As businesses suffer, including self-storage operations, there are some inevitable questions that apply to managing staff, especially those that have tested positive for the virus or are caring for family members that are sick. Further, as revenue declines, decisions relating to furloughs, lay-offs or reduced hours all weigh on the minds of employers. These are not easy times, nor are the answers easy, especially as new laws and regulations seem to appear daily from the federal government, state government and even some local municipalities.
Families First Coronavirus Response Act
This federal law was signed into law March 18, 2020 and takes effect April 2, 2020. The law applies to employers with less than 500 employees but also has an exemption for employers with less than 50 employees (whose required compliance would jeopardize the viability of the business). The law also applies only to employees who have already been employed with the company for at least 30 days.
Emergency FMLA Expansion Act: The law essentially expands the currently existing Family Medical Leave Act (FMLA) under which employers must provide up to 12 weeks of job protected leave when an employee is unable to work (OR TELEWORK) due to health conditions of the employee’s children (or other qualified family members).
There are two parts to the concept of “protected leave”. The first part is that employees who take the leave must be restored to the position they held when they left (or an equivalent position) if the job is still in place at all. If not, the employer must make “reasonable efforts” for up to a year to return the employee to an equivalent job position. Meaning that, if the job is discontinued during the 12 weeks of leave and then reopened six months later, the employee should be given the opportunity to return to that position if possible.
The second part is pay. All PTO can be applied to the first 10 days of the leave. After that the employer must pay the employee “no less than two-thirds of the employee’s regular rate of pay” (based on normal hours of their individual work, including part time employees). However, the pay for this family leave is limited to $200 per day and $10,000 in the aggregate per employee.
Emergency Paid Sick Leave Act: This portion of the law applies to the employees themselves. This includes employees who are sick, advised to self quarantine or are subject to a federal, state or local shelter in place order. Full-time employees are entitled to 80 hours of paid sick leave (assumed to be equivalent to 2 weeks). Part-time employees would be entitled to the hours worked on average over a similar two week period. The employee is entitled to be paid their regular rate of pay for that two week period but overall, there is a cap of $511.00 per employee per day or $5,110.00 in the aggregate per employee. Rates of pay are reduced to two-thirds if the sick leave is taken to care for others, not the employee itself. Under this law the employer may not require the employee to use other sick leave time before utilizing the 80 hours provided under this law.
IMPORTANT: For those operators who are in shelter in place locations and who told their employees not to report and otherwise intend not to pay them for their hourly work (unless they seek unemployment), those employees may be entitled to compensation under the Paid Sick Leave Act. However, the law includes tax credits to employers who pay their employees under these laws (credit against the employer’s portion of Social Security Taxes).
Decisions relating to furloughs, reduction in employee hours and lay offs, where employees can seek unemployment compensation, inevitably will cross some of these Leave and Sick Leave laws to address gaps in compensation that the employee may otherwise be entitled to receive. These issues (and related calculations) would need to be addressed on a case by case basis. Employees should also be aware of specific state declarations that are being entered that will require employers to file any unemployment claims (relating to partial or total company shutdowns) for their employees rather than to put that burden on the employee. For example, the Georgia Department of Labor issued an emergency rule that, if the employer fails to file the claim, the employer will be required to reimburse the Department of Labor the full amount of the unemployment benefit paid to the employee. So please, check with your own state Department of Labor before taking any actions triggering unemployment filings by your employees.
Should you have any questions on interpreting your state or local laws or operating your business during this unprecedented time, please do not hesitate to contact us.