Labor & Employment Insights

Since the onslaught of layoffs and furloughs caused by the COVID-19 crisis, many employers found themselves caught in the crosshairs of the onerous severance and notice obligations imposed by the January 2020 Amendments to New Jersey’s Millville Dallas Airmotive Plant Job Loss Notification Act (“NJ WARN Act”), slated to go into effect on July 19, 2020.

To alleviate the consequences for businesses already struggling with the effects of the pandemic, on April 14, 2020 Governor Murphy signed into law a bill that delays the effective date of the NJ WARN Act amendments until 90 days after the lifting of the COVID-19 state of emergency, currently expected to expire on July 7, 2020.   Unless the Governor extends the state of emergency to a later date, the NJ WARN Act amendments will not go into effect until October 5, 2020.  The new law is effective immediately and is retroactive to March 9, 2020.

As we discussed in a prior publication, the NJ WARN Act was amended to significantly expand employee rights in the event of a plant closure or mass layoff.  Among other things, the amendments

Our employee says they need Paid Leave under the FFCRA. What documentation can the company require from the employee to ensure these payments qualify for employer tax credits?

Under the Families First Coronavirus Protection Act (FFRCA), employers are eligible for tax credits for any payment of qualified Emergency Sick Leave or Emergency Family and Medical Leave benefits mandated by the new law.  Going forward, employers must be sure to require and maintain appropriate documentation from employees requesting leave to substantiate to the IRS that the employer credit is warranted. Additional information about what constitutes a “qualified” use of Emergency Sick Leave or Emergency Family and Medical Leave can be found here.

Eligible employers are entitled to retain a 100% credit for the payment of all qualified sick leave and family leave wages, plus allocable qualified health plan expenses and the employer’s share of Medicare taxes, rather than depositing them with the IRS.  Employers must retain records and documentation related to and supporting each employee’s leave to substantiate the claim for the credits, and retain the Forms 941, Employer’s Quarterly Federal Tax Return, and 7200, Advance of Employer Credits Due To COVID-19, and any other applicable filings made to the IRS requesting the credit.

Last week in our publication entitled Employer’s Guide to Federal and State Employee Leave Rights and Income Protection for Coronavirus Related Absences, we addressed the new Emergency Paid Sick Leave Act and the Emergency Family and Medical Leave Expansion Act (“Emergency FMLA Leave”) that employers must provide to employees as of April 1, 2020 under the new Families First Coronavirus Response Act (FFCRA).  As indicated in that publication, the US Department of Labor was expected to issue additional guidance of compliance with these new paid leave obligations.

Since the passage of the FFCRA, the U.S. Department of Labor has issued several versions of a Questions and Answers publication that clarifies some of the issues that were not directly addressed in the FFCRA.  Below is a summary of some of those clarifications.

Documentation Employees Must Submit to Support a Paid FFCRA Leave Request.  The FFCRA mandates Emergency Paid Sick Leave if the employee is able to work/telework for one of 6 Covid-19 related absences (refer to the Guidance link above for the list of 6 qualifying reasons) and paid Emergency FMLA Leave if the employee is unable to work due to a child’s school or daycare closure (or unavailability of daycare provide).  The DOL makes it clear that employers must require employees to provide documentation to support an Emergency Paid Sick Leave or Emergency FMLA Leave, including:

Updated as of April 1, 2020

In recent days employers have been faced with very difficult and unanticipated situations in the workplace.  Employee absences from the workplace, whether related to personal or family illness due to the virus, voluntary or involuntary quarantines, fear of contracting the virus, reductions in hours, workplace furloughs or closures, may implicate leave rights under the federal Family and Medical Leave Act (FMLA) and the New Jersey Family Leave Act (NJFLA), as well as paid sick leave rights under the New Jersey Paid Sick Leave law.   In addition, employees may be eligible for additional income protection from state unemployment, temporary disability and workers compensation funds.

Signed into law on March 18, 2019 the Families First Coronavirus Response Act has several components, including paid sick leave and paid FMLA leave obligations aimed at easing the financial  impact of the virus upon employees. This guide synthesizes the various federal and state programs and answers questions about the leave and income protections are available to employees who find themselves unable to work due to the coronavirus epidemic.

As the country reels from the coronavirus pandemic, the economic impact on businesses and employees has become painfully evident.   Whether due to personal or family illness with the virus, self-isolation, school or business closures, or a downturn in business, employees are expected to be facing extended absences from the workplace.   Many employees, especially hourly workers, may not have available paid time off or the economic cushion to weather the loss of income during the absence. Employers may not have the financial wherewithal to pay employees during these absences. In anticipation of these and other  dire economic consequences brought on by the virus, the U.S. House of Representatives passed the Emergency Paid Leave Act with the support of the President. On March 16, 2020 the House substantially revised the bill to significantly narrow the relief available to employees under the original version.  The Senate passed the bill two days later and it is now headed to the President for his signature.  The Families First Coronavirus Response Act will provide economic relief to employees affected by coronavirus-related absences.

The Act will apply to employers with 500 or less employees.   Larger employers are not covered. Administration and Senate leaders have commented that these larger employers typically provide sick leave benefits to their employees,  but many may not provide for two weeks of leave. If not, these employees may be unprotected. Employers with less than 50 employees can apply for an exemption through the Department of Labor if it would “jeopardize the viability of the business”, a vague standard that has yet to be defined.

We have outlined below key provisions of the Act that we hope will assist employers in making difficult staffing decisions going forward.