Exposed

“An employee called me to say he might have been exposed to COVID-19 over the weekend. What should I do?”

Your HR Survival Tip

Many people are confused about time off related to COVID-19. As calls from employees reporting possible exposure are increasing, companies are realizing they aren’t quite sure what they can or should do. The Families First Coronavirus Response Act (FFCRA) provides emergency paid sick leave but only if the employee qualifies.

Typically, to qualify for FFCRA paid sick leave, the employee must have symptoms and is seeking a diagnosis. Here are a few scenarios:

  • Bob has symptoms and decides to quarantine himself for 2 weeks but does NOT seek a medical diagnosis or advice from a doctor.
    • Generally, this will be unpaid time off but Bob could use any accrued sick leave.
  • Bob has symptoms and seeks a medical diagnosis or advice from a doctor.
    • Bob will be eligible for FFCRA emergency paid sick leave for up to 2 weeks.
  • Bob has no symptoms but believes he has been exposed recently and plans to self-quarantine.
    • Until Bob is showing symptoms, this will be unpaid or accrued sick time off.
  • Bob has no symptoms but has a doctor’s note stating he should quarantine himself because he lives with an at-risk family member.
    • Bob will be eligible for FFCRA emergency paid sick leave for up to 2 weeks but, after that, he’ll be on unpaid time off.

You are not allowed, due to privacy laws, to let other employees know Bob has symptoms or believes he may have been exposed. Instead, you inform Bob’s close coworkers that “an employee” has symptoms of COVID-19 and is on leave. Yes, they will likely figure out it was Bob but it shouldn’t come from you. Remind the coworkers they should inform you and not come in to work if they develop symptoms.

It’s important to obtain the proper information from employees when paying the emergency paid sick leave. The reimbursements are a tax credit and you need the right backup for the IRS. Ask us for the certification you’ll need from each eligible employee.

Job Killers

As if you aren’t dealing with enough while trying to get your business back to some version of normal, it feels like the California legislature has been working against us lately. The CA Chamber of Commerce has provided its annual list of “job killer” bills. A bill gets this designation when the Chamber feels it threatens the state’s economic recovery and may hurt your ability to rehire or maintain employment of workers. The bills below have not yet been passed so there’s still hope.

Please make use of your personal protective equipment (i.e., your chair) before reading:

AB196, AB664, and SB893 Presumption of injury — AB196 will increase workers’ compensation costs by presuming it’s a workplace injury if your “essential worker” contracts COVID-19. AB663 adds to that by requiring public employers and public/private hospitals to provide additional compensation for things like temporary housing costs based on the employee being exposed or contracting a communicable disease, including COVID-19. SB893 focuses on public and private hospitals by presuming certain diseases are caused by the workplace. This will also establish a precedent for expanding this presumption into the private sector.

AB1107 Massive unemployment and tax increases — This will raise employers’ payroll taxes to fund a 130% increase in unemployment payments.

AB2999 New protected leave — This will require all employers of any size to provide up to 10 days of unpaid bereavement leave, regardless of how long the employee has worked for you. The bill also includes additional litigation possibilities.

AB3075 Public shaming — Corporations can be publicly shamed by local jurisdictions based on arbitrary, unclear, and unfair standards. This means your city or county can impose their own wage payment requirements that are more stringent than state requirements… and let it be known publicly if you aren’t following them.

AB3216 COVID-19 leave mandate — In addition to current federal, state, and local laws, this bill provides unlimited job-protected family and medical leave for all employees in any size company for anything related to COVID-19.

SB1399 Increases costs and liabilities on the apparel industry — This bill requires the industry to have a $600,000 bond to operate and the Chamber believes this financial burden will force the closure of many of the shops.

As you can see, COVID-19 continues to be the impetus for changes that may cost us more. The only good news is that last year there were 31 job killer bills and only two made it to the Governor and only one was signed into law. However, a year ago we didn’t have COVID-19 playing havoc with our businesses so even one of these bills getting passed will be bad news.

Reluctant Returns

“I finally received my PPP (Payroll Protection Program) funds but I am finding it hard to get employees to return to work. Unemployment is either paying them more than they earned each week with me or at least enough so they’d rather not work for nearly the same money. What can I do?”

Your HR Survival Tip

You’re not alone with this particular dilemma! We have heard the same thing from several clients. Even those companies that don’t have PPP money but are ready to slowly start back up are having similar problems. However, the PPP money requires you to maintain a certain headcount for the funds to be forgiven so you may have to make a hard decision about those employees.

Employees First

Employees are often making more on unemployment right now due to the extra $600 they are getting each week. You could sympathize with their desire to receive more money right now and allow them to stay on unemployment. However, please keep in mind they are turning down work and therefore, legally, are committing fraud by continuing on unemployment… where they are attesting they are “willing and able to work” each week. You might also be adding to the fraud by not reporting they turned down work. One solution is to have enough employees come back at least part-time so they might still be eligible for some unemployment (and that $600). However, you may also need to start hiring more people immediately to meet the requirements for the forgiveness of your PPP money.

Business First

You’ve worked hard to make it possible to once again offer employees work and there’s a certain irony that the extra unemployment money is working against the requirements of the PPP money and your ability to reopen. If you inform employees of your reopen date, you will likely get some employees returning to work… reluctantly. If they turn you down or don’t show up, be prepared to accept that as a resignation and report it as such. If you can get by with offering part-time work and still meet the PPP requirements, great. However, be prepared to start hiring new people who are actually interested in getting back to work.

Report Fraud

If you want to report fraudulent claims when employees turn down work just so they can stay on unemployment, you can let EDD know at report fraud.

The Federal government might have had a great idea for supplementing unemployment but how they implemented that idea makes you the bad guy when you shut it off by having work available. Overall, we feel it’s more important right now that you can reopen, rehire, and use the PPP money as it’s meant to be used. Whether that’s with your previous employees or you have to hire a whole new team, it’s up to you on how you choose to move forward. Let us know if we can help.

Forgetting the Laws

There are several laws companies tend to forget when you’re busy. Right now, it’s even easier to ignore some of the employment laws if you’re in survival mode. However, while you may believe you’ll get a free pass because of the pandemic… think again.

California has allowed very few exceptions to the normal employment laws and you will be held accountable for non-compliance if problems from those “forgotten laws” should pop up during a future audit. Here are a few things we’ve noticed:

  • Meal and rest breaks — Yes, even those employees working at home must still follow the usual timing for meal and rest breaks and those meal breaks need to show up on timecards.
  • Scheduling — Employees often like to create their own schedules when working at home. However, this can create payroll issues due to split work shifts (more than 1 hour between their morning and afternoon shifts) or overtime pay because they were in a flow and didn’t want to stop working that day. Maintain your regular work hours even with remote workers.
  • Classification issue #1 — If you have exempt, salaried employees who now have too few employees reporting to them (the equivalent of 80+ hours at a bare minimum), they have lost their exemption and should be hourly for the duration.
  • Classification issue #2 — If you have an exempt outside sales rep, the only way they qualify for the exemption is to be knocking on doors 51% of the time. Since that’s not possible, their exemption is not possible and they should be hourly for the duration.
  • Fraud — Unemployment is quite attractive at the moment due to the extra money people are receiving from the government. Some people are making more money with unemployment than when they worked. However, it is fraud if they are turning down work you have available for them and, whenever possible, you should fight their claim.

Life doesn’t feel anything like normal at the moment. However, things will eventually level out and California and the feds will be looking over everything that’s happened. Don’t become a target for an audit by pretending the laws are more relaxed right now. The basics haven’t changed at all.

Using Families First Money

“I have an employee who has been out for a week and I want to pay her with the Families First money I’ve heard about. How do I do it?”

Your HR Survival Tip

The Families First money is only available when the employee is personally and directly affected by COVID-19. Employees may be eligible for either the emergency Paid Sick Leave (ePSL) and/or the emergency FMLA (eFMLA). We will only cover the ePSL in this article.

As the employer, you must first certify your employee meets one of the allowed qualifications and you have the documentation required by the IRS so you can be reimbursed for paying the employee. Please keep in mind that shelter-in-place orders by the government are not considered to be a personal order of quarantine and do not qualify for this money.

When someone informs you they are being personally affected by COVID:

  • Obtain the certification required, then review it to make sure they qualify. They either need to provide the required documentation to back up their claim or, if unable to obtain a doctor’s note, write a statement about why they can’t work. The doctor’s note works for the statement as long as it mentions being required to stay home due to COVID symptoms, etc.
  • If qualified and you have documentation, the employee is eligible for up to 2 weeks of ePSL pay, with a max of 80 hours. The number of ePSL hours they are paid is based on their average weekly hours over the last 6 months (pre-COVID). For example, if they normally average 24 hours per week, their 2 weeks of ePSL will only be for 48 hours.
  • The level of pay varies (2/3 or 100%) based on the qualifying reason and each has a maximum you can pay per day and per employee.
  • Note: Regular sick time is not covered by ePSL so it’s either paid or unpaid based on accrued time available.

Once you know the gross amount charged to ePSL for employees and you have paid those monies, you can get reimbursed for that gross amount:

  • If you have an outside payroll provider, ask them for the forms they need to withhold federal taxes and how they want you to inform them about the amount that needs to be withheld.
  • When you run payroll, your payroll provider will withhold the requested amount from the federal taxes you would normally submit to the IRS: Federal income tax, Federal Medicare (both employee and employer portions), and Federal Social Security (both employee and employer portions). The amount withheld must match the gross ePSL pay.
  • The withheld amount stays in your bank account rather than going to the IRS, so you have been reimbursed because that money is still available to you.

The IRS will see what you’ve withheld on the tax filings so you need to make sure your backup matches it exactly. The certification is crucial to avoid issues with your reimbursement. Review your payroll reports when using ePSL so you know how your payroll provider is showing these transactions. Then add those reports to your backup so you have everything handy if you are audited next year. It’s obvious that 2020 is going to be an interesting tax year for everyone!

New Bills Proposed

Everyone is focused on the effects of COVID-19 and we thought it was time to give you something else to think about. Life, and California legislators, keep finding ways to challenge business owners. Proposed bills affecting employers this legislative session include:

  • AB3216 – Currently companies with 50+ employees are subject to the California Family Rights Act (CFRA), which is very much like the federal FMLA with a few exceptions. It provides up to 12 weeks of unpaid time off with job protection. This bill proposes two things: (1) to change CFRA so companies with 1+ employees are subject to this Act and (2) allow the 12 weeks to be used for diagnosed COVID-19 quarantine for the employee or close family. Bringing CFRA down to such small companies could be devastating unless it’s only for COVID-19 related situations…but it’s not clear.
  • AB2999 – This bill wants employers to provide 10 days of unpaid bereavement leave for employees who have worked at least 60 days prior to the leave. The employee could only use this leave for specific family members and would need to provide written proof of the death. Whether a company provides 1 day or 10, it usually never seems to be sufficient for the affected employee but we prefer the company be allowed to choose.
  • AB1844 – Since 2014, the Healthy Workplace Healthy Family Act has required paid sick leave for the diagnosis, care, or treatment of various conditions for the employee and their family. This bill would allow mental health days…health or behavioral health conditions would be covered. Given a company’s inability to require medical documentation, we expect to see even more abuse of sick time if this bill is passed.
  • AB1928 – This bill is trying to repeal AB5 regarding independent contractors. Instead, we would go back to using the original Borello test to determine who is an employee versus an independent contractor. Ironically, AB5 merely tried to add some clarification to the CA Supreme Court’s ruling on the ABC test, so we’re not sure this will achieve what they want.
  • AB1947 – They are proposing more time for employees who want to file a retaliation complaint with the Labor Commissioner. Currently, employees have 6 months but this bill would provide 12 months.
  • AB1963 – Currently, certain people (teachers, law enforcement, daycare employees, etc.) are required to report suspected child abuse or neglect. This bill wants to add more people as mandated reporters: HR personnel in companies hiring minors and anyone supervising or having direct contact with minors at work.
  • AB2143 – On 1/1/2020, a new law prohibited settlement agreements from stating the company would not rehire the employee unless they determined the employee engaged in sexual harassment or sexual assault. This bill wants to add criminal conduct as another reason to use the no rehire clause.
  • AB3313 – Currently, licensees and employees of care facilities must have training about laws governing the facilities. This bill proposes to add required training on various employment laws.
  • SB1129 – This bill will provide companies more time to fix their wage statements (pay stubs) prior to an employee filing suit. Currently, the company has 65 days and must fix the wage statements for the past 3 years. This bill proposes a company has to fix incorrect wage statements only for the past year and the clock wouldn’t start until the postmark date of the certified letter notifying the company of the problem.

We’ll keep you updated as we hear whether these bills are moving forward or being blocked. However, no matter what else is happening, we all need to remember that employment laws are still in place and you are still expected to be in compliance. It’s easy to forget or ignore those laws when you’re in survival mode.

Need Work?

“I’ve either laid off or furloughed most of my employees but am still trying to hold on to my core group. What happens when there is no work for them (or me) to do?”

Your HR Survival Tip

While our current situation wasn’t part of the plan when you were thinking it would be nice for a little downtime, it’s here and we need to make the best of it. It’s been very interesting to hear about new products and services being offered right now that have only been created since “normal” work was no longer an option.

There are several industries still able to do business but there are many who have slowed down or stopped. Rather than getting depressed about what we can’t change, focus on what you and your employees can do. Having a little time on your hands is perfect for creating, reorganizing, and thinking about your business needs going forward. You may not be able to hire everyone back the moment the shelter-in-place order is lifted, but you can start preparing to have a better and stronger business.

Keep yourself and your employees busy with the things you previously put off because everyone was too busy:

  • Have employees create a detailed manual of how they do their job. It should include sufficient detail so anyone could pick up that manual and do a pretty good job of filling in for them. This is a time-consuming task that often gets ignored. However, it can be extremely valuable when hiring and training people or even when someone goes on vacation.
  • Who doesn’t have garbage residing on our hard drives or online storage? Now is the time to clean and reorganize all those files. If you can still go to the office, carry this over to your paper files…or create a plan for doing it once you can.
  • As a business owner, do you spend at least one hour every week thinking about your business and what your next step or product could or should be? This is a proven technique for growing any business and now is the perfect time to develop that habit.
  • Have your employees draft their own job descriptions. The various tasks should include what equipment and software are used and the approximate amount of time spent each day/week/month on it. Each task should be summarized in 1-2 sentences. You might be surprised to find employees aren’t actually doing what you thought they did.
  • Create your plan for recovery. Will you do any advertising or offer discounts to encourage clients to connect quickly? Which of your employees will you need working first and what needs to happen before you can bring back more of your employees? Update your annual plan, if you had one.
  • Have you checked out any of the financial stimulus packages that might help you keep employees on your payroll? There are ways to receive some money you don’t have to pay back and loans available at low rates. The SBA (Small Business Administration) has some information you should at least review.

While you may not be able to conduct business as usual, you can take advantage of slow days. Making good use of this time will not only make you (and your employees) feel better but can result in future growth. Stay safe and keep your eyes and mind open for new opportunities!

Paid Leaves Effective 4/1/2020

Employers with 1 to 500 employees are subject to this new federal law (H.R. 6201). Effective 4/1/2020, it provides temporary benefits for employees who are directly impacted by COVID-19 (coronavirus).

  • Both part-time and full-time employees are eligible.
  • Employees are NOT eligible for these benefits if they are on a leave of absence or furlough and are not working at the time they become eligible.

We expect to hear that companies with under 50 employees may be excluded if the required benefits would jeopardize the viability of the business. Clearer guidelines are expected soon. It appears the exemption would only be for the childcare leave within the Emergency FMLA (see below). This law is set to expire on 12/31/2020.

Emergency Paid Sick Leave

Employers must pay employees for up to 80 hours (or two weeks) of paid sick leave at the regular rate for qualified full- or part-time employees. The regular rate is calculated from the average compensation over the past six months. There is no minimum length of employment to be eligible and prior absences do not count against this leave.

The company must provide two weeks (up to 80 hours) of additional paid sick leave to qualified employees. This is in addition to any balance they may have. If you do not provide “new” sick time, you cannot be reimbursed for it.

Qualified employees must have certification showing they are:

  • Subject to quarantine or an isolation order related to COVID-19 (full pay up to $511/day; $5,110/employee) – This does not apply to the general work closures or Federal, State or local directive to shelter in place. The employee must provide you a copy of the order they receive.
  • Advised by a doctor to self-quarantine (full pay up to $511/day; $5,110/employee) – The employee must provide you a certification from the doctor.
  • Showing COVID-19 symptoms and getting a medical diagnosis (full pay up to $511/day; $5,110/employee) – The employee must provide you a certification from the doctor.
  • Caring for an individual subject to a quarantine or isolation order or one who has been advised by a doctor to self-quarantine (2/3 pay up to $200/day; $2,000/employee). – The employee must provide you a certification from the doctor of the person they are caring for.
  • Caring for their child due to school closure or childcare provider is unavailable due to a public health emergency (2/3 pay up to $200/day; $2,000/employee) – The employee must provide you with the notice or email they received citing the closure.
  • Other substantially similar conditions specified by the federal Secretary of Health in consultation with the Secretaries of Treasury and Labor (2/3 pay up to $200/day; $2,000/employee) – This is not yet available.

Certification

The employee must provide appropriate certification to qualify for the Emergency Paid Sick Leave. While you don’t need the certification immediately, make sure you have it before paying the employee.

Without the proper certification, you will not be able to withhold payroll taxes to reimburse you for the money spent on this EPSL. You may need to provide this to IRS at tax time.

The certification must include:

  • Employee name
  • Qualifying reason for leave
  • A statement that the employee is unable to work (or telework) for that reason
  • Dates of the requested leave
  • Documentation of the reason for the leave, such as the quarantine or isolation order, the name of the healthcare provider advising the employee to self-quarantine, or the posted notice or email of the closure of the school or childcare provider

Emergency Family and Medical Leave (EFMLA)

Any company with 1 – 500 employees is subject to this component of the law, unless the company has received an exemption.

  • Eligibility:
    • Full- and part-time employees who have been employed by you for at least 30 calendar days.
  • Childcare Leave – The eligible employee is unable to work (or do remote work) because closures have resulted in a need for childcare leave.
    • Up to 12 weeks total time off.
    • The first 10 days are unpaid but the employee may use any available paid time off.
    • After 10 days, the employer pays the employee 2/3 of their regular rate of pay and usual number of hours. The pay is capped at $200/day or $10,000/person.
    • The employee’s job is protected in companies of 26 or more employees.
    • This is not available if the employee has been put on a furlough.

Tax Credits for Paid Leave

The law allows a tax credit for 100% of the qualified Emergency Paid Sick Leave and Caregiver Leave wages paid by the company. The company and employee must meet the qualifications to be eligible for the tax credits. Companies may deduct those wages from their normal tax payments made to the IRS by retaining withheld federal income taxes and both the employer and employee Social Security and Medicare taxes. Talk with your payroll provider about:

  • Creating new earning codes for the EPSL and EFMLA because you want to keep that money trackable for the IRS.
  • What paperwork they need to stop submitting the relevant taxes to the IRS after you have had to start paying anything out for EPSL or EFMLA.

New Offering from HR Jungle

While there is an overload of COVID-19 information out there, no one is telling you exactly how to make the employment changes needed, what those changes mean to you and your employees, and how to do it properly. This packet does that. 

HR Options for COVID-19

We have received a lot of calls from many of you with questions about what you can do and what effect it will have on employees… and your business. We wanted to provide a packet of information and documents that could help you with all of this, while saving you money!

You’ll have continuous access to this packet, which includes:

  • A detailed Summary of Employer Options regarding COVID-19;
  • Ready to use memos and other communication tools;
  • The forms you need to implement any employee changes;
  • And we’ll be updating information frequently.

Yes, we are charging for this but only $14.95 plus tax. We are still happy to help you in any way we can!

Saving on Payroll Costs

You have several options available to reduce your payroll costs but be sure to remain compliant while making changes. Make sure you provide employees something in writing when making changes and, when possible, provide at least a few days’ notice.

Reduction of Hours

  • Instead of continuing a full-time schedule, consider cutting back hours.

Reduction of Pay

  • As long as employees are paid at least minimum wage for time worked, you can cut the hourly rate of an employee with written notice.
  • When cutting hours or pay of a salaried exempt employee, first consider converting their salary to an hourly wage (annual salary / 2080 = hourly wage). This allows you to make changes without worrying about still meeting the state minimum salary. Once hourly, remember they must now complete a timecard and take meal/rest breaks.
  • If they remain salaried exempt, you must pay for the whole week if they work at all that week.
  • Provide as much notice as possible when reducing pay but, in extreme times, a couple of days may be sufficient.

Work Sharing

  • A common version is, if you have more than one person doing the same work, you might consider having two people share one job. Each person works half the day.
  • EDD is also calling work sharing as a program where you’ve reduced hours and the employee can collect unemployment based on the lost wages. However, there are very specific qualifications for this program so check them out before using this program:  https://www.edd.ca.gov/unemployment/Work_Sharing_Program.htm

Furlough

  • The company requires the employee take a specified unpaid amount of time off due to lack of work.
    • Employees remain your employees.
    • Employees are eligible to apply for unemployment benefits based on lost wages.
    • Employees may request to use any unused vacation/PTO time.
    • The Labor Commissioner MAY require you to pay out vacation/PTO for furloughs because it’s so similar to a layoff.
    • Sick time is not paid out.
    • Employees MAY be eligible to receive federal benefits if they qualify.

Layoff

  • The company terminates the employee but plans to hire them back when able.
    • Employees are no longer employed by the company.
    • Employees are eligible to apply for unemployment.
    • Employees must receive a final paycheck on the layoff date, including any unused vacation/PTO time.
    • Sick time is not paid out and the balance becomes available to them when the employee is rehired.

This is a good time to stay in contact with your laid off and furloughed employees so they know you care! This is also a good time to start making plans to rebuild a better, stronger, and more profitable business. We will eventually get past this current craziness and you want to be ready for it.