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Paid Leave in the Time of the COVID-19 Pandemic

In the weeks prior to the federal government passing the Coronavirus Aid, Relief, and Economic Security (CARES) Act, human resource personnel, company owners, CFOs and accounting departments struggled to figure out how to deal with paid time off and work-from-home (WFH) policies as people were given directives to shelter in place.

Several organizations, including ACE Workforce, had already started shifting employees to remote work in order to limit potential exposure to COVID-19 and flatten the curve, or slow the spread of the novel coronavirus.

By May 20, our home state of New York issued a “stay-at-home” order, deemed “New York on PAUSE.” PAUSE stands for Policies Assure Uniform Safety for Everyone.

The mandate required all “non-essential” businesses to keep 100% of their workers home – employees and contractors who can work from home, should. Others would receive varying levels of financial support from employers or, beginning April 1, from the federal government as a result of the CARES Act.

It’s a lot of information to absorb and sort through. We’ve curated the most frequently asked questions about the pandemic and paid time off policies to help you sort through the policies and the financial help that may be available for your employees who have been furloughed or laid off.

Q.

What actions can business owners take if they are closed down and can’t make payroll?

A.

The Paycheck Protection Program, part of the CARES ACT, can help small businesses and non-profits with fewer than 500 employees retain their workforce – and even keep them working. SMBs can apply for a low-interest loan of up to $10 million through the SBA. The loan can cover business expenses, including rent, utilities, and payroll. Best of all, the money can be used to fund expenses retroactively from February 15. Loan payments are deferred for six months, and businesses may qualify for loan forgiveness if they retain employees. Business owners have until June 30 to reinstate employees and their salaries to qualify for the loan forgiveness.

You can also have your workforce reduce their hours. Somebody who goes from 40 hours a week to 20 may be eligible for partial unemployment. You’re paying them something, and the government is paying them something.

The reality is, unemployment, unfortunately right now is a tool to use. One thing I will tell you is this: Do not pay people regular wages and give them unemployment. Eventually, that will become a problem for you.

If you want to give employees a lump sum of severance, to cover the difference between their salary and what they will receive from unemployment, that most likely is acceptable. But if you continue to pay them, and ask them to perform services, while they are collecting unemployment, you are going to create a problem.

Q.

Q. What is the difference between a furlough and a layoff?

A.

If you absolutely must cut payroll, you have a choice between a furlough and a layoff. A furlough allows your staff to receive unemployment benefits, but also enables them to retain their health insurance and their status as an employee.

From a human resources perspective, putting employees on furlough means you will not have to recruit, interview, and hire new candidates once your business re-opens or profits start to pick up – and your employees can still collect the unemployment and federal aid that’s available right now.

Q.

Can business owners terminate some employees but not others?

A.

Unless they have a contract with stipulations against termination without notice, you can terminate any employee by laying them off. You do have to make sure to comply with discrimination laws and avoid the appearance that you might be laying off individuals due to disability, age, gender, or race.

Q.

Can employees in New York state qualify for Paid Family Leave to care for children whose school or daycare is closed as a precautionary measure?

A.

No. Paid Family Leave in New York will not be paid to employees caring for a child over the age of one who is home from school or daycare due to the facility being closed. You may qualify for PFL if you have an order of quarantine because you or a close family member tested positive for the virus.

Q.

What does the new federal Families First Act offer to employees?

A.

The Federal government has fewer restrictions for Paid Family Leave under the Families First Coronavirus Response Act. The act allows employees in businesses between 50 and 500 lives paid leave if they have the coronavirus or if their children are home from school or daycare because the school or daycare is closed.

Employees who test positive for the coronavirus will receive two weeks of full salary up to $2,300 a week. This salary is paid for by the business, who will get a 100% tax credit for the payment. Parents or guardians caring for children home from school or daycare can receive 12 weeks of paid leave at 2/3 of their wage, up to $200 per day.

Q.

Will previously earned PTO prevent an employee from getting unemployment until the PTO has been exhausted?

A.

No. An employee can collect PTO and unemployment concurrently. With servers overloaded, it may take a while to complete the unemployment application in New York or other states. Individuals who collect unemployment from their state also qualify to receive an additional $600 a week.

Q.

What businesses are considered Essential Services?

A.

Essential businesses vary state-by-state. You can find the information on your state’s website.  

ACE Workforce is here to help through these challenging times. Feel free to reach out with questions and explore our webinar series here.

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