COVID-19 UPDATE: How to Navigate the New Families First Coronavirus Law (H.R. 6201)Mar 24, 2020
The Families First Coronavirus Response Act, summarized previously, gives employees of qualifying employers the right to paid sick leave and paid leave under the Families Medical Leave Act (“FMLA”). This law is presumed to take effect on April 2, 2020. In addition, Governor Sununu issued Executive Order 5 on Tuesday, March 17, 2020, that expands unemployment compensation in New Hampshire.
Options for Reducing Workforce
Employers are struggling to survive these difficult economic times while also realizing the hardship faced by their employees if terminated. In addition, employers do not want to lose talented employees. These are some options for addressing the added cost of salaries by either terminating or placing employees on leave:
- Place employee on leave, thus not terminating employment. Benefits may or may not continue depending on the triggering events under the benefits.
- Place employee on furlough, which is akin to temporary leave, or an hour reduction. The employment relationship is not terminated and benefits may or may not continue. There is also staggered furlough, for example: one week on, one week off.
- The employer could arrange for job sharing or reduction in hours, thus limiting hours of all employees and “sharing” the available hours.
- Terminate/lay off where the employment is terminated and the employer has COBRA requirements.
Furlough and reduction in hours may trigger COBRA notification depending on qualifications for benefits. Also, furloughed/leave employees may have an argument that they are entitled to H.R. 6201 paid leave and paid FMLA leave if they qualify on or after April 2, 2020.
If employers have questions about how to handle any workforce reduction, they should make sure they follow state and federal law and all their internal policies. Severance can be paid to help the employee but will impact payment of unemployment compensation. Also, if an employer pays severance, it needs to be done so as to not create issues of discrimination against any protected class. An employer should consider a release of claims by employees if paying severance.
Both before and after April 2nd, an employer may do economic layoffs. If an employer lays off an employee(s) who is not in any of the protected categories of COVID-19 under Executive Order 5 or H.R. 6201, the employer can do so. It would provide COBRA benefits as normally would be the case. Employees would be eligible for unemployment compensation.
After April 2nd, employers may still conduct economic layoffs. An employer should exercise caution and consult legal counsel in terminating an employee in a protected class under H.R. 6201 after April 2nd, or even prior to April 2nd, as it could be found to be a denial of paid leave benefits and/or be discriminatory. Any such mass layoffs should avoid disproportionately impacting employees in COVID-19 protected categories to limit the risk of future claims of discrimination.
Employers with More Than 500 Employees
If an employer has greater than 500 employees, as counted under FMLA law, an employee who is in any COVID-19 protected category would be eligible for state unemployment. There is no mandate to continue benefits, except to the extent that the employee is entitled to regular unpaid FMLA benefits under existing FMLA or any other paid leave offered by the employer.
Payment of Wages
New Hampshire employers need to follow state wage law to pay salaries to terminated employees within 72 hours and pay for the full period in which any work is done. For hourly employees, New Hampshire employers need to pay all hours worked within 72 hours.
For hourly employees, employers need to still manage work so that hours are properly recorded and overtime paid for any hours over 40 hours/week. While New Hampshire has a 2-hour minimum work rule for hourly employees who come to work, this would not apply to remote workers.
Coordination of Benefits under State and Federal Law
After April 2, 2020, if an employee has only worked for less than 30 days and is in a COVID-19 protected category and the employer has less than 500 employees, then the employee is entitled to 2 weeks (80 hours) paid sick leave under the federal law. The employee would then apply for unemployment compensation under Executive Order 5, if applicable, as the paid sick leave after 2 weeks is not available under the paid expanded FMLA until an employee has been employed for 30 days.
If an employee, having worked more than 30 days, is in a protected COVID category and an employer has less than 500 employees, then under federal law, the employer shall provide 2 weeks (80 hours) of paid sick leave. The employee shall be eligible for an additional 10 weeks of expanded paid FMLA leave only if the employee is unable to work due to the need to care for a child under 18 years of age due to school or place of care closing due to public health emergency. The employee would not qualify for state unemployment compensation during the paid leave period. All benefits, including health benefits, must continue during the paid leave. Once the paid leave period expires, an employee can qualify for unemployment compensation benefits.
An employer who terminates an employee, who is not eligible for paid leave or paid FMLA leave, should tell the employee to apply for unemployment compensation. Depending on whether the employee meets the qualifications of Executive Order 5, such benefit may be available immediately. If not, the claim will be processed as a normal claim with wait periods and a requirement to actively look for work. Query whether employees not under Executive Order 5 will be made to actively look for work to receive benefits and whether claims will be processed without the waiting period.
A New Hampshire employer should be cautious in trying to supplement wages or make medical payments for employees as such payments could have tax issues, insurance requirements, and impact unemployment compensation if not done properly.
Employees can apply for unemployment compensation online (https://www.nhes.nh.gov/) or via telephone (603-271-7700).
State and federal laws are constantly evolving in this area and employers should consult with counsel about specific circumstances and questions.