Legal guidelines And Tax Incentives Fill COVID-19 Paid Depart Void As Vaccinations Enhance And Extra Employers Return To In-Individual Work – Employment and HR
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April 2021 has seen two similar laws go into effect in
Philadelphia and Chicago, as well as action by the federal
government to provide tax credits to employers who elect to provide
paid leave for certain COVID-19-related reasons.
Soon after the COVID-19 pandemic hit the United States with full
force in March 2020, Congress acted by passing the Families First
Coronavirus Response Act (FFCRA), which required private employers
with fewer than 500 employees to provide paid leave to employees
unable to work for a variety of reasons related to COVID-19, while
also offering tax credits for employers providing such paid leave.
Following enactment of the FFCRA, some state and local governments
supplemented the FFCRA’s coverage, including to provide
comparable paid leave benefits to employees of larger
employers.
However, the FFCRA expired at the end of 2020 and was not
renewed or extended by Congress. Similarly, many state and local
laws passed to supplement the FFCRA expired at the end of 2020.
Recently, however, numerous state and local governments have
stepped in to fill the COVID-19 paid leave void left following
expiration of those laws, including employee leave related to
COVID-19 vaccination. In prior Alerts, we discussed
two such laws passed in March 2021 in
California. April 2021 has seen two similar laws go into effect
in Philadelphia and Chicago, as well as action by the federal
government to provide tax credits to employers who elect to provide
paid leave for certain COVID-19-related reasons.
Philadelphia Public Health Emergency Leave Ordinance
Effective March 29, 2021, Philadelphia’s latest Public
Health Emergency Leave (PHEL) ordinance replaced and expanded the
city’s
earlier COVID-19 leave law, which expired on December 31, 2020.
The expanded PHEL ordinance covers all employers with 50 or more
employees and permits covered employees to take leave for various
COVID-19 related reasons, including to receive the COVID-19 vaccine
and to recover from injury or illness related to the
vaccination.
Qualifying Reasons for PHEL
Under the ordinance, employers with 50 or more employees must
provide public health emergency leave when a covered employee is
unable to work due to one or more of the following seven
reasons:
- A determination by a public official or public health
authority, a healthcare provider or an employer that the
employee’s presence on the job or in the community would
jeopardize the health of others because of the employee’s
exposure to COVID-19 or because the employee is exhibiting symptoms
that might jeopardize the health of others, regardless of whether
the employee has been diagnosed with COVID-19; - To care for a family member of the employee due to a
determination by a public official or health authority, a
healthcare provider or the family member’s employer that the
presence of the family member on the job or in the community would
jeopardize the health of others because of the family member’s
exposure to COVID-19 or a determination by the employer that the
employee is a danger to the health of others because they are
exhibiting symptoms that might jeopardize the health of others,
regardless of whether the family member has been diagnosed with
COVID-19; - An employee’s need to: (i) self-isolate and care for
oneself because the employee is diagnosed with COVID-19; (ii)
self-isolate and care for oneself because the employee is
experiencing symptoms of COVID-19; or (iii) seek or obtain medical
diagnosis, care or treatment if experiencing symptoms of an illness
related to COVID-19; - To care for a family member who: (i) is self-isolating due to
being diagnosed with COVID-19; (ii) is self-isolating due to
experiencing symptoms of COVID-19; or (iii) needs medical
diagnosis, care or treatment if experiencing symptoms of an illness
related to COVID-19; - To care for a child if the school or place of care of the child
has been closed, or the child care provider of such child is
unavailable, due to precautions taken in accordance with the public
health emergency response; - An employee’s need to obtain immunization (vaccination)
related to COVID-19; and/or - An employee’s need to recover from any injury, disability,
illness or condition related to such vaccination.
PHEL Coverage and Use
To qualify for leave under the PHEL ordinance, an employee must
have worked for a covered employer for at least 90 days and meet
one of the following criteria: (1) work within the city of
Philadelphia; (2) normally work in Philadelphia but currently
telework from another location due to COVID-19; or (3) work for a
covered employer from multiple locations or from mobile locations,
provided that 51 percent or more of the employee’s work time is
spent within Philadelphia.
The coverage of the new PHEL ordinance is narrower than the PHEL
ordinance that expired at the end of 2020 in two key respects: (1)
the new ordinance does not expand coverage
beyond employers to “hiring entities” as had the prior
ordinance; and (2) the new ordinance only covers employees of
covered employers, and does not cover other categories of
nonemployee workers (e.g., gig-based workers and domestic
workers) that were covered under the prior ordinance.
Employees who work 40 or more hours per week are eligible for 80
hours of leave under the PHEL ordinance. Employees exempt from
overtime under the Fair Labor Standards Act are assumed to work 40
hours in each week. Employees who work fewer than 40 hours per week
are eligible for an amount equal to the time the employee is
scheduled to work or actually works on average in a 14-day period.
If an employee’s schedule varies from week to week, leave
eligibility is calculated by taking the average number of hours the
employee was scheduled to work over the past 90 days multiplied by
14.
Eligible employees can use all or a portion of their leave at
any time during and for up to one week following the conclusion of
a public health emergency. Employees must be able to take public
health emergency leave immediately upon hire, without any waiting
period or accrual requirements. Employers cannot reduce leave under
the ordinance by the amount of paid leave an employee has received
previously.
Notably, however, an employer is not required
to provide additional public health emergency leave to employees
performing in-person work if the employer’s
existing paid time off (PTO) policy provides 160 hours or more of
PTO in 2021 and permits the same uses as set forth under the PHEL
ordinance. Employers also are not required to provide additional
paid leave to teleworking employees if the
employer’s existing PTO policy provides 80 hours or more of PTO
in 2021 and permits the same uses as set forth under the PHEL
ordinance.
Notice Requirements
The ordinance required covered employers to provide notice of
the PHEL ordinance to employees by April 13, 2021. The notice must
state that employees are entitled to leave, the amount of leave
available and terms of use, as well as the prohibition against
retaliation. Employers satisfy the notice requirement by either (a)
supplying employees with a notice or (b) displaying a poster in a
conspicuous and accessible place. If an employee does not maintain
a physical workplace or teleworks, the employer must send an
electronic communication or conspicuously post the notice in a
web-based platform. To the extent an employer has not provided the
required notice, it should do so immediately.
An employee seeking public health emergency leave is required to
provide his or her employer with notice of the need for leave
“as practicable and as soon as feasible.” Employers may
request the individual provide a “self-certified
statement” asserting the leave was used in accordance with the
ordinance.
Job Restoration and Prohibition on Retaliation
Employers must restore employees who take public health
emergency leave to the position held when their leave began.
Employers also cannot retaliate against an individual who exercises
or attempts to exercise his or her right to public health emergency
leave under the ordinance.
Chicago COVID-19 Vaccination Rights Ordinance
On April 21, 2021, the Chicago City Council passed a COVID-19
Vaccination Rights Ordinance, which makes it unlawful for a Chicago
employer to (a) take any adverse action against employees for
taking time off to obtain a COVID-19 vaccination during their
scheduled work hours or (b) require employees to schedule
vaccinations exclusively during nonworking hours. The ordinance
also provides different time-off requirements for employers that
mandate COVID-19 vaccinations for employees and those that do not.
Additionally, the new ordinance expands the COVID-19
anti-retaliation protections provided to employees under prior
city
ordinances.
Under the ordinance, Chicago employers that mandate COVID-19
vaccinations for employees must provide them with up to four hours
of paid time off?at the employee’s regular rate of pay?per
injection if the appointment falls during the employee’s
scheduled work hours. Employers that mandate vaccinations may not
compel employees to utilize paid sick leave or other PTO to fund
those hours. Employers that do not mandate employee COVID-19
vaccinations must provide them with time off for vaccinations
scheduled during work hours and must permit employees to use any
available accrued paid sick leave or PTO for time off related to
getting vaccinated.
An employer who fails to provide employees with the required
time off for vaccination appointments or who retaliates against an
employee for taking time off will be subject to a variety of
possible penalties, including: (1) administrative and civil
proceedings brought against them by the commissioner of Business
Affairs and Consumer Protection, or alternatively the director of
Labor Standards; (2) private civil actions by affected employees,
with available recovery including reinstatement to the same or
equivalent position, compensatory damages equal to three times the
full amount of wages the employee would have received absent the
retaliatory action and an additional amount for any actual damages,
and attorneys’ fees and costs; and (3) potential civil penalty
fines ranging between $1,000 and $5,000 per violation. The
ordinance took effect immediately and will be in effect through the
date that the commissioner of the Department of Public Health
issues a determination that the risks posed by COVID-19 have
diminished and the ordinance may be repealed. There are no notice
or posting requirements for employers under the ordinance. The
commissioner of Public Health has the power to issue rules related
to enforcement of the ordinance, but none have been issued to
date.
Federal Government Tax Credit
The March 2020 Families First Coronavirus Response Act required
employers with fewer than 500 employees to provide two types of
leave to employees unable to work for various COVID-19 related
reasons: (1) up to 80 hours of emergency paid sick leave and (2) up
to 12 weeks of expanded family leave (the last 10 weeks of which
were required to be paid). Employers providing paid leave under the
FFCRA were eligible for tax credits to offset the cost of such
leave. The FFCRA’s paid leave mandate expired on December 31,
2020, but it was extended as a voluntary program through March 31,
2021, where the tax credit for providing FFCRA-covered leave
remained. Previous Alerts from
March and
April 2020 discuss the FFCRA in-depth.
As a reminder, the FFCRA provided for emergency paid sick leave
for the following six COVID-related reasons:
- The employee is subject to a federal, state or local quarantine
or isolation order related to COVID-19; - The employee has been advised by a healthcare provider to
self-quarantine for reasons related to COVID-19; - The employee is experiencing COVID-19 symptoms and is seeking a
medical diagnosis; - The employee is caring for an individual subject to a
quarantine or isolation order; - The employee is caring for a child whose school or place of
care is closed (or whose child care provider is unavailable) for
reasons related to COVID-19; or - The employee is experiencing any other substantially-similar
condition specified by the Secretary of Health and Human Services
in consultation with the Secretaries of Labor and Treasury.
The employee would be eligible for expanded family leave only
for reason No. 5 above (i.e., to care for a child whose
school or place of care is closed, or whose child care provider is
unavailable, for reasons related to COVID-19).
The American Rescue Plan Act (ARPA), signed into law by
President Joe Biden on March 11, 2021, further extends employee
paid leave for COVID-19-related reasons for employers covered by
the FFCRA on a voluntary basis, and as a continued inducement to
provide such leave, also extends the tax credit available to
employers who provide such paid leave.
Importantly, in addition to the existing six reasons for covered
paid sick leave under the FFCRA coverage, the ARPA added three new
reasons for paid sick leave:
- Obtaining a COVID-19 vaccination;
- Recovering from an injury, disability, illness or condition
related to a COVID-19 vaccination; and - Seeking or awaiting the result of a COVID-19 test or diagnosis
when the employee has been exposed to COVID-19 or the employer has
requested the test or diagnosis.
There are other key changes in the ARPA’s extension of the
FFCRA. The law provides for a new 80-hour bank
of paid sick leave for all nine of the
FFCRA/ARPA-covered reasons for leave, for use between April 1 and
September 30, 2021. In other words, even if an employee used his or
her FFCRA leave allotment during 2020 and/or the first three months
of 2021, employers can receive a tax credit for providing up to an
additional 80 hours of paid leave for covered reasons.
Additionally, the extension set forth in the ARPA allows an
employer to receive a tax credit for providing up to 12 weeks of
paid family leave for any of the nine covered
reasons for leave. Previously, employers could only receive the tax
credit for paid family leave provided to employees for reason No. 5
listed above (leave to care for a child whose school or place of
care had been closed, or whose child care provider is unavailable,
due to COVID-19 precautions). At this time, it is unclear whether
expanded family leave for these additional reasons will run
concurrently with an employee’s leave allotment under the FMLA,
as it did for mandatory leave under the FFCRA in 2020.
IRS has issued
guidance for employers seeking to claim a tax credit for
ARPA/FFCRA leave provided to employees between April 1 and
September 30, 2021.
What This Means for Employers
Although there is light on the horizon for pandemic-weary
employers, these new laws serve both to remind employers that the
COVID-19 pandemic is not over and that
vaccination will be key to ending the pandemic and returning to a
semblance of pre-pandemic “normal.” Smaller employers
(those with fewer than 500 employees) nationwide should take note
of the available tax credits under the ARPA as they continue to
grapple with employee absences necessitated by the COVID-19
pandemic and consider the role that vaccination will play into
efforts to return to in-person work. Similarly, employers in New
York, California, Philadelphia and Chicago?and likely other state
and local jurisdictions in the coming weeks and months?must become
familiar with paid leave and other requirements relating to
COVID-19 and the COVID-19 vaccine to ensure that they are in
compliance with applicable law. The myriad requirements under these
laws are complex and intertwined, and employers should consult with
counsel both to minimize risk and to maximize opportunities that
may exist in a COVID-19 employment law landscape that continues to
evolve.
For More Information
If you have any questions about this Alert, please
contact
Christopher D. Durham,
Jonathan A. Segal,
Daniel O. Canales,
Jennifer Long, any of the
attorneys in our
Employment, Labor, Benefits and Immigration Practice Group,
any
member of the
COVID-19 Strategy Team or the attorney in the firm with
whom you are regularly in contact.
Disclaimer:This Alert has been
prepared and published for informational purposes only and is not
offered, nor should be construed, as legal advice. For more
information, please see the firm’s
full disclaimer.
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