A. Governor Cuomo of NY Institutes Mandate: 100% of New York Workforce Must Stay Home
However, there are multiple exceptions to this rule including Any essential business or entity providing essential services or functions shall not be subject to the in-person restrictions. This includes essential health care operations including research and laboratory services; essential infrastructure including utilities, telecommunication, airports and transportation infrastructure; essential manufacturing, including food processing and pharmaceuticals; essential retail including grocery stores and pharmacies; essential services including trash collection, mail, and shipping services; news media; banks and related financial institutions; providers of basic necessities to economically disadvantaged populations; construction; vendors of essential services necessary to maintain the safety, sanitation and essential operations of residences or other essential businesses; vendors that provide essential services or products, including logistics and technology support, child care and services needed to ensure the continuing operation of government agencies and provide for the health, safety and welfare of the public;
Any other business may be deemed essential after requesting an opinion from the Empire State Development Corporation, which shall review and grant such request, should it determine that it is in the best interest of the state to have the workforce continue at full capacity in order to properly respond to this disaster. No later than 5 p.m. on March 19, 2020, Empire State Development Corporation shall issue guidance as to which businesses are determined to be essential.
A list of what New York State/Empire State Development Corp. currently deems essential is can be found here and includes:
1. Essential health care operations including:
- research and laboratory services
- walk-in-care health facilities
- veterinary and animal health services
- elder care
- medical wholesale and distribution
- home health care workers or aides
- doctor and dentist offices
- nursing homes, or residential health care facilities or congregate care facilities
- medical supplies and equipment providers
2. Essential infrastructure including:
- utilities including power generation, fuel supply and transmission
- public water and wastewater
- telecommunications and data centers
- transportation infrastructure such as bus, rail, or for-hire vehicles, garages
3. Essential manufacturing including:
- food processing, including all foods and beverages
- medical equipment/instruments
- safety and sanitary products
- paper products
4. Essential retail including:
- grocery stores including all food and beverage stores
- convenience stores
- farmer’s markets
- gas stations
- restaurants/bars (but only for take-out/delivery)
- hardware and building material stores
5. Essential services including:
- trash and recycling collection, processing and disposal
- mail and shipping services
- laundromats/dry cleaning
- building cleaning and maintenance
- child care services
- auto repair
- warehouse/distribution and fulfillment
- funeral homes, crematoriums and cemeteries
- storage for essential businesses
- animal shelters or animal care or management
6. News media
7. Financial Institutions including:
8. Providers of basic necessities to economically disadvantaged populations including:
- homeless shelters and congregate care facilities
- food banks
- human services providers whose function includes the direct care of patients in state-licensed or funded voluntary programs; the care,
- protection, custody and oversight of individuals both in the community and in state-licensed residential facilities; those operating community shelters and other critical human services agencies providing direct care or support
9. Construction including:
- skilled trades such as electricians, plumbers
- other related construction firms and professionals for essential infrastructure or for emergency repair and safety purposes
10. Defense and national security-related operations supporting the U.S. Government or a contractor to the US government
11. Essential services necessary to maintain the safety, sanitation and essential operations of residences or other essential businesses including:
- law enforcement
- fire prevention and response
- building code enforcement
- emergency management and response
- building cleaners or janitors
- general maintenance whether employed by the entity directly or a vendor
- automotive repair
12. Vendors that provide essential services or products, including logistics and technology support, child care and services needed to ensure the continuing operation of government agencies and provide for the health, safety and welfare of the public including:
- technology support
- child care programs and services
- government owned or leased buildings
- essential government services
If the function of your business is not listed above, but you believe that it is essential or it is an entity providing essential services or functions, you may request designation as an essential business.
B. Notice Requirements
Employers should be aware that they have obligations to notify their employees of the new leave that is available to them under both New York’s Emergency Sick Leave Law and the federal Families First Coronavirus Response Act.
Guidance from New York State provides that employers should advise their employees both before and after any potential quarantine that:
1. They are entitled to paid/unpaid days off; and
2. Promptly help your employees as needed apply for Paid Family Leave or Disability benefits
The federal Families First Coronavirus Response Act also provides that for the Emergency Paid Leave provided under the Act, Employers “shall post and keep posted, in conspicuous places on the premises of the employer where notices to employees are customarily posted, a notice, to be prepared or approved by the Secretary of Labor, of the requirements described in this Act.” The Department of Labor is expected to provide copies of this notice within the next seven days.
C. Emergency Family and Medical Leave Expansion Act
This provision of the FFCRA expands the Family Medical Leave Act (“FMLA”), and permits any employee who has worked for a least 30 calendar days with up to 12 weeks of leave if the employee is unable to work (or telework) due to a need for leave to care for the employees or daughter under 18 years of age if the school or place of care has been closed or the childcare provider of such son or daughter because of the corona virus. The expanded provision of the FMLA applies to all employers with less than 500 employees, and includes employers that have less than 50 employees, which are otherwise exempt from the FMLA.
The first 10 days of leave are to be unpaid, although the employee may elect to use any accrued leave benefit during the first 10 days. Thereafter, the employer must provide paid leave for the remaining duration of the extended FMLA leave. The amount of this paid leave is equal to two-thirds of an employee’s regular rate of pay, as defined by section 7(e) of the Fair Labor Standards Act (“FLSA”), and the number of hours that the employee would have been scheduled to work. For employees that are subject to a variable schedule, then employers should use the average number of hours that the employee has worked over the past 6 months. The amount of pay is capped at $200 per day and cannot exceed $10,000 in aggregate for the duration of the leave. For employers with less than 50 employees, they may be exempt from providing pay if providing such pay would jeopardize the viability of the business as a going concern.
Upon return from this emergency leave, employees must be restored to their position, or a similar position with the same terms and conditions of employment. However, for employers with 25 or less employees, they are not required to restore the employee if: (a) the position held by the employee when the leave commenced does not exist due to economic conditions or other changes in operating conditions of the employer that affect employment and are caused by the public health emergency during the leave period; (b) the employer makes reasonable efforts to restore the employee to a position equivalent to the position the employee held when leave commences; or (c) employer makes reasonable efforts in the year following the need for this leave to restore the employee to the same or similar position.
Employers that are subject to a collective bargaining agreement and contribute to a fund, plan or program that provide paid leave equivalent to this expanded FMLA benefit will satisfy their requirements under the statute.
This statute exempts employers who are health care providers or an emergency responder.
While earlier drafts of this legislation extended this emergency FMLA to leave needed when the employee was sick with the novel corona virus, or caring for a family member who was ill with the corona virus, the final law only extended to the benefit to employees who could not telework and had to stay home to care for a child that was unable to attend school or childcare due to a closure of the school or childcare facility because of the coronavirus. Of course, for employers with 50 or more employees, the FMLA may provide up to 12 weeks of unpaid job protected leave for employees who are undergoing a serious health condition, which may encompass complications from the coronavirus, which prevents the employee from performing his/her job, or to care for a spouse, son, daughter, or parent who has a serious health condition, which may be caused by the coronavirus.
D. Emergency Paid Leave
The FFCRA also provides for employees with 2 weeks (80 hours for fulltime employees) with paid emergency sick leave to allow employees to: (a) self-isolate because they have been diagnosed with coronavirus; (b) obtain a medical diagnosis for coronavirus; (c) comply with a recommendation or order by a public health office to self-isolate; (d) the employee is experiencing symptoms of COVID-19 and seeking a medical diagnosis; (d) care or assist a family member of an employee who: (i) is self-isolating due to a diagnosis of coronavirus; or (ii) is experiencing symptoms of coronavirus; or (e) care for a child is the school or place of care has been closed or the caregiver is unavailable due to coronavirus. This benefit is only available to people working at companies with fewer than 500 employees. Small businesses (defined as having 50 employees or less) would be reimbursed for providing the 14 days of additional paid sick leave. This paid sick time does not carryover from one year to the next.
For employers that already offer sick leave, this emergency paid sick leave must be provided in addition to existing sick leave policies and employers may not make changes to their existing policies to avoid offering additional paid leave. Also, an employee using this paid sick leave is not required to find coverage for their time they must be out of work. The employee also is not required to use existing sick leave before using this additional sick leave benefit.
The amount of this paid leave benefit is calculated by taking the employee’s regular rate of pay, as defined by the FLSA, by the number of hours that the employee would regularly be permitted to work. However, the amount of pay is capped at $511 per day for a total of $5,110 for leave related to an employee who is sick and recovering from coronavirus. This leave is also capped at $200 per day for a total of $2,000 if the employee is using leave to care for a family member who has coronavirus or caring for their son or daughter whose school has been closed.
In the next 7 days the Secretary of Labor will provide written notice outlining the benefits under this act, and the notice must be posted in a conspicuous place on the employer’s premises.
Employees may not discriminate or retaliate against employees who use this benefit. Further, violations of this provision are violations of the minimum wage provision of the Fair Labor Standards Act. Accordingly, employers who do not provide this leave, would be subject to the same liquidated damages and other statutory penalties provided in 29 U.S.C. 216 and 217.
Employers who are subject to a collective bargaining agreement may fulfill their obligations under this statute by making contributions to a fund, plan or program that enables employees to obtain leave for the same reasons provided for by this statute.
E. Tax Credits Under the FFCRA
The FFCRA provides that employers who are required to provide paid leave under either the expanded FMLA or under the Emergency Paid Leave Act may apply for a tax credit equal to the amount of the leave paid. The paid sick time payroll tax credit can be claimed on a quarterly basis, equal to 100 percent of the amount of sick leave wages paid. The credit is limited to $511 per day ($5,110 total) if an employee is taking time off to care for themselves or $200 per day ($2,000 total) if the sick leave is to care for an individual who’s quarantined or showing symptoms of COVID-19 or a minor child whose school is closed. The credit is refundable if it exceeds the amount the employer owes in payroll tax.
F. New York State Paid Leave Law
On March 18, 2020, Governor Cuomo signed a bill providing paid leave to employees who are unable to work remotely and who cannot go to work because they are subject to a mandatory or precautionary order of quarantine or isolation for COVD-19, or whose child is subject to such an order. The exact amount of the leave, and whether the leave is paid or unpaid depends on the number of employees and net income of the business. To assist employer with navigating this new regulation, we have prepared the following chart:
Number of Employees
|COVID-19 Quarantine Benefit|
|10 or less||Unpaid leave provided for the duration of the mandatory or precautionary period of isolation or quarantine.|
|10 or less, with annual net income in excess of $1 million||5 days of paid leave, and unpaid leave for the remaining period of the mandatory or precautionary period of isolation or quarantine.|
|11 to 99||5 days of paid leave, and unpaid leave for the remaining period of the mandatory or precautionary period of isolation or quarantine.|
|100 or more||14 days of paid leave|
14 days of paid leave
Any employees who work for an employer with 100 or fewer employees, earning up to $150,000 may apply for wage replacement benefits under the New York Paid Family Leave and New York State Disability Law.
This leave will be provided in addition to any existing paid leave an employer may provide, and the employee may not lose their accrued sick leave while on COVID-19 quarantine.
Employees eligible to use this leave is limited. Notably, any employee who knowingly and voluntarily, not at the direction of the employer, traveled to a country with a level two or level three health threat issued by the Centers for Disease Control may not use this leave benefit. However, these employees may use their accrued leave time while subject to a mandatory or precautionary period of quarantine or isolation. Additionally, any employee who is asymptomatic and who has not yet been diagnosed with any medical condition and who is able to work while under the mandatory or precautionary order of quarantine or isolation, whether through remote access or other similar means, may not use this benefit.
Employees using this leave are guaranteed job protection, and must be restored to their position, or a similar position with the same pay and benefits once the leave ends. Employers may not discriminate or retaliate against any employee who uses this benefit.
G. Interplay Between the Federal and State Law
The state law provides that it is pre-empted by any federal law that is passed relating to leave. However, to the extent the state law is more generous, the employees are entitled to receive the difference. The biggest difference is that the federal law does place a cap on the amount of leave benefits in the first two weeks to $511 per day ($2,755/week or $132,860/year) for employees who are sick with corona virus, whereas the state law has no wage cap if the employee works for an employer with over 100 employees, and has wage replacement through the disability and paid family leave benefits for wages up to $150,000.
The state law also exempts employees who can work remotely, or who voluntarily traveled to an affected region. Also, the state law does not provide leave for employees who must stay home to care for a family member who is recovering from coronavirus or children who are unable to go to school or daycare.
H. Mandatory Business Closures
Several “nonessential businesses” have been mandated closed including: retail shopping malls with an excess of 100,000 square feet of retail space, places of public amusement, whether indoors or outdoors, including but not limited to, locations with amusement rides, carnivals, amusement parks, water parks, aquariums, zoos, arcades, fairs, children’s play centers, funplexes, theme parks, bowling alleys, family and children’s attractions shall likewise be closed to the public. Further, restaurant, bars, gyms, and fitness studios were mandated closed as of March 16, 2020.
Guidance on New York State’s regulations and resources for businesses can be found at: https://esd.ny.gov/novel-coronavirus-faq-businesses.
I. Application of the WARN Act to Governor Cuomo’s Executive Order 202.6
Governor Cuomo’s Executive Order now mandates that businesses decrease their in-office personnel by 100%, effective March 22th at 8:00 pm. In the event you will be reducing your employees’ hours or contemplating a mass layoff, you may have obligations under the WARN Act.
Under the NY WARN Act, private businesses with 50 or more full time workers are required to provide 90-days’ notice prior to a mass layoff or a qualifying reduction in work hours. An employer’s failure to provide the proper notice can result in back wages and a civil penalty. Under the regulations, an employer must send notice when either: (a) at least twenty-five (25) employees (excluding part-time employees), constituting at least one-third of the workforce at the site; or (b) at least two hundred fifty (250) employees (excluding part time employees) suffer a reduction in the hours of work of more than fifty (50) percent during each month for any consecutive six-month period. For businesses whose employees are unable to work remotely, and whose employee’s hours would be cut by more than fifty percent in order to enforce the Executive Order, the requirements of the NY WARN Act would apply.
Because it is not possible to provide employees with the statutorily required 90-days’ notice, Governor Cuomo’s Executive Order would place businesses within the unforeseeable business circumstances exception to the NY WARN Act 90-day notice requirements. When a business is subject to an unanticipated government-ordered closing of an employment site without prior notice, as exists here, the employer is only required to provide as much notice as possible in advance of the mass layoff or covered reduction in work hours. This should be done in writing.
It should be noted that the New York State Department of Labor has acknowledged that many businesses are facing rapid and unexpected closures due to the coronavirus (COVID-19), but affirmatively stated that the WARN Act notice requirements are not being suspended and employers are still required to provide notice as soon as possible.
J. A Possible Alternative to Layoffs
With so much unknown about COVID-19 and its rapid spread, businesses face the possibility of prolonged closures and financial strain. While laying off employees may seem inevitable, New York, New Jersey, and Connecticut all maintain a Shared Work Program that provides a possible alternative. Generally speaking, the Shared Work Program permits qualifying employers to keep trained staff and avoid layoffs. Under the Shared Work Program, employees will work reduced hours and supplement their income with partial unemployment insurance benefits. While the requirements for each state vary, the concept is the same. The following links provide guidance.
The New York Department of Labor has produced a Fact sheet to help employers navigate the program, available here: https://labor.ny.gov/formsdocs/ui/SW1.pdf.
Connecticut’s Department of Labor Fact Sheet is available here: https://www.ctdol.state.ct.us/progsupt/bussrvce/shared_work/DOL%20SW%20Employer%20fact%20sheet%20-%20update.pdf.
Information on New Jersey’s Shared Work Program is available here: https://careerconnections.nj.gov/careerconnections/resources/sharedwork/shared_work_program.shtml#.
The attorneys in Forchelli Deegan Terrana LLP’s Employment & Labor practice group will continue to keep you updated on any changes to your requirements as an employer as updates become available. Should you have any questions, do not hesitate to contact us. Battling the novel coronavirus is difficult for everyone. We are here if you need us even if we are working remotely.