As California employers endure the economic slowdown and impact of State and local isolation orders, they must also act swiftly to update employment policies and practices based on a series of new laws enacted at the Federal, State and local levels. These laws focus on worker protections and requirements for additional paid leave. However, certain provisions also afford important rights, benefits and options to eligible employers, including potential tax credits, refunds and preferential borrowing.

Parker Milliken’s labor and employment department is closely following all developments relevant to employers, which include but are not limited to:

California Executive Order N-33-20 & the Los Angeles County Safer at Home Order: These emergency orders loosely define which California and Los Angeles County employers are allowed to continue to operate at this time based on the CISA Critical Infrastructure Sectors (defined by the Federal Government) and, within Los Angeles County, the definition of “essential” businesses, infrastructure and operations. Analogs to the Los Angeles County Safer at Home Order have also been enacted in other counties throughout the State.

The Families First Coronavirus Response Act (FFCRA, effective April 1, 2020): Subject to dollar for dollar tax credits and refunds, the FFCRA requires employers with fewer than 500 employees to provide 10 days of extra sick pay and, thereafter, up to 10 weeks of paid FMLA leave to eligible employees. Statutory criteria for employee eligibility differs as between the two types of paid leave, but both include employees who must stay home to care for children whose schools or childcare are closed due to COVID-19. Required payments are capped in differing amounts depending on the reason for the paid leave. Covered employers must post in a conspicuous location in the workplace a written notice, published by the Department of Labor, regarding employee rights under the FFCRA. Notice may also be disseminated electronically to employees who are working remotely.

Department of Labor FFCRA Guidelines: In the week following the enactment of the FFCRA, the Federal Department of Labor (“DOL”) published question and answer guidelines clarifying employer and employee rights and obligations under the FFCRA. Among other important clarifications, the DOL explained that covered employers are not required under the FFCRA to pay out Federal sick pay or paid FMLA leave to employees who are not being scheduled to work because of lack of work or a work site closure.

Coronavirus Aid, Relief, and Economic Security Act (CARES Act): Among its employment related provisions, the CARES Act: (1) provides substantially heightened unemployment benefits in the amount of $600 per week to employees who are subject to furlough or lay off due to COVID-19; (2) allows eligible employers to defer payment of applicable payroll taxes through December 31, 2020, with half of the deferred amount due on December 31, 2021 and half by December 31, 2022; (3) provides for additional tax credits in an amount equal to 50% of qualified wages for certain employers subject to closure who nonetheless retain employees; and (4) creates the Paycheck Protection Loan Program to expand SBA loan eligibility for costs relating to employee compensation and benefits. The CARES Act further provides under certain circumstances for forgiveness of the principal borrowed by employers.

Article 5-72HH of the Los Angeles Municipal Code: Pending a final signature by Mayor Garcetti, employees of employers with more than 500 employees will soon be entitled to 80 hours of additional paid sick leave akin to the employees covered under the FFCRA. However, qualifying criteria under the City of Los Angeles Ordinance is distinct and includes employees who elect to take time off because they are at least 65 years of age or suffering from certain other enumerated health conditions that place them in a heightened risk category for COVID-19.

Please feel free to contact us if you have any questions or require any assistance. If you would like to receive Parker Milliken’s future Labor & Employment Updates, Financial Services Updates, and/or Real Estate Updates, please let us know. In the meantime, please stay safe.