do I have any pay obligations if my employees are unable to work?
- FFCRA Sick Leave: Per the United States Department of Labor (DOL) and the Families First Coronavirus Response Act (FFCRA) regulations, if an employer closes the worksite due to a federal, state, or a local directive, the employee is not generally entitled to take paid leave under the FFCRA. The DOL states:
“If your employer closes your worksite, even for a short period of time, you are not entitled to take paid sick leave or expanded family and medical leave. However, you may be eligible for unemployment insurance benefits. This is true whether your employer closes your worksite for lack of business or because it was required to close pursuant to a Federal, State, or local directive. You should contact your State workforce agency or State unemployment insurance office for specific questions about your eligibility.”
- Local/Policy Paid Leave: Employees may use their available vacation days, paid sick leave (if applicable), or other paid time off under company policy. In June, 2020, the City of Los Angeles published guidance regarding COVID-19 and use of paid sick leave under the City ordinance, that states employees may use paid sick leave if they lose work “because the employee’s business or a work location temporarily ceases operations in response to a public health or other public official’s recommendation or mandate.”
- Payout of Vacation: Note that even if employees do not ask to use their vacation balance, you may be required to pay it out anyway. Generally, when an employee is laid off, any accrued and unused vacation must be paid on separation.
Per a California Division of Labor Standards Enforcement (DLSE) 1993 Opinion Letter, if a “shutdown” is longer than ten days and there is no definitive return to work date, the employee may be considered “terminated” which would trigger the payout obligation. Another Opinion Letter states that if an employee is laid off without a specific return date within the normal pay period, all wages (including vacation/Paid Time Off) are due and payable on the employee’s last day of work, per California Labor Code Section 201.
California stated the “orders will remain in effect for at least three weeks” and will be lifted “when a region’s projected ICU capacity meets or exceeds 15 percent.” Given the lack of clarity in this order and the return to work date, it is recommended that employers timely pay out accrued vacation for employees who are unable to work.
2. Do I have any notice requirements based on the new State Regional Stay Home Order?
WARN Act Notice: Employers must take into account whether they are obligated to give notice under the federal and state Worker Adjustment and Retraining Notification (WARN) Acts.
Generally, large employers who are covered under WARN are required to provide advance notice to all affected employees and to others prior to plant closings or mass layoffs.
On March 18, 2020, Governor Newsom signed Executive Order N-31-20, temporarily suspending the Cal-WARN’s 60-day advance notice requirement, where a mass layoff, relocation or termination is caused by COVID-19-related “business circumstances that were not reasonably foreseeable as of the time that notice would have been required.” The federal DOL interpreted “business circumstances” to include “[a] government ordered closing of an employment site that occurs without prior notice.” 20 C.F.R. § 639.9(b).
Notably, written notice is still required, and should be given as soon as possible when the need to conduct a mass layoff or plant closure arises.
Cal-WARN requirements may be triggered when there is a mass layoff (a layoff during any 30-day period of 50 or more employees at a covered establishment), or termination (the cessation or substantial cessation of industrial or commercial operations in a covered establishment.) In these circumstances, a covered employer must provide as much notice as is practicable which includes, among other requirements, a brief statement as to why the 60-day notice period could not be met.
3. I am required to temporarily close due to the Regional Stay Home Order, but my employees don’t have any other paid leave entitlement under local or state law or company policy. Can I still permit them to use their FFCRA balance, even if they are not eligible?
Yes. The FFCRA does not prevent an employer from granting FFCRA leave, even if there is no qualifying reason. However, you may not be eligible to claim the tax credit.
The new administration may change this rule and permit employers to claim a tax credit in these circumstances. We intend to provide further updates if that changes.
4. My business is open, but my employees want to travel for the holidays. Can I require them to self-quarantine when they return and not report to work?
The state, Los Angeles County, and the City of Los Angeles recently issued travel advisories, asking individuals to self-quarantine for 14 days after arrival. It would seem employers may similarly require employees to stay out of the workplace for 14 days.
Under these circumstances, employers should permit employees to telework, to the extent possible.
If teleworking is not an option, then employers should consider providing paid sick leave under the FFCRA. See the DOL’s FAQ #60:
“For purposes of the FFCRA, a Federal, State, or local quarantine or isolation order includes quarantine or isolation orders, as well as shelter-in-place or stay-at-home orders, issued by any Federal, State, or local government authority that cause you to be unable to work (or to telework) even though your employer has work that you could perform but for the order.”
5. My business is open during the holidays, but my employee is asking for time off due to their child care provider’s winter break closure. Can I require my employee to use paid vacation for that time off?
If an employee’s child care provider is closed or unavailable for a COVID-19 related reason, your employee may take paid sick leave and family care leave under the FFCRA (for a total of 12 weeks of paid leave). The FFCRA sick leave provides for an initial two weeks (ten workdays) of paid leave. After sick leave is exhausted, employees may use paid vacation concurrently with partially paid family care leave. See the DOL’s FAQ #86 here.