Employment law may be the practice area most affected by Covid-19. In this second part of a multi-part series, Corporate Counsel presents a dialogue between Steve Kardell, name partner in Kardell Law Group in Dallas, who focuses on the plaintiff's side of Covid-19 employment law and, on the management side, Harry Jones, a shareholder in the Dallas office of Littler Mendelson who is a designated Covid-19 expert for the firm.

Harry Jones: Steve, in this discussion, let's focus on new federal and state legislation.

United States HR 748 (the CARES Act)

Harry Jones: So, let's start off with the CARES Act.  This piece of legislation seems to have received the most attention. In a nutshell, what is it?

Steve Kardell:  The CARES Act, or the Coronavirus Aid, Relief, and Economic Security Act, is a $2 trillion economic stimulus bill signed into law in response to the economic fallout of Covid-19.  The CARES Act provides direct economic assistance for American workers and families, small businesses, state and local governments and hospitals/healthcare providers.

With regard to individuals, the CARES Act provides those eligible with a one-time cash payment of $1,200, plus expanded unemployment benefits.

For small businesses, the CARES Act introduces the Paycheck Protection Program (the "PPP"), which provides small businesses with the resources they need to maintain their payroll, hire back employees who may have been laid off, and cover certain overhead costs.

Harry: How has the CARES Act enhanced unemployment benefits?

Steve:  The CARES Act both increases unemployment benefits and expands who is eligible to receive them.  While States will continue to pay unemployment to those who qualify, the Act adds an additional $600 per week from the federal government until the end of July.

The CARES Act also extends unemployment assistance for up to 39 weeks to workers who: (1) are not eligible for other federal or state unemployment insurance or pandemic emergency unemployment compensation; (2) meet certain conditions related to being unemployed, partially unemployed, or unable to work due to COVID-19; (3) are not able to telework, and (4) are not receiving other paid leave.

United States HR 266 (Paycheck Protection Program and Health Care Enhancement Act)

Harry: The CARES Act established the PPP but, about a month later, Congress passed HR 266.  How do these two pieces of legislation differ? 

Steve: HR 266 increases funding to the PPP and extends the authority of the Small Business Administration in its response to COVID-19.  The legislation also provides more funding for hospitals and testing for COVID-19.

United States HR 6201 (Families First Coronavirus Response Act)

Harry: Let's look at some of the less talked-about laws that have been passed in response to the pandemic.  Families First Coronavirus Response Act, or FFCRA, essentially requires certain employers to provide employees with paid sick leave or expanded family and medical leave for specified reasons related to COVID-19. This went into effect at the beginning of April.  What types of benefits does FFCRA guarantee?

Steve:  There are three general categories of paid leave guaranteed by this FFCRA:

1. Two weeks of paid sick leave at the employee's regular rate of pay where the employee is unable to work because the employee is under a mandatory quarantine and/or experiencing COVID-19 symptoms and seeking a medical diagnosis; or
2. Two weeks of paid sick leave at two-thirds the employee's regular rate of pay because the employee is unable to work due to a bona fide need to care for an individual subject to quarantine, or to care for a child whose school or child care provider is closed or unavailable for reasons related to COVID-19, and/or the employee is experiencing a substantially similar condition; and
3. Up to an additional 10 weeks of paid expanded family and medical leave at two-thirds the employee's regular rate of pay where an employee is unable to work due to a bona fide need for leave to care for a child whose school or child care provider is closed or unavailable for reasons related to COVID-19.

Harry: So, FFCRA basically guarantees certain employees that they will be able to take some time to quarantine and/or watch their kids. Who specifically qualifies for this?

Steve: FFCRA promises certain paid leave for employees of covered employers. Covered employers include public employers and private employers with fewer than 500 employees. However, small business owners with fewer than 50 employees may qualify for an exemption from the requirement to provide leave due to school closings or childcare unavailability if the leave requirements would jeopardize the viability of their business.

Harry: FFCRA went into effect in April, but what does it mean long-term? Are these guarantees here to stay?

Steve: FFCRA is only in effect until the end of December 2020, so this isn't changing the landscape of employment law for good.

United States DOL Temporary Rule re Paid Leave Under the FFCRA (29 CFR Part 826)

Harry: In response to FFCRA, the Department of Labor has issued some guidance about who qualifies for the paid leave and what sort of actions must be taken. What are some of the key takeaways from this guidance?

Steve: The DOL has issued two statements; the most significant is that in order to be eligible for the paid leave, the individual may not quarantine subjectively.  Meaning, the quarantine must be pursuant to either a governmental requirement or a recommendation from a medical doctor. Also, it is not enough that the individual has symptoms of COVID-19; he or she must also be seeking medical attention for those symptoms.

Harry: You said there were two statements. Is the second one substantially different?

Steve: The second statement is more of an addendum to the first. It corrects the preamble and certain portions of FFCRA.

United States Department of Labor and IRS Notice of Extension of COBRA Timeframes

Harry: The last significant federal rule comes not from Congress but directly from the DOL. Tell me a little bit about what this does.

Steve: The Department of Labor and the IRS has jointly published a rule that extends both the time frames affecting participants' rights to health care coverage, portability and continuation of group health plan coverage under COBRA, and for plan participants to file benefit claims or appeal denied claims.

Harry: This is a lifesaver for so many Americans who have been laid off due to COVID-19. Can you speak to some of the mechanics of the new rule?

Steve: It extends most COBRA deadlines to beyond the "Outbreak Period," which it defines as March 1, 2020, to 60 days after the end of the declared COVID-19 national emergency, or another date if provided by the agencies in future guidance. If the emergency declaration expires as written on June 29, 2020, the Outbreak Period will end on August 28, 2020, for instance.

New Jersey SB 2374 and SB 2353

Steve: In addition to the federal legislative response to COVID-19, there have been some interesting local responses by state legislators.  What have you seen? 

Harry:  While much of the response to COVID-19 at the state level has come via governors' executive orders, several states also have passed legislation. For example, New Jersey has enacted SB 2374, which amends its Family Leave Act to include situations that can stem from an outbreak like COVID-19, such as the quarantine of a family member or a school closure.  Now employees who must care for family members because of COVID-19 have the option of taking up to 12 weeks of protected leave in a 24-month period.

Steve: That's good news for workers in New Jersey.  Did the State do anything to help out businesses?

Harry: It did.  New Jersey also passed SB 2353, which relaxes employers' requirements under the State's version of the WARN Act.  This legislation amends the definition of "mass layoff" to exclude layoffs due to a national emergency such as COVID-19.  As a result, layoffs as a result of COVID-19 will not trigger an employer's obligations to provide notice and pay severance.

Virginia 16 VAC 25-220

Harry: I understand that at least one state has gone so far as to take employee safety into its own hands, correct? 

Steve: That's right. Because OSHA has failed miserably to enforce its workplace safety standards to mitigate COVID-19 risks to employees, Virginia has taken the bull by the horns and recently adopted the first set of COVID-19-related workplace safety measures.  The "emergency temporary standard" adopted by the State requires employers to implement safety measures to protect their employees.  The measures prohibit employees thought to have COVID-19 from coming to work, require employers to notify employees of possible exposure to the disease within 24 hours, and include rules concerning, among other things, social distancing, PPE (personal protective equipment) and hand-washing.  Employers who violate the safety measures can face financial penalties of up to $130,000.  The new measures also prohibit employers from retaliating against employees who complain publicly about risks at work.

Harry: This sounds like the kind of legislation that may serve as a framework for other states to follow suit.

Steve: Absolutely. In fact, I understand that Oregon expects to have similar rules sometime soon.  If the current administration doesn't step up and vigorously enforce existing workplace safety standards, I expect more states to follow Virginia's lead and create their own temporary emergency standards to protect workers.

Steve Kardell has practiced employment law in Dallas for over 35 years, first on the management side and thereafter representing executives, employees and whistleblowers in significant SOX cases, SEC tip line cases, False Claims cases, and significant local whistleblower cases, such as the massive Dallas County Schools investigation. He has been quoted on whistleblower and executive termination cases in Forbes, Business Week, The Wall Street Journal, The Washington Post, The New York Times and is a frequent contributor to Corporate Counsel and Texas Lawyer. Assistance by KLG SMU summer law clerks Michael Romberg and Emerson Park is hereby gratefully acknowledged.

For almost 30 years, Harry Jones has advised and defended employers, including in dozens of jury trials, and has led more than 90 high-profile investigations on behalf of school districts, cities, colleges and private institutions. He has a specialty in dealing with complex c-suite misconduct issues. Harry has a national and international focus in his practice; he guides general counsel and HR departments through 50-state and complex cross-border issues, particularly in Europe, Africa and Latin America.