March 25th Update: FFCRA, Unemployment, WARN Act
I hope everyone took the opportunity to get outside today. It was truly lovely and there was so many signs of spring and growth and new life. Given all the things that are going on and that we are going through together, frankly, I needed it.
Of course then I went back inside and its back to all the uncertainty that has become our new normal.
A few housekeeping items before I go into laying out some answers to all the questions we fielded today.
We added a new feature to the site. On the front page of our website, in the public section, we’ve created a COVID-19 Safety Page that has a number of resources for your Safety Directors or anyone responsible for jobsite safety.
We added additional resources on addressing Contract Rights related to COVID-19 impact on construction schedules, even if your contracts lack a Force Majeure provision. Very useful.
We added new documents on complying with the WARN Act.
We added new guidance on Furloughs and Reductions in this environment.
We added new information on addressing insurance related concerns related to COVID-19 from Federated Insurance.
We added new guidance including a very good Q&A issued from the DOL.
Ok. Now. On to the update.
What is this 2020 Coronavirus Stimulus Bill? Well, despite what you might have heard from your employees, it hasn’t passed yet. We expect a vote around midnight tonight. I HOPE we will have at least a preliminary summary out to you some time tomorrow. What we THINK we know so far, and the item I am hearing the most about is a provision to increase unemployment benefits by $600 per week for four months. In 481 with our SUB fund, this would result in a person making more money not working than getting paid. This appears to be one of the major hold-ups right now on why it hasn’t passed yet so this is subject to change. I’m not going to speculate any more beyond mentioning this concern as so many of you have asked about it today.
Are we ever going to release something on the FFCRA? Well… yes. We already have. In fact, I think we’ve compiled some of the best resources there is on it right here on our site. The problem is that what most of you are wanting are answers to things there aren’t any answers for yet. As of right now we just simply don’t have a lot of guidance on how this thing will be implemented.
Nevertheless, I can do some rank speculation for some of your most common questions. Just keep in mind, if I say this is just a guess, that’s all it is.
Does the FFCRA apply to Bargaining Unit Employees? This one we know. Yes. It does. Provided they qualify for the benefit as designated in the law.
How much is this going to cost me? Theoretically, it won't. Implementation of the Act is supposed to cost-neutral for the employer. There’s a lot of details we don’t have on how that will actually work, but basically you will do your payroll for the affected individuals and will get a credit on all of your payroll taxes to pay for it. If the amount of the payroll exceeds your tax credit, you will submit this to the Treasury and they will make up the difference. If you don’t have sufficient resources to pay for this payroll, you will be able to submit for an advance as well.
Will this apply to furloughed individuals? We don’t know. Seriously. I can’t even begin to guess.
Does your participation in our Health and Welfare Fund satisfy your obligation under this Act? Unlikely. We don’t know this for certain, but as it stands neither of our funds' short term disability benefits match up with the language of the Emergency Paid Sick Leave act as it stands. Additionally, there was no provision of the Act which mentioned reimbursing the Health and Welfare Fund should they pay out the benefit for you. Again, this is speculation.
Do we have to pay benefits in addition to pay? We aren’t sure. My guess is that it MIGHT require the Health and Welfare contribution, but that’s it. There’s a strong argument that no contract language should apply since no work is being performed. However, there’s some language in both the FMLA and the FESLA federal administrative code which could also make you think that it does require it in certain circumstances. So…I just don’t know. Sorry.
What does regular rate of pay mean? This is another one we don’t know for certain, but the recent DOL Q&A seems to indicate that overtime might be included in determining the number. However, this is countermanded by the existing provisions of the Emergency Sick Leave Act which says the pay is capped at 80 hours. It’s silent on premiums. We will let you know.
That’s it for now. Again, we have LOTS of good information on it already posted, but the really juicy impactful stuff that I know you ACTUALLY want to know just isn’t yet available. So moving on…
What is the WARN Act and do we have to follow it? The WARN Act requires covered employers with more than 100 employees to provide at least 60 days’ advance notice of a mass layoff or plant closing.
A mass layoff means a reduction in force that is not the result of a plant closing and that results in an employment loss at a single site of employment during any 30-day period for (a) at least 33% of the employees and at least 50 employees (excluding part-time employees) or (b) at least 500 employees, excluding part-time employees.
While plant closings have their own rules and may be the cause of our layoffs, our employees do not work for that plant, so those do not seem to apply.
Normally we would absolutely have to abide by this Act, however, there is room for this circumstance to be considered an exemption…but you should still consult a legal professional and at the very least provide notice to the Union just to CYA. Under the WARN Act, an employer may order a plant closing or mass layoff before the conclusion of the 60-day period if the plant closing or mass layoff is caused by (a) business circumstances that were not reasonably foreseeable as of the time notice would have been required or (b) a natural disaster. An employer relying on these exceptions must give as much notice as is practicable (even if after the fact) and must give a brief statement of the basis for reducing the notice period. An unforeseeable business circumstance is caused by some sudden, dramatic and unexpected action or condition outside the employer’s control. Examples of natural disasters include floods, earthquakes, droughts, storms, tidal waves, tsunamis and similar effects of nature. To qualify for the natural disaster exception, the plant closing or mass layoff must be a direct result of a natural disaster. If the plant closing or mass layoff is an indirect result of a natural disaster, the natural disaster exception does not apply, but the unforeseeable business circumstance exception may apply. We are not aware of any cases addressing whether a virus or pandemic constitutes an unforeseeable business circumstance or natural disaster, but based on the definition of unforeseeable business circumstance, it would be reasonable for an employer to take the position that the coronavirus pandemic constitutes an unforeseeable business circumstance.
One issue currently arising due to the coronavirus outbreak is employers being forced to shut down (at least temporarily) due to state or local orders prohibiting or severely limiting the operations of certain types of business. Under such circumstances, employers may assert that the government, not the employer, effectively “ordered” any plant closing or mass layoff that may occur.
Employers should consult with WARN counsel to determine whether the above-described exceptions may apply due to the impact of the coronavirus on business, and also to ensure appropriate notices are provided even if a notice exception can be supported.
In simple terms however, compliance with this law would be prophylactic rather than required right now. You only have to issue this warning to employees if you believe the loss of employment will last longer than 6 months. We don’t know one way or another right now, but can legitimately claim we believe (hope) it won’t. Okay, so that’s enough for tonight. As always, stay safe and don’t hesitate to contact me if you have any questions.