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Senate Passes Coronavirus Relief Act – Important Changes for Employers

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Yesterday, Congress passed, and the president signed, what they consider the second step in mitigating some of the economic harm caused by Covid-19. Many cannabis companies have grown large enough to be required to comply with the new requirements, which could have a major impact on cash flow over the next several months. Keep in mind that companies under 50 employees may have the requirements eased somewhat, so we will be following the Bureau of Labor’s regulatory updates over the next several weeks as this law moves into enforcement.

Paid Sick Leave Updates

Employers with under 500 employees are now required to provide paid sick leave to their employees under the following circumstances:

  1. The employee is quarantined by the government (any level of government);
  1. A medical provider has told the employee to self-quarantine;
  1. The employee has Covid-19 symptoms and is seeking a diagnosis;
  1. The employee is providing care to someone who has been quarantined or told to self-quarantine;
  1. The employee has a child whose school is closed or usual child care is unavailable due to Covid-19;
  1. Other reasons as provided by Health and Human Services, Treasury, or Labor.

Full time employees are entitled up to 80 hours of paid sick time, and part-time employees are entitled up to an amount of sick time equal to their usual 2-week work time. Payments for sick leave are capped at $511 per day and $5,110 aggregate for the employee’s own symptoms (circumstances 1 through 3 above), or $200 per day and $2,000 aggregate for caring for others (circumstances 4 through 6 above). Although usually sick time must be paid at the regular rate of pay, pay for caring for others may be paid at 2/3rds the regular rate.

If an employee requests Covid-19 sick time, you may not require that they find a replacement for their shift before taking the sick leave. This sick leave applies to all employees, current and newly hired. There is no waiting time prior to eligibility for paid sick leave. The employee need not use other sick time before using Covid-19 sick time.

By next week, a notice should be available from the Bureau of Labor that must be hung with the other required employment posters.

Like many other sick leaves, employees who exercise their right to take this leave may not be subject to retaliation by their employers. Employers who retaliate against employees who take this leave are subject to penalty.

Employers with fewer than 50 employees should keep an eye on updates from the Bureau of Labor, which may exempt businesses that could go under due to compliance with this rule.

This rule will be effective in two weeks.

FMLA Sick Leave Updates

In addition to the paid sick leave above, the legislation provides for additional sick leave requirements under FMLA for employers with fewer than 500 employees. This is important to note, as all other FMLA leaves only kick in for employers with 50 or more employees. Employers with 50 or fewer employees should keep an eye on Bureau of Labor regulations, as those employers may be able to apply for an exemption if compliance with this law could cause the employer to go out of business.

To qualify for the emergency sick leave, all the following conditions must be fulfilled:

  1. The federal, state, or local government must have declared an emergency due to Covid-19 (this has already happened at the federal level, as well as many states);
  1. The employee has a child under 18, and the child’s school has closed or the child’s usual child care provider is unavailable because of Covid-19; and
  1. The employee has worked for the employer for at least 30 days.

The first 10 days of sick leave are unpaid, although the employee can use other paid leaves (sick leaves, vacation, PTO, etc.) to supplement their income. After that, the sick leave needs to be paid, at no less than 2/3rds the employee’s regular rate of pay, and the hours they would usually work, capped at $200 per day and $10,000 aggregate. As this is part of the FMLA program, the paid leave extends for 12 weeks.

The employer is required to restore the employee to their same position, unless the employer has fewer than 25 employees and the employee’s position was eliminated because of the economic consequences of Covid-19. In that case, the employer should attempt to find an equivalent position, but if they can’t, they should keep the employee’s name on file and contact them if an equivalent job opens up within a 1-year period beginning on the earlier of (a) the date the Covid-19 emergency is declared over, or (b) 12 weeks after the employee’s leave starts.

The requirements will begin 15 days after enactment.

Unemployment Insurance and Tax Refunds

The federal government is also putting through grants to state unemployment insurance programs, provided that the state governments ease restrictions on unemployment claims, and ensure that unemployed persons have access to the unemployment system.

You should also talk with your accountant about the tax credits and refunds available for complying with the new paid sick leave policies.

If you have questions about how this impacts your business, please contact Green Light at (503) 488-5424.

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Green Light Attorneys Perry N. Salzhauer, Daniel Shortt, and Brittany Adikes have joined McGlinchey Stafford