News & Insights

Daily DigestMarch 26, 2020by Stanton LawDaily Digest 3/26/2020 – FAQ COVID-19

Navigating the FLSA Tip Credit: Who and What Qualifies, Valid Tip Pools, and Other Things You Need to Know

Good morning,

Today’s daily digest will be a slight change of pace. We compiled all of the questions we received during last Friday’s webinar and over the last week regarding the Families First Coronavirus Response Act (FFCRA) and will be answering the top three questions asked most frequently below. We will still provide a brief portion of the news as promised.

• With regards to FFCRA, what is the difference between furlough and termination/layoffs?

o At this time, it is not perfectly clear how the FFCRA paid leave interacts with furloughed or terminated employees, so understand our advice is based on our application of this unusual situation to employment law in general. In the abstract, a furlough is a temporary, short-term reduction in an employee’s hours (maybe down to zero). The employee still remains on payroll and there would be an expectation of returning as work picks back up. As for terminations, of course, the employee is completely separated from employment and no longer on payroll. Both furloughed and terminated employees may be eligible for unemployment benefits and/or the continuation of COBRA benefits.

There is concern that furloughed employees who (because they’re still “employees”) apply for emergency paid sick leave (EPSL) under the FFCRA may receive the regular rate of pay they were earning prior to the furlough. Until we receive different guidance from the Department of Labor (DOL), though, our position remains that employees taking emergency paid leave or emergency FMLA (EFMLA) leave are paid a rate based only on the hours they’re scheduled during the furlough (not for what they may have worked in happier times). If their normal scheduled hours are reduced (or even zero) prior to the leave, then the paid leave would reflect this reduction. We base this counsel on the common sense proposition that paid sick leave is meant to pay people who take off from work when there is work to do, and not intended to pay them when there is no work to be done.

• When do employers need to implement the new paid sick leave for employees already home due to one of the reasons set forth in EPSLA?

o New information from the DOL sets forth that the FFCRA will go into effect April 1, a day earlier than we originally thought. There’s no obligation for employers to comply until then, although yesterday the agency released the poster employers will need to display in order to advise employees of their EPSLA and EFMLA rights. You can find that poster here. There’s no reason not to go ahead and post it, and, if you’re comfortable doing so, email the link to your remote employees. The more they understand their rights and obligations, the fewer uninformed questions you may get as the effective date approaches. Additionally, the DOL has announced a 30-day non-enforcement period to allow employers to comply with the new law without suffering any penalty or fee for non-compliance. To fall under this grace period, employers must try reasonably and in good faith to comply with FFCRA.

As you’ve probably been made aware by the bazillion emails we’ve been delivering, we’ll be hosting another webinar tomorrow, Friday, March 27 at 11:30 a.m. Please register here. We’ll be joined by our colleagues from Barrett & Farahany and explore their employee/plaintiff perspective of the FFCRA and employment laws in this sur-reality.

• Does an employee qualify for EPSL if they self-quarantine and refuse to come back to work out of fear of Covid-19?

o The short answer to this question is no. If an employee self-quarantines with only a subjective fear of contracting COVID-19 that is not pursuant to one of the qualifying reasons set forth in the EPSLA, then the employee does not qualify for EPSLA leave. We’re not necessarily counseling immediate adverse employment action in this situation, rather simply stating that employers don’t have to accept an employee’s apprehension or pay them to stay out of work.

The biggest headline for today is:

• Last night, the Senate passed a $2,000,000,000,000 (!) stimulus package. It is expected to be passed by the House of Representatives and signed into law over the next few days. So far, this bill plans to extend unemployment insurance, provide direct payments to Americans, provide loans to businesses, provide funds to hospitals, provide funds to state and local governments, and provide loans to specific industries with strings attached.

o The most important thing in this bill for small- and medium-sized businesses appears to be the Paycheck Protection Plan. Right now, the bill provides that employers with fewer than 500 employees may receive forgivable loans to cover employee salaries, insurance, rent, and other business costs listed in the bill. This forgivable loan also extends to businesses that rehire workers who were laid off due to this crisis.

In response to this crisis, Stanton Law now offers to potential new clients interim, short-term engagements to answer your legal questions. We’re happy to arrange for a ½-hour phone/video consultation with an attorney. We may be able to come up with a plan during that conversation and exchange, and it may be all the direction you need, at least for the short term. But when you need us to take on additional work, we’ll put in place a formal engagement letter and assign the work to the particular attorney who will be handling the specifics.

To set up our conversation, please call 404.881.1288, ext. 0 to speak with our administrator. She’s really cool, but please recognize that she obviously can’t provide legal advice.

If you’re more of a do-it-yourself fan:

• Review the Firm Policies & Procedures. By setting up an appointment, you’re agreeing to what we’ve set forth.

• Schedule a convenient time to talk by clicking this link: https://calendly.com/todd-stanton. There are 1/2-hour appointments available around the clock – please schedule what works for you.

• We’ll send you a calendar invite to lock-in our appointment.

• Send over any materials at which you’d like us to look and we’ll be ready to discuss your several courses of action.

At Stanton Law, we are glad to be one of your resources for daily updates on COVID-19’s effect on your business. If you have any questions regarding this or any other legal matter, please do not hesitate to contact our experienced Atlanta employment attorneys at 404-531-2341 or online.

Share