Given the daily changing legal landscape, we strongly encourage employers to reach out to Raimondo & Associates with questions regarding specific situations. We are closely monitoring these developments. Because of these frequent developments, and the need to adapt the general guidance below to specific circumstances, employers should consult counsel regarding specific circumstances.

At a general level, the legal rules and guidance we summarize below should not be applied in a manner that would prevent employers from taking reasonable, common-sense steps to protect the health and safety of employees, customers, vendors and their communities. There are many nuances and fact-specific elements that make individualized legal counsel on these questions of critical importance.

Q: What is COVID-19 Supplemental Paid Sick Leave and who does it apply to?

Governor Newsome signed Executive Order N-51-20 on Thursday, April 16, 2020, in which he granted additional paid sick leave to food sector workers. Employers with 500 or more employees in the United States (as determined in accordance with 29 CFR 826.40(a)(1)-(2)) must now provide food sector workers with 80 hours of paid sick leave in addition to all other leave requirements, if the employee is unable to work because (1) Federal, State, or local quarantine or isolation orders related to COVID-19; (2) the worker is advised by health care provider to self-quarantine or self-isolate due to concerns related to COVID-19; or (3) the worker is prohibited by the employer from working due to health concerns related to the potential transmission of COVID-19.

Like the FFCRA’s Emergency PSL, employees using the COVID-19 Supplemental PSL must be compensated for the average hours the employee would have been scheduled to work, paid at the higher of (1) the employees regular rate of pay during the last pay period; (2) the state minimum wage; or (3) the local minimum wage to which the employee is entitled. 

This order defines Food Sector Workers as anyone who is subject to Industrial Wage Commission (IWC) Wage Order 3-2001 § 2(B); IWC Wage Order 8-2001 § 2(H); IWC Wage Order 13-2001 § 2(H); or IWC Wage Order 14-2001 § 2(D); the employee works for an employer that operates a food facility; or the employee delivers food from a food facility for or through an eligible employer. The employee must be an Essential Critical Infrastructure Worker and the employee must leave their residence in order to perform work for or through the eligible employer. 

Eligible employers are exempt from the Executive Order if, as of April 16, 2020, the employer provides leave payable for the reasons listed above, and that would compensate the employee in an amount equal to or greater than required by the Order. 

The Labor Commissioner will provide a model notice for employees by April 23, 2020.

Q: Is the SBA still accepting applicants for the Paycheck Protection Plan?

The Small Business Administration (SBA) released a statement this morning that it is no longer able to accept applications for the Paycheck Protection Plan (PPP), as the program has run out of the allocated budget of $349 billion. Congress and the Secretary of the Treasury are attempting to reach a decision on how to further fund the program, though neither have released details of any proposed options. We will provide an update when additional information is available.

Q: I have an employee who has reported that they have some COVID-19 symptoms. Do I have to provide Emergency Paid Sick Leave? 

It depends. In order to qualify for EPSL because the employee is experiencing symptoms of COVID-19, the employee must also actively seek diagnosis. The bar is likely rather low for what counts as “seeking diagnosis” but it is still an important step the employee must take. The employee does not need to actually take a test to confirm COVID-19, they simply must seek a diagnosis from a health care provider. 

Q: I have fewer than 50 employees and cannot afford to provide Expanded FMLA and EPSL for my employees. How can I get the exemption? 

Employers with fewer than 50 employees seeking potential relief from Expanded FMLA and EPSL payments must show that they cannot afford to pay the employees while operating at minimal capacity. This is important because it will make successfully claiming this provision exceedingly difficult. If an employer is able to take provisions to reduce its costs while still providing the required benefits, the employer will not likely qualify for an exemption. Employers must therefore keep very good records to show that they qualify for the exemption. 

Q: Has the IRS provided any further guidance on the FFCRA Tax Credits?

The IRS has amended its previous guidance and has stated that the FFCRA tax credits will be set against only the quarterly federal income tax and Medicare taxes to defray cost of leave. It has clarified that the payroll taxes available for retention no longer include the employee’s share of Social Security and Medicare taxes nor the employer’s share of Social Security taxes.