An Analysis of Federal & Ohio COVID-19 Legislation
31 Mar 2020
Written by Max Dehn & Madilyn Maruna
Over the last few weeks, in the wake of COVID-19, multiple Federal and State laws have been passed that impact employment law. The attorneys at Cavitch have provided comprehensive summaries on these new laws. Below is a brief summary of the benefits employees are entitled to under the new legislation to date, as well as areas where Federal and Ohio legislation overlap.
Families First Coronavirus Response Act (FFCRA)
The FFCRA is a Federal Act that provides for up to 80 hours of paid time off for certain COVID-19 related purposes (Paid Sick Leave), and 12 weeks (10 weeks of which is paid at 66% of an employees’ regular rate) of emergency FMLA for the care of children arising from school and day care closures (Extended FMLA). The Department of Labor has provided some important guidance as outlined below.
- Effective Date: April 1, 2020.
- Undue Burden Exception: Businesses with fewer than 50 employees (Small Businesses) may be exempt from the Extended FMLA provisions and the Paid Sick Leave provision regarding the care of children arising from school and day care closures. To qualify for the exemption, a Small Business must be able to show that such requirements impose an undue burden on it. The DOL has instructed Small Businesses to document the basis for a claimed exemption.
- Undue Burden Defined: A Small Business may qualify for the exemption if such obligations “jeopardize the viability of the business as an ongoing concern.” A Small Business may claim the exemption if any of the following are substantiated by an authorized officer of the company:
- Payment of the provision of Paid Sick Leave or Extended FMLA would result in insolvency, or cause the Small Business to cease operating;
- The absence of the employee would jeopardize the business because of the employee’s specialized skill, knowledge, or responsibilities; or
- There are insufficient qualified employees to replace the employee seeking leave.
- Delay in Enforcement: The DOL announced that it will forego enforcement of an employers’ obligations to pay Paid Sick Leave or Extended FMLA until April 17, 2020, so long as employers are making good faith efforts to comply. Moreover, the DOL suggested in a Field Assistance Bulletin that employers with insufficient cash flow may delay payments until 7 days after they have withdrawn the money from payroll tax deposits, or after they receive refunds from the IRS where such withdrawals are insufficient to fund the payments, as provided in the tax credit provisions of the FFCRA.
- Record Keeping: Employers must keep records to substantiate refunds and tax credits from the IRS. Generally, the information required for IRS Form 8994 will be sufficient.
- No Expanded Tax Credit For Additional Discretionary Benefits: Employers are free to assist employees with additional paid time off or other compensation beyond the requirements of the FFCRA, but such payments are not eligible for reimbursement.
- Simultaneous Use: Employees may use two weeks of Paid Sick Leave simultaneously with the (unpaid) first two weeks of Extended FMLA. They may then take the 10 weeks of paid Extended FMLA. Employers may not require employees to use vacation or PTO time before or in conjunction with Paid Sick Leave or Extended FMLA, although the employee may elect to do so.
- Set-Off Regarding Previous Leave: Leave provided before April 1, 2020 does not count against Paid Sick Leave under the FFCRA. Regarding Extended FMLA, eligible employees are entitled to 12 weeks of FMLA leave total – meaning FMLA leave utilized before April 1, 2020 and in the previous 12 months does count against the total weeks of FMLA leave available.
- FFCRA Benefits Cease Upon Business Closure or Lay Off: Employees are not eligible for FFCRA benefits when the employer ceases operations or lays off the employee due to lack of work, although such employee ay be eligible for unemployment in such instances.
- Intermittent Extended FMLA Not Required: Intermittent Extended FMLA is available only with the employer’s consent.
- Employers Must Reinstate Employees: Generally, employers must reinstate employees who take leave under Extended FMLA. Standard FMLA exceptions apply, including those for key employees. The FFCRA also exempts employers with fewer than 25 employees from restoring employees to their previous position if specific conditions apply.
Title II of the Coronavirus Aid, Relief, and Economic Security Act (CARES Act)
The CARES Act, signed into law on March 27, 2020, provides for additional support to individuals and Small Businesses. While the CARES Act is lengthy and contains detailed information regarding forgivable SBA loans, this summary will focus on Title II, Assistance For American Workers, Families, and Businesses.
- Section 2102 – Pandemic Unemployment Assistance: This section offers unemployment benefits fully funded by the Federal government for up to 39 weeks to those individuals not traditionally eligible for such benefits, including individuals who are self-employed. Covered individuals are entitled to their weekly benefit as determined by State law, as well as the additional $600 increase in unemployment benefits described in Section 2104 (discussed below). This section is applicable to weeks of unemployment from January 27, 2020 through December 31, 2020.
A “Covered Individual” includes the following:
- The individual has been diagnosed with COVID-19, or is experiencing symptoms and seeking a medical diagnosis;
- A member of the individual’s household has been diagnosed with COVID-19;
- The individual is providing care for a member of their family or household who has been diagnosed with COVID-19;
- The individual is the primary caregiver for a child or other person in the household who is unable to attend school or another facility as a direct result of COVID-19;
- The individual is unable to reach his or her place of employment because of a quarantine imposed due to COVID-19;
- The individual is unable to reach his or her place of employment because they have been advised by a health care provider to self-quarantine due to concerns related to COVID-19;
- The individual was scheduled to commence employment and does not have a job or is unable to reach their place of employment as a direct result of COVID-19;
- The individual has become the breadwinner of his or her household because the head of household died as a direct result of COVID-19;
- The individual has to quit his or her job as a direct result of COVID-19; or
- The individual’s place of employment is closed as a direct result of COVID-19.
A “Covered Individual” does not include:
- An individual who has the ability to telework with pay; or
- An individual receiving paid sick leave or other leave benefits.
- Section 2104 – Emergency Increase in Unemployment Compensation Benefits: This section provides an additional $600 in weekly unemployment benefits to eligible individuals through July 31, 2020, as determined under State eligibility requirements.
- Section 2107 – Pandemic Emergency Unemployment Compensation: This section expands State unemployment benefits regarding the duration of the benefit and who qualifies for unemployment. In Ohio, eligible individuals typically receive 26 weeks of unemployment benefits. This provision provides an additional 13 weeks of State unemployment benefits, for a total of 39 weeks. Eligible individuals are those who: (1) Have exhausted all regular compensation under State or Federal law; (2) Have no rights to regular compensation under State or Federal law; (3) Are not receiving unemployment compensation from Canada; and (4) Are able to work, available to work, and actively seeking work.
The weekly benefit amount includes the regular employment weekly benefit, as well as the additional $600 weekly benefit provided under Section 2104. Although there is an active work search requirement in Section 2107, it provides that State law governing work search requirements for unemployment benefits apply, and that the requirements must be lenient. The Ohio Department of Job and Family Services has waived such search requirement, consistent with Ohio H.B. 197 Section 19(B)(2).
- Ohio Stay at Home Order: On March 23, 2020, a Stay At Home Order took effect in Ohio. This Order requires that all individuals stay at home, except to perform Essential Activities. Essential Activities include leaving your home for any of the following reasons: (1) Health and safety; (2) To obtain necessary supplies and/or services; (3) For outdoor activity; (4) For certain types of work at Essential Businesses or Operations; and (5) To take care of others.
- Ohio Unemployment: Ohio has expanded the availability of unemployment and has expedited the application process through waiving the work search and waiting week requirements. Additionally, Ohio business owners will not be penalized in their unemployment contribution rates in the future due to COVID-19. See Ohio H.B. 197.
- Ohio Department of Insurance Health Insurance Flexibility: On March 20, 2020, the Ohio Department of Insurance issued Bulletin 2020-03, Health Insurance Coverage Flexibility for Ohio Employees. During the state of emergency caused by COVID-19, Insurers are required to permit employers to continue covering otherwise ineligible employees, allow insureds to defer premium payments for up to 60 days interest free, expand COBRA coverage, and allow for a special enrollment period for all employees who lose coverage.