PB&L Webinar presented on March 23, 2020

1. parsonsbehle.com
FAMILIES FIRST CORONOVIRUS REPONSE ACT:
WHAT IT DOES AND HOW TO RESPOND
March 23, 2020

2. 2
Webinar Format
 All Lines Muted
 Please Use Chat Function to Submit Questions
 Webinar Will Be Recorded
 Slides Will Be Shared With All Participants

3. 3
Presenters
Sean Monson
FMLA Amendments
Susan Motschiedler
Sick Leave Under
Response Act
Ross Keogh
Tax Credits Under
Response Act
Christina Jepson
Terminations in the COVID-19 Crisis:
WARN Act and Other Considerations
Mark Wagner
Q&A

4. 4
Presenter Contact Information
 Sean Monson – SMonson@parsonsbehle.com
 Susan Motschiedler – SMotschiedler@parsonsbehle.com
 Ross Keogh – RKeogh@parsonsbehle.com
 Christina Jepson – CJepson@parsonsbehle.com
 Mark Wagner – MWagner@parsonsbehle.com

5. 5
The slides contained herein and the content they contain are for
informational purposes only and not for the purpose of providing legal
advice. You should not rely on the information contained herein without
seeking the advice of an attorney. Reviewing or receiving these slides
does not create an attorney client relationship between you and
Parsons Behle & Latimer. For any particular legal issue or problem,
you should contact an attorney directly to obtain legal advice.
Disclaimer

6. FMLA Amendments
Sean A. Monson

7. 7
“Regular” FMLA Leave “COVID – 19” FMLA Leave
Employers
Covered
Employers who employ 50 or more
employees within a 75 mile radius
Employers who employ fewer than 500
employees – regulations may exempt
employers who employ 50 or fewer
employees – regulations to come out on April
2, 2020, the day the law goes into effect
Eligible
Employees
Worked for 1,250 hours during the previous
12 months
Worked for 30 days
Potential exception for employees who are
health care providers and first responders
Triggering
Events
Birth or adoption of child
Serious health condition of employee
Serious health condition of family member
Serious health condition = overnight
hospitalization or 3 days incapacitated
requiring visits with doctor and follow up care
“[E]mployee is unable to work (or telework)
due to a need for leave to care for [a] son or
daughter under 18 years of age of such
employee if the school or place of care has
been closed, or the child care provider of
such son or daughter is unavailable, due to a
public health emergency.”
A “public health emergency” means an
emergency with respect to COVID – 19
declared by a Federal, State or local
authority.

8. 8
“Regular” FMLA Leave “COVID – 19” FMLA Leave
Benefits Up to 12 weeks of unpaid leave
10 days of unpaid leave
2/3 of employee’s regular rate of pay up
through the end of a 12 week period
Calculated based on “the number of hours
the employee would normally be scheduled
to work”
If the employee’s hours vary week to week,
calculate an average based on prior 6
months
Capped at $200 a day or $10,000 in the
aggregate per employee
PTO During
Leave
Employer can force employee to use accrued
PTO during leave period
Employee can elect to use PTO during any
part of leave period but cannot be forced to
do so by the employer

9. Thank you
Sean A. Monson
801.536.6714
smonson@parsonsbehle.com

10. Sick Leave Under Response Act
Susan Baird Motschiedler

11. 11
Response Act Sick Leave
Emergency Paid Sick Leave:
 Applies to Employers with 500 or fewer employees.
 Entitlement Begins April 2, 2020 and Ends December 31, 2020.
 Department of Labor has authority to
o Exempt small businesses with fewer than 50 employees if Sick Leave benefits
would “jeopardize the viability of the business as a going concern;”
o Exclude health care providers and emergency responders from the definition of
“employers” under the Response Act.
 The Response Act permits employers of health care providers and
emergency responders to opt out if the Secretary does not issue
regulations excluding them.

12. 12
Employee Eligibility
 Full and Part Time Employees are Eligible
 Applies to Full and Part Time Employees Unable to Work
(Including Telework) Because They:
o Are in a federal, state or local quarantine order related to COVID-
19
o Have been advised by a health care provider to self-quarantine
due to COVID-19 concerns
o Are experiencing symptoms of COVID-19
OR

13. 13
Employee Eligibility
o Are caring for someone who:
• is subject to a federal, state or local quarantine order related to COVID-19, or
• has been advised by a health care provider to self-quarantine due to COVID-
19 concerns
o Are caring for the employee’s child if the child’s school or care has
been closed or the child’s care provider is unavailable due to
COVID-19 concerns, or
o Are experiencing “any other substantially similar condition”
specified by the Secretary of Health and Human Services in
consultation with the Secretary of the Treasury and the Secretary
of Labor

14. 14
Sick Leave Benefit Amount
 Hours of Paid Leave Vary by Full- or Part- Time:
o Full-time employees are entitled to up to 80 hours of pay.
o Part-time employees are entitled to the average number of hours
the employee works over a two-week period.
o Payments to part-time employees who work variable schedules
week-to-week will be based on a six-month average or, for
employees who did not work the prior six-month period, based on
the employee’s reasonable expectation of average hours upon hire

15. 15
Sick Leave Benefit Amount
 Amount of Paid Leave Varies:
o Employees who are themselves sick and are quarantined are
entitled to 100 percent of the regular rate of pay they would have
earned for working normally-scheduled hours up to 80 hours and is
capped at $511 a day and $5,100 in the aggregate.
o Employees who are caring for another qualified person are entitled
to two-thirds of the regular rate of pay they would have earned for
working normally scheduled hours, capped at $200 a day and
$2,000 in the aggregate.

16. 16
Sick Leave Benefit Amount
 Amount Under Multi-Employer Bargaining Agreements:
o An individual employer who is a signatory to a multi-employer
bargaining agreement may, consistent with such agreement, fulfill
sick-pay obligations by making contributions to a multi-employer
fund, plan or program based on the number of hours worked by the
employee for the individual employer.

17. 17
Miscellaneous Provisions
 Employees seeking sick time benefits under the Response Act need not
find a replacement to cover the missed hours.
 Employers may not require that employees use any other paid leave
provided by the employers before using the Sick Leave required by the
Response Act.
 Sick Leave does not roll over at the end of this year and is not payable
on termination of employment.
 Employers must post a notice of rights under the Response Act.
 The Response Act provides for penalties under the Fair Labor Standards
Act for noncompliance.
 There is a 30-day enforcement grace period, during which time the
Department of Labor will offer guidance

18. Thank you
Susan Baird Motschiedler
801.536.6923
smotschiedler@parsonsbehle.com

19. Tax Credits Under Response Act
Ross P. Keogh

20. 20
The Tax Credits in General
Four separate tax credits for paid leave provided under the
Response Act starting April 2, 2020:
 Paid Sick Leave, § 7001
o $200 (for care of others)/$511(quarantine) per day limitation per employee.
o 10 days/80 hour per employee cap.
 Paid Sick Leave for self-employed individuals, § 7002
o Same limits as § 7001.
o Also limited by the employee’s average daily self-employment
income (“ADSEI”), which is the employee’s net earnings from self-employment
for the individual for the taxable year divided by 260.

21. 21
The Tax Credits in General
 FMLA Leave, § 7003
o $200 per day and $10,000 maximum per employee
 FMLA Leave for self-employed individuals, § 7004
o Limited to 50 days and $200 per day or 67% of ADSEI

22. 22
Additional Details on the Tax Credit
 Public employers are not eligible for either credit.
 All payments are exempt from social security and Medicare withholdings
by employee and employer.
 Additional limitation for self-employed at 67% of ADSEI.
 For the § 7002 credit (paid sick leave) self-employed individuals must be
“unable to perform services in any trade or business” (emphasis added)
 An employer that has a qualified health plan can offset properly
allocated expenses caused by the Response Act to that plan and take
either credit.
 Expect Treasury to take significant latitude in interpreting and applying
the rule.

23. 23
How Employers Get the Credit
Treasury issued a news release on Friday, IR-2020-57, outlining
what forthcoming “guidance”—to be issued this week—will look like.
 Employer’s will be able to take the credit to offset the following mandatory
payroll contributions:
o The Employer’s side of Social Security and Medicare
o The Employee’s side of Social Security and Medicare
o The Employee’s federal tax withholdings.
 Employers will also be able to request accelerated payment presumably
starting next week (3/30) and these requests are to be processed in less than
two weeks.
 The credits are refundable.

24. 24
Numbers / Analysis
 The $511 per day credit is calibrated on the 2019 social security wage
base--$132,900.
 Social Security is 6.2% and Medicare is 1.45% for each side, or 15.3%
total. Withholdings are 10-40%.
 Employers that expect to have more than 1/3 of their workforce
subject to creditable leave would need accelerated payments for
normal liquidity.
 Employer will make a reduced withholding payment (either monthly or
semiweekly) and then clean up with form 941—Q2 due July 31.
 Self-employed individuals will get the credits on their 1040, and can
adjust estimated payments.

25. Thank you
Ross P. Keogh
406.206.9710
rkeogh@parsonsbehle.com

26. Terminations in the COVID-19 Crisis:
WARN Act and Other Considerations
Christina M. Jepson

27. 27
WARN Act
 The Worker Adjustment and Retraining Notification Act
(WARN Act), 29 USC Section 2101-2109 requires 60 days
notice of a reduction in force in certain circumstances
o Applies to large companies
o Applies to large reductions
o Exceptions that may apply now

28. 28
WARN Act – Employers Affected
Only applies to large employers
o 100 or more full time employees (employees who work
an average of 20 or more hours per week) or
o 100 or more employees (including part time employees)
who in the aggregate work at least 4,000 hours per week
Counting employees can be tricky—If you are close
consult with counsel

29. 29
WARN Act – Reductions At Issue
Only applies to large reductions in force, two kinds
o A “plant closing” or
o A “mass layoff”

30. 30
WARN Act – Plant Closing
 “Plant closing” is a permanent or temporary shutdown in
which at least 50 employees experience an “employment
loss”
 A permanent or temporary shutdown of
o Single employment site
o Operating unit
o Facility

31. 31
WARN Act – Mass Layoff
 A “mass layoff” is a RIF in which
o At least 500 employees at a single job site experience an
“employment loss” or
o 50 to 499 employees experience an “employment loss” if they
makeup at least one-third of the employer’s work force
 If less than 50 employees experience an employment loss,
then it is not a “mass layoff”

32. 32
WARN Act – Employment Loss
 What is an “employment loss”
o An employment termination other than a discharge for cause,
voluntary department, or retirement or
o A layoff (not termination) exceeding 6 consecutive months or
o A reduction in hours of more than 50% during each month of any
6-month period

33. 33
WARN Act – Series of RIFS
 The WARN Act has a 90-day look back and look-forward
provision
o Even if you terminate smaller groups of employees in a series of
terminations, the WARN Act could be eventually triggered
o You must aggregate the number of employees affected by plant
closings or mass layoffs in a 90-day period by looking 90 days
back and 90 days ahead from the expected date the employment
losses will occur to take into account both planned and completed
employment losses
o The math can be tricky--consult counsel

34. 34
WARN Act – Notice Requirements
 What must a company do if the WARN Act is triggered?
o The employer must give written notice at least 60 days in advance
of the plant closing or mass layoff to:
• The union representative of each affected employee (if applicable);
• Each affected employee not represented by a union;
• The state dislocated worker unit or office;
• The chief elected official of the unit of local government where the layoff or
plant closing will occur; and
• The federal government if foreign nationals working on certain visas are laid
off. Consult immigration experts whenever foreign nationals on visas are
affected by a reduction in force.
 29 U.S.C. § 2102(a); 20 C.F.R. § 639.6.

35. 35
WARN – Violations
 An employer that violates the WARN Act's notice
requirements is liable to each qualifying employee for:
o Back pay for each day of the violation, at the higher of the average
regular rate received during the last three years of employment or
the final regular rate received;
o Benefits under an employee benefit plan, including the cost of
medical expenses incurred during the employment loss that would
have been covered if the closure or layoff had not occurred; and
o Attorney fees

36. 36
WARN – Violations
 An employer that fails to provide the requisite notice to the
unit of local government is subject to a civil penalty of up to
$500 for each day of violation, unless the employer satisfies
its liability to employees by paying them within three weeks
after the closing or layoff.
 29 U.S.C. § 2104.

37. 37
WARN – COVID-19 Shutdown
 Strong argument that the WARN Act would not apply
because the employer would have no choice and no
opportunity to give the required notice
 The WARN Act applies only if the employer takes action to
cause a triggering employment loss
 However, an employer should still give as much notice as
possible

38. 38
WARN – Exceptions
 The length of the 60-day notice period can be reduced in
three exceptional circumstances involving:
o A faltering company
o An unforeseeable business circumstances
o A natural disaster

39. 39
WARN – Unforeseeable Business
Circumstances Exception
 The WARN Act allows employers to order a plant closing or mass
layoff before the conclusion of the 60-day warning period where the
closing or layoff “is caused by business circumstances that were not
reasonably foreseeable as of the time that notice would have been
required.” 29 U.S.C. § 2102(b)(2)(A).
 “Caused by some sudden, dramatic, and unexpected action or
condition outside the employer’s control.’” 20 C.F.R. § 639.9(b)(1))
 Employer must still “give as much notice as is practicable and at that
time shall give a brief statement of the basis for reducing the
notification period.” 29 U.S.C. § 2102(b)(3); 20 C.F.R. § 639.9.

40. 40
WARN – Unforeseeable Business
Circumstances Exception
 Examples of potentially qualifying circumstances include a
o Principal client’s sudden and unexpected termination of a major
contract with the employer
o An unanticipated and dramatic major economic downturn
o A government ordered closing of an employment site that occurs
without prior notice
o 20 C.F.R. § 639.9(b)(1)
o Consult with counsel

41. 41
WARN – Unforeseeable Business
Circumstances Exception
 If an employer’s initial layoff is less than 6 months, but
extends to beyond six months, there is a special notice
reduction rule for extensions of layoffs that are the result of
a business circumstance that was not reasonably
foreseeable at the time the initial layoff commenced
 If that special rule applies, the employer can provide
shortened notice at the time the need for the extension
became reasonably foreseeable and avoid WARN Act
liability altogether. 20 C.F.R. § 639.4(b).

42. 42
WARN – Natural Disaster Exception
 The WARN Act also does not require 60-days’ notice for employment
losses that are the direct result of “natural disasters”
 Defined as “floods, earthquakes, droughts, storms, tidal waves or
tsunamis, and similar effects of nature.”
 Employer is required to provide as much notice as is practicable,
containing as much of the required information as is available in the
circumstances of the disaster, whether in advance or after the fact
 There is a strong argument that the COVID-19 pandemic qualifies as
a “natural disaster” if it forces a plant closing or mass layoff

43. 43
What if WARN Does Not Apply?
 There other laws that may apply
 Some states have mini-WARN statutes or other layoff
statutes that provide additional requirements on employers
 Some states with mini-WARN statutes—California,
Connecticut, D.C., Georgia, Hawaii, Illinois, Iowa, Maine,
New Hampshire, New Jersey, New York, Tennessee,
Vermont, Wisconsin
 However, in these times you literally need to check
everyday and consult with counsel

44. 44
Other Issues
 Even if Warn does not apply and mini-Warn does not apply
there are several issues you must address in such a RIF.
o Ensure that the process is not discriminatory and does not have a discriminatory
impact, if avoidable
o Minimize the risk of a claim of discrimination from one of the terminated
employees
o Form a diverse committee to choose who is selected for layoff and ensure that
the workers selected are selected based on objective criteria and not for
discriminatory reasons—DOCUMENT THE PROCESS
o Once the employees are selected, you need to analyze the group for
discriminatory impact
o Work with your outside or in-house legal counsel to analyze these issues

45. 45
Other Issues
 Determine if any of the affected employees have engaged in
any activities protected under state or federal law,
o Harassment or discrimination complaints
o Notifying OSHA of a perceived health or safety violation,
o Workers’ compensation claim
o FMLA claims, ADA issues, and other health issues
 Consult with legal counsel before making any final
determinations

46. 46
Other Issues
 Determine if any of the employees who are being
considered for the RIF have employment agreements that
may impact their terminations
o Guaranteed terms of employment
o For cause
o Provisions for specific severance
 Collective bargaining agreement
 If you provide severance, use legally compliant severance
release agreements

47. 47
Other Issues
 Determine if the terminated employees are entitled to any
other pay and benefits
o Company severance plan
o Pay out of accrued time off—look at your polices and state law
o State laws may also mandate when you must pay terminated
employees
o COBRA notices

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Other Issues
 Benefits you may not be obligated to provide but may want
to provide
o Contact information for unemployment and other assistance
programs
o Counseling
o Information meetings (virtual)

49. Thank you and be safe
Christina M. Jepson
801.536.6820
cjepson@parsonsbehle.com

50. Questions and Answers
Mark A. Wagner

51. 51
The slides contained herein and the content they contain are for
informational purposes only and not for the purpose of providing legal
advice. You should not rely on the information contained herein without
seeking the advice of an attorney. Reviewing or receiving these slides
does not create an attorney client relationship between you and
Parsons Behle & Latimer. For any particular legal issue or problem,
you should contact an attorney directly to obtain legal advice.
Disclaimer

52. Thank you
Mark A. Wagner
801.536.6776
mwagner@parsonsbehle.com