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Employment Law

Employment Law

AB-685: Notice of Exposure to COVID-19 to be Required within 1 Business Day

September 25, 2020

Last week, AB-685 was signed into law adding Section 6409 and amending Sections 6325 and 6432 to the State Labor Code. Effective January 1, 2021 through January 1, 2023, employers will be required to provide written notice of a possible COVID-19 exposure to all employees, their Union, and employers of subcontracted employees on the premises during the exposure within one (1) business day. The notice must also provide COVID-19-related benefits and options along with disinfection and safety plans that will be implemented and completed per CDC guidelines. Records of the notification must be kept for at least three (3) years.

In addition, the employer must place a hazard notice at the entry of the premises and prohibit entry to the immediate area where the exposure exists until the area is made safe. Exceptions apply if the prohibition were to “materially interrupt the performance of critical governmental functions essential to ensuring public health and safety functions or the delivery of electrical power or water.” These noticing requirements do not apply to health facilities.

This bill also codifies required noticing of the public health department within 48 hours and provides for a civil penalty for employers who violate any of the noticing requirements. To read the full bill, click here.

California Expands COVID-19
Supplemental Paid Sick Leave

September 21, 2020

On September 9, 2020, Governor Newsom signed AB 1867 into law which requires large employers to provide supplemental paid sick leave for COVID-19 related reasons. California employees who were previously excluded by the Families First Coronavirus Response Act (“FFCRA”), such as emergency responders, health care providers, employees of companies with 500 or more employees nationally, and certain food sector workers will now benefit from much of what FFCRA provided.  Companies must comply with the new laws before September 19, 2020, they apply retroactively to April 16, 2020, and they will remain in effect until the later of December 31, 2020, or when the FFCRA emergency coverage expires.

Specifically, AB 1867 adds Sections 248 and 248.1 to the Labor Code which entitles full time employees of companies with 500 or more employees up to 80 hours of supplemental paid sick leave for the following reasons: 1) The employee is subject to a federal, state or local quarantine or isolation order related to COVID-19; 2) A health care provider advises the employee to self-quarantine or self-isolate due to concerns related to COVID-19; and/or 3) The hiring entity prohibits the employee from working because of health concerns related to the COVID-19’s potential transmission. This leave, however, cannot be used to care for a child or sick family member as is provided in the FFCRA.

Employees who are not full time, but work a regular schedule, are entitled to supplemental paid sick leave equal to the number of hours they regularly work over two weeks.  Governor Newsom previously used his emergency authority to authorize two weeks of paid quarantine leave for all food sector workers in the state – but AB 1867 codified it into law and expanded the benefit to include all employees of large companies who leave their home to go to work. Like the FFCRA, pay is capped at $511 per day and $5,110 in the aggregate. Companies with less than 500 employees are still covered under the FFCRA, but employees of large companies who only work from home are not entitled to the supplemental paid leave.

This bill further clarifies and emphasizes that this pay is to be supplemental to any sick time the company is required to pay under Section 246 of the Labor Code and in addition to any paid leave, vacation time, or paid time off the employee is already provided by their company. The company cannot require their employee to use any other paid or unpaid time off before the employee uses the COVID-19 supplemental paid sick leave or in lieu of the COVID-19 supplemental paid sick leave.

AB 1867 does not include a collective bargaining exemption. This means that employees are entitled to supplemental sick leave in addition to any bargained for paid time off. However, if the parties have negotiated or the employer has implemented a supplemental paid time off policy specifically related to COVID-19 pursuant to Executive Order N-51-20 or Section 248, then the company may count the hours of the other paid benefit or leave towards the total number of hours of COVID-19 supplemental paid sick leave that the company is required to provide.  If more supplemental time than is legally required was agreed upon, then it should still be paid.

This bill also adds Section 113967 to the Health and Safety Code to allow food facility workers to wash their hands every 30 minutes or as needed.

You can read the full bill and poster at the following links: AB 1867Non-Food Sector Employees Poster.

City of Los Angeles Ordinance: Supplemental Paid Sick Leave Due to COVID-19

April 2, 2020

The City of Los Angeles passed an Ordinance on March 27, 2020 which expands Coronavirus-related paid time off to workers of companies with over 500 employees in the state or over 2,000 in the country. This ordinance guarantees 2 weeks of sick time for those who perform any work within the City of Los Angeles and will remain in effect until the state of emergency has passed.

The Federal Families First Coronavirus Response Act (FFCRA) which went into effect on April 1, 2020, only gave 2 weeks of sick time to employees of companies with less than 500 employees. This new ordinance bridges the gap for employees of large companies. We see this ordinance largely benefiting employees of large companies who have not yet earned a generous paid leave of over 160 hours a year and those who perform any work, including deliveries, within the City of Los Angeles.

This ordinance also allows at-risk populations who are not sick or those advised to self-quarantine to take sick leave, among other factors. An employer may not require a doctor’s note or other documentation for the use of Supplemental Paid Sick Leave. In addition, a CBA may only supersede this ordinance if it directly addresses COVID-19 sick leave in clear terms. Exceptions do apply to healthcare workers and other employees, so please contact us if you have any questions regarding who this ordinance should cover.

Unions May Apply for Loans Under the CARES Act

March 31, 2020

Although the Paycheck Protection Program loans provided for by the CARE Act are not available to labor organizations, it does seem that the Economic Injury Disaster Loans (Section 1110 of the CARES Act) may well be available and we are encouraging our labor union clients who believe they may need such relief to apply. These loans are made available to "private nonprofit organizations," an undefined term that tax lawyers are interpreting to include labor organizations and other non-charity nonprofits. 

Your Accountant or our firm can assist in the application process.

The maximum loan amount is the lesser of (a) the actual economic injury to the organization as determined by the SBA or (b) $2,000,000. An organization may request as an advance on the loan an emergency grant of up to $10,000 to be provided within three days after application for the loan. The interest rate is 2.75% for non-profits.

These loans may be used to pay fixed debts, payroll, accounts payable and other bills that cannot be paid because of the disaster’s impact. They may also be used, among other purposes, for: paid sick leave to employees unable to work due to the direct effect of COVID–19; maintaining payroll to retain employees during business disruptions or substantial slowdowns; rent or mortgage obligations; and obligations that cannot be met due to revenue losses.

You are required to pay back the loan, except for any amount that is advanced as an emergency grant. Repayment of principal and interest may be deferred for up to 4 years, depending upon the terms of the loan.

The CARES Act waives the standard EIDL requirements that: (a) the borrower provide a personal guarantee for loans up to $200,000; (b) that the borrower be unable to otherwise obtain credit; and (c) that a nonprofit applicant be in operation for at least a year prior to the disaster. Instead a nonprofit must have been in operation on January 31, 2020. Additionally, EIDL loans may be approved by the SBA based solely on the applicant’s credit score.

Coronavirus Aid and Response Acts

March 28, 2020

*For a printable PDF version of this article, please click HERE.

On Friday, March 27, 2020, the ‘‘Coronavirus Aid, Relief, and Economic Security Act’’ (“CARES Act’’) was signed into law.  It supplements the “Families First Coronavirus Response Act” passed last week in the wake of the economic recession caused by the Coronavirus (COVID-19). Below are summaries of the major points (of what is over 800 pages of legislation) which we believe are most important to our clients. It is important to note that these provisions are a “floor.”  Anything in your collective bargaining agreement that provides for a better benefit or anything you can achieve in emergency bargaining that surpasses what is here would take precedence. For those who are curious or otherwise suffering from chronic insomnia in these difficult times, you can read the full Acts and DOL Q&As at the following links:  H.R. 748; H.R. 6201; Mandatory Posters & Q&As

H.R. 748 – CARES Act

TITLE I – KEEPING WORKERS PAID AND EMPLOYED

Paycheck Protection Program (Section 1102)

Increases the government guarantee of loans made for the Payment Protection Program under section 7(a) of the Small Business Act to 100 percent through December 31, 2020.

Requires eligible borrowers to make a good faith certification that the loan is necessary due to the uncertainty of current economic conditions caused by COVID-19; they will use the funds to retain workers and maintain payroll, lease, and utility payments; and are not receiving duplicative funds for the same uses from another SBA program.

Loan Forgiveness (Section 1106)

Establishes that the borrower shall be eligible for loan forgiveness equal to the amount spent by the borrower during an 8-week period after the origination date of the loan on payroll costs, interest payments on any mortgage incurred prior to February 15, 2020, payment of rent on any lease in force prior to February 15, 2020, and payment on any utility for which service began before February 15, 2020.

The amount forgiven will be reduced proportionally by any reduction in employees retained compared to the prior year and reduced by the reduction in pay of any employee beyond 25 percent of their prior year compensation. To encourage employers to rehire any employees who have already been laid off due to the COVID-19 crisis, borrowers that re-hire workers previously laid off will not be penalized for having a reduced payroll at the beginning of the period.

Educational Provisions and Student Loan Flexibility (Subtitle B)

For students who dropped out of school as a result of COVID -19, the student is not required to return Pell grants or federal student loans to the Secretary. In addition, student loan payments will be deferred for 6 months, through September 30, 2020, without penalty to the borrower for all federally owned loans.  This provides relief for over 95 percent of student loan borrowers. For teachers who could not finish their year of teaching service as a result of COVID-19, their partial year of service shall be counted as a full year of service toward TEACH grant obligations or Teacher Loan Forgiveness.

TITLE II - ASSISTANCE FOR AMERICAN WORKERS, FAMILIES, AND BUSINESSES

Unemployment Insurance (Subtitle A)

Pandemic Unemployment Assistance Extending Benefits (Section 2102): Creates a temporary unemployment assistance program through December 31, 2020 to provide payments to those not traditionally eligible for unemployment benefits (part-time, self-employed, gig economy workers, limited work history, etc.) who are unable to work as a result of COVID-19.

Emergency Relief to Reimbursements (Section 2103): Provides payments to reimburse nonprofits, governmental agencies and Native American tribes for half the costs they incur to pay unemployment benefits through December 31, 2020.

Emergency Increase in Unemployment Benefits (Section 2104): For states that choose to participate in this program, this section provides an additional $600 per week to each recipient of unemployment insurance or pandemic unemployment assistance for up to four (4) months.

Temporary Elimination of the Waiting Week (Sections 2105): Provides funding to pay the cost of the first week of unemployment benefits through December 31, 2020 for states that choose to pay recipients as soon as they are unemployed.

Emergency Continuation of Unemployment Compensation (Section 2107): Provides an additional 13 weeks of unemployment benefits through December 31, 2020 for those who remain unemployed after their state unemployment benefits are exhausted.

Temporary Funding of Short-Term Compensation (Sections 2108 through 2111): Provides funding to states that have Short Term Compensation Funding Programs in place where employers reduce hours rather than laying employees off. The employees with reduced hours will receive a pro-rated unemployment benefit. Reimburses states for half the program costs. Additional grants and assistance are provided through this Act to enact these programs.

Rebates and Other Individual Provisions (Subtitle B)

Recovery Rebates for Individuals (Section 2201): All U.S. residents with adjusted gross income up to $75,000 ($150,000 if married), who are not a dependent of another taxpayer and have a work eligible social security number, are eligible for the full $1,200 ($2,400 if married) rebate.  In addition, they are eligible for an additional $500 per child.  This is true even for those who have no income, as well as those whose income comes entirely from non-taxable means-tested benefit programs, such as SSI benefits. The rebate amount is reduced by $5 for each $100 that a taxpayer’s income exceeds the phase-out threshold.  The amount is completely phased-out for single filers with incomes exceeding $99,000, $146,500 for head of household filers with one child, and $198,000 for joint filers with no children. The IRS will issue checks based on a taxpayer’s 2019 tax return if filed, or in the alternative their 2018 return. (Ensure a bank account is on file with the IRS for a quicker rebate via direct deposit.)

Early Withdrawal Penalty on Retirement Funds Waived (Section 2202): This provision waives the 10-percent early withdrawal penalty for distributions up to $100,000 from qualified retirement accounts, e.g., 401K Plans for COVID-19-related reasons on or after January 1, 2020.  In addition, income attributable to such distributions would be subject to tax over three years, and the taxpayer may recontribute the funds to an eligible retirement plan within three years without regard to that year’s cap on contributions. 

Temporary Waiver of Minimum Distribution Rules (Section 2203): The provision waives the required minimum (“RMD”) rules for certain defined contribution plans, e.g., 401K Plans, and IRAs for calendar year 2020. This provision provides relief to individuals who are required to withdraw a limited amount of funds from such retirement accounts during the economic slowdown due to COVID-19 and permits the individual to withdraw more than the RMD without penalty.  Normal taxes would still apply.

Business Provisions (Subtitle C) (Sections 2301 through 2308) provides the following:

Employee Retention Credit for Employers Subject to Closure;  

Delay of payment of employer payroll taxes;

Modification for net operating losses;

Modification of credit for prior year minimum tax liability;

Modification of limitation on business interest; 

Technical amendment regarding qualified improvement; and

Temporary exception from excise tax for alcohol used to produce hand sanitizer.

Labor Provisions

Paid Leave for Rehired Employees (Section 3605) Allows an employee who was laid off after March 1, 2020 to have access to paid family and medical leave if they are rehired by the employer. They must have been working for the employer at least 30 days prior to being paid off.

Single-Employer Plan Funding Rules (Section 3608) Provides certain single employer pension plans an opportunity to delay contributions due during 2020 until January 1, 2021. The bill also provides that a plan’s status for benefit restrictions as of December 31, 2019, will apply throughout 2020.  We will provide more detail on this provision in an update on our ERISA notes section.

TITLE III - SUPPORTING AMERICA'S HEALTHCARE SYSTEM

To learn more about what this Section provides, click the HR 748 link at the top of this article.

TITLE IV - ASSISTANCE TO SEVERELY DISTRESSED SECTORS

Provides $500 billion to Treasury’s Exchange Stabilization Fund to provide loans, loan guarantees, and other investments. Businesses and non-profits between 500 and 10,000 employees in receipt of an emergency loan will be subject to the following additional loan criteria and obligations:

Borrowers and their affiliates cannot engage in stock buybacks, unless contractually obligated, or pay dividends until the loan is no longer outstanding or one year after the date of the loan;

Borrowers must, until September 30, 2020, maintain their employment levels as of March 24, 2020, to the extent practicable, and retain no less than 90 percent of their employees as of that date;

Borrowers must agree the loan cannot be forgiven;

In the case of borrowers critical to national security, they must certify their operations are jeopardized by losses related to the coronavirus pandemic;

The funds received must be used to retain at least 90 percent of the recipient’s workforce, with full compensation and benefits, through September 30, 2020;

The recipient will not outsource or offshore jobs for the term of the loan plus an additional two years;

The recipient will not abrogate existing collective bargaining agreements for the term of the loan plus an additional two years; and

The recipient must remain neutral in any union organizing effort for the term of the loan.

Protection of Collective Bargaining Agreement (Section 4025)

The issuance of a loan shall not be conditioned upon on a business’s measures to enter into negotiations with the certified bargaining representative regarding pay or terms and conditions of employment. We interpret this provision to protect the integrity of existing CBAs and prevent concessionary bargaining.

H.R. 6201 - Families First Coronavirus Response Act (FFCRA)

The FFCRA created two new types of emergency paid leave for workers effective April 1, 2020 to December 31, 2020. In general, all employers with less than 500 employees are required to make these types of paid leave available to workers; however, businesses with less than 50 employees may apply for an exemption with the DOL if they can prove complying with the FFCRA would jeopardize the viability of their business. Under the FFCRA, employers pay for the leave and are reimbursed in the form of a tax credit on their payroll taxes. Employees at multiple locations and integrated subsidiaries may be counted together, which would put many business counts over 500 employees.

Emergency Family and Medical Leave Expansion Act (Division C)

FMLA Expansion Act: Only covers employees who, due to COVID-19, are unable to work because they need to care for a child whose school, childcare provider or place of care is closed or unavailable. It does not broadly extend paid family leave to all COVID-related events. It also allows for a 100% refundable credit to cover the cost of FMLA benefits paid by the employer. Employers may obtain the credit by offsetting FMLA benefit payments against their payroll taxes or, if benefits exceed payroll taxes, filing a request for an accelerated refund which the IRS claims will be paid within two weeks.

Requirements: (1) it applies to private employers with fewer than 500 employees and all public agencies with any number of employees; (2) covered employees (those who have been on the payroll for 30 days) will receive 2 weeks of unpaid leave for which eligible employees may use federal paid sick leave benefits (PSL) followed by up to 10 weeks of paid FMLA leave. The pay is capped at $200/day (and $10,000 in the aggregate), based on not less than 2/3 of the employee’s regular pay rate; or, for variable hour employees, the number of hours normally scheduled to work; (3) during the first two weeks of unpaid leave, the employee can, but cannot be compelled to, use any paid leave they have on the books with their employer, or may use the PSL benefit if eligible; (4) for the remainder of the FMLA leave, the employer is responsible for continuing pay at no less than 2/3 of the employee's "regular weekly rate," and; (5) there are, of course, exceptions/safe harbors that can be granted by the DOL (generally to employers with less than 50 employees) for hardship reasons.

Emergency Unemployment Insurance Stabilization Act (Division D)

Requires and funds additional/supplemental unemployment benefits.

There are no earmarks for special industries, workers, etc. The idea is to get everyone out of work due to COVID-19 onto UI so they have money.  The CARES Act above supplements this section.

Emergency Paid Sick Leave (Division E)

Paid Sick Leave (PSL) Benefit: Applies to private employers with less than 500 employees and all public agencies with any number of employees. It applies to all employees who cannot report to work due to (1) federal, state or local quarantine orders; (2) advice by a medical provider to self-quarantine; (3) those experiencing COVID-19 symptoms and seeking a medical diagnosis; (4) caring for an individual who is subject to the above; or (5) caring for a child due to a school or day care provider closure due to COVID-19 precautions.

Benefits: Employees receive 100% of their regular rate of pay for 2 weeks (equal to 80 hours for full time employees), up to a maximum of $511/day (and $5,110 in the aggregate). However, the rate of pay for those caring for a person affected by COVID-19 or for a child in the event of a school or day care closure will be paid at 2/3 their normal rate of pay, not to exceed $200 a day (and $2,000 in the aggregate). Employees are eligible for the PSL no matter how long they have worked for the employer. There is no length of service requirement.

Funding of Benefits: As with FMLA benefits, employers may obtain reimbursement for PSL benefits by offsetting benefit payments against their payroll taxes. If PSL benefits exceed the amount of the employer’s payroll taxes, the employer may file a request for an accelerated refund with the IRS.

Exceptions: The DOL may exempt small businesses with less than 50 employees if these obligations would jeopardize the viability of their business and may allow employers to exclude health care and emergency responders from this Act

Advisory on Union Officer Elections and Public Disclosure Reporting in Areas Affected by the Coronavirus (COVID-19)

March 18, 2020

Yesterday, the Office of Labor Management Standards (OLMS) issued a statement regarding the impact of COVID-19 on Union Officer Elections.   We are available to discuss issues with any of our clients who may be in the midst of or about to conduct internal union officer elections before year’s end.  Your nominations and election procedures may need some modification pursuant to this Guidance.  Please call as needed. 

The OLMS issued the following statement:

Due to the Coronavirus (COVID-19), the Department of Labor’s Office of Labor-Management Standards (OLMS) issues this advisory regarding the labor union officer election requirements under Title IV and the reporting requirements of Title II of the Labor-Management Reporting and Disclosure Act of 1959 (LMRDA). OLMS recognizes that due to the disruption caused by COVID-19, it may be difficult or impossible for some unions to conduct timely union officer elections. Similar difficulties may confront unions, labor relations consultants, and employers faced with public disclosure filing requirements. OLMS issues this advisory for those unions, employers, or labor relations consultants affected by COVID-19.

Elections: The LMRDA requires that all national and international labor unions elect their officers not less often than every five years. Officers of intermediate bodies, such as general committees, system boards, joint boards, joint councils, conferences, and certain districts, district councils and similar organizations, must be elected at least every four years, and officers of local labor unions not less often than every three years. See the OLMS Electing Union Officers publication for further information.

Labor unions affected by COVID-19 must still make a good faith effort to conduct officer elections within LMRDA timeframes.  OLMS has jurisdiction to file a civil enforcement action concerning a failure to hold a timely election after receipt of a complaint from a union member who has first sought a remedy from his or her union.  If OLMS receives a complaint from a union member solely regarding a union’s failure to hold an election within the LMRDA timeframes, but the election has been completed prior to OLMS receipt of the complaint, then OLMS will take no enforcement action.  If OLMS receives a complaint regarding a union’s ongoing failure to hold an election, and that failure was attributable to COVID-19, OLMS will promptly seek a voluntary compliance agreement with the union.  The agreement would require the union to hold the election when practicable on a date certain.  With such an agreement, OLMS will not seek a civil enforcement action based on the complaint, provided the election is held in conformance with the agreement.

Public Disclosure Reports: Labor unions, labor relations consultants, and employers affected by COVID-19 must make a good faith effort to file required public disclosure reports. The failure to file a timely and complete report is an ongoing violation of the LMRDA. OLMS has jurisdiction to file a civil enforcement action concerning a failure to meet reporting requirements. OLMS will not, however, pursue a civil enforcement action with regard to a delinquent or deficient report when these reporting violations are attributable to COVID-19. Unions, employers, and labor relations consultants wishing to take advantage of this enforcement policy should contact OLMS before the report is due, describe the circumstances necessitating additional time, and provide a date certain by which the report can reasonably be submitted. Under these circumstances, OLMS will not lodge a civil enforcement action to obtain the delinquent or deficient report.

What our Clients Should Know during the Coronavirus Outbreak

March 11, 2020

Many of our clients have been describing to us unilateral actions taken by Employers, mainly well-intended, in response to the potential outbreak of Coronavirus in California.  In our view, our Union clients ought to take a major and leading role in this process and not simply sit in the passenger seat as the Employer does all the driving.  We are sure most of our clients know that many of the employment actions taken or contemplated by their Employers involve mandatory subjects of bargaining, e.g., travel, working remotely, sick leave, heath benefits, etc.  Simply put, that means you share equal responsibility with the Employer for the health and safety of your members and must take equal responsibility for meeting the challenge. Below is a summary of California state laws and other considerations that will impact workers.

Travel and Working Remotely

Many Employers will have the unilateral option of limiting travel and conference attendance to minimize the risk to their workforce so long as these limitations do not affect pay or educational credits.  In the latter case, those issues are bargainable.  If telecommuting is an option, Employers may want to implement policies in respect to that subject.  They should discuss such policies with you so that there is no detrimental effect on pay or other benefits and no impact on an employee’s attendance record. Recently we were asked what happens if an employee has recently traveled to an at-risk area? Can the Employer require the employee to self-quarantine for 2 weeks? If the employee is able to work remotely, then that should not be an issue so long as pay, benefits, and attendance are not affected.  If the employee in that circumstance cannot work remotely, and the Employer nevertheless requires the employee to stay home, the employee should also be paid so long as the employee is ready and willing to work.  

In the alternate, staying home from work - such as self-quarantining when showing no signs of illness - could be problematic and each case should be weighed individually.  The options range from use of sick leave to discipline, all subject to a reasonableness standard.

It is important that you check your collective bargaining agreements (“CBA”) for provisions regarding paid time off in cases of emergencies and the like, file grievances, and demand immediate bargaining on any issue not easily resolvable.

Sick Leave

In 2014, California passed the Healthy Workplaces, Health Families Act that provides for a minimal level of paid sick leave to employees. Under the Act, Employers may cap accrual at 48 hours and can limit use of accrued leave to 24 hours, though some cities such as Los Angeles and San Francisco have adopted greater benefits.  Los Angeles allows Employers to cap accrual of sick time benefits at 72 hours and the use of yearly sick time at 48 hours.  However, Employers can choose to set high caps on accrued time or no caps at all.

If an employee is trying to cover a 14-day quarantine, the minimum levels under law are not sufficient. If your CBA is not sufficient, this subject should be bargained over and a special exception for Coronavirus quarantine should be achieved.

Other options may include taking leave under the Family Medical Leave Act (FMLA) or the California Family Rights Act (CFRA), however that leave will be unpaid and requirements exist such as working for the Employer for one year prior. It is also possible that ill employees (or those with ill family members) may instead be able to take leave under the Americans with Disabilities Act (ADA) or the Fair Employment and Housing Act (FEHA).

Employers may even be allowed to order a sick employee to stay home under the Occupational Safety and Health Act. However, it is unclear if sick time would be allowed if an employee is not sick but quarantined.

These issues often present grey areas under the terms of existing CBAs.  Hence, the need for prompt bargaining in order to resolve them.  Of course, we remain available to assist should you have any specific questions.

Employers Cannot Always Make Employees Use Paid Time Off While on FMLA/CFRA

March 12, 2019

Since the FMLA came into existence, employers have frequently required employees on FMLA to utilize sick leave, vacation and other forms of PTO (“paid time off”) concurrently with FMLA. 

When this issue comes up, and it continues to do so, the question to be answered is whether the FMLA leave is, in fact, unpaid. FMLA regulations provide that if during FMLA leave an employee also receives benefits, in any amount, from a disability plan or workers’ compensation, the FMLA leave is not unpaid. Because the FMLA’s general rule permitting employers to require employee substitution of paid leave only applies to unpaid FMLA, during periods of FMLA when any income replacement is received, employers cannot require employees to substitute paid leave. This exception to the FMLA general rule applies regardless of the amount of income replacement received. The same principles apply to leave under the California Family Rights Act (CFRA), which is the state law version of the FMLA.

For example, if an employee taking FMLA/CFRA leave is also receiving California State Disability Benefits (“SDI”) that replace a portion of their income, the employer may not require that the employee use PTO to make up for the portion of income not covered by the disability benefits. The employee can, however, be required to use paid leave during a waiting period before disability benefits are received, because the limitation is triggered by the receipt of income replacement benefits.

This issue was at the center of Repa v. Roadway Express, Inc., a 2007 7TH Circuit case.  Alice Repa suffered an injury that required surgery and a six-week absence from work. During the leave, Repa received a weekly $300 disability benefit through a private third-party disability plan. While she was on FMLA, her employer required her to use vacation and sick leave. Repa sued seeking to have her sick leave and vacation benefits restored. Repa was awarded summary judgment as the Court held that an employer’s ability to require an employee to substitute paid leave during FMLA is limited if, during FMLA leave, the employee also received disability benefits. While Repa, during her FMLA leave, could have elected to substitute paid leave at the same time she was receiving disability benefits, it was unlawful for her employer to require her to do so.

While this limitation is not new, it is commonly overlooked by employers especially where a collective bargaining agreement (“CBA”) or past practice allows for concurrent use of PTO with FMLA/CFRA time, without making the appropriate distinction.  It is our position that any such provision in a CBA would have to be interpreted in accordance with federal and state regulations. If your employer is requiring you to use PTO concurrently with FMLA or CFRA and you are also receiving a public or private form of disability benefit as full or partial income replacement, including Workers Comp, you may have a good claim. You have the right to file a complaint with the United States Department of Labor Wage and Hour Division (which enforces the FMLA) and the California Department of Fair Employment and Housing (which enforces CFRA). You also have the right to file a lawsuit in federal or state court. Importantly, if you win the lawsuit, your employer may be required to pay your attorneys’ fees as well as actual damages. If you believe your employer is violating your rights under the FMLA or CFRA, you should contact us for assistance.

FMLA Leave and No-Fault Attendance Guidance

February 28, 2019

The Department of Labor issued guidance regarding the intersection between FMLA leave and “no-fault” attendance policies. Here’s what you should know.

As many of you know, under no-fault attendance policies, employees generally accumulate “points” for each absence regardless of the reason for the absence. Employees are subject to discipline once they reach a certain number of points. However, certain types of absences cannot be counted as points. FMLA leave is one such example. That has been the rule for a very long time. The new DOL guidance confirms that this is still the rule.  That’s the good news. 

Now, for the bad news. Most no-fault attendance policies state that points will be removed from the employee’s record after a certain period of time – for example, one year. But what happens when an employee takes FMLA leave? Is the employer required to count time spent on FMLA towards the expiration date for attendance points? Unfortunately, according to the DOL, the answer is “no”.  An employer can require only working time count toward the expiration date for attendance points. 

For instance, if an employee gets an attendance point on January 1, 2018, that point would normally expire on January 1, 2019 under a policy stating that points expire after one year. However, if the employee takes FMLA during 2018, the employer can “freeze” the count-down clock during the period of the FMLA. If the FMLA was for thirty (30) days, the expiration period would be extended by an additional thirty (30) days.

There is, however, one exception to this rule. The employer cannot discriminate based on the type of leave that you use. It must treat FMLA leave the same as other similar types of leave.  For example, if the employer has a paid sick leave policy that counts time spent on paid leave toward the expiration date for attendance points, it must also count unpaid FMLA time toward the expiration date. Otherwise, the employer would be subject to a claim for discrimination.

If you or your co-workers believe you have been discriminated against or have any questions about FMLA and no-fault attendance policies, please contact our office to discuss your rights.

 

 




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