03/20/2020
On March 19, 2020, Governor Gavin Newsom issued an unprecedented statewide shelter in-place order, Executive Order N-33-20, requiring Californians, with exceptions, to remain at home or in their place of residence for an indefinite period of time. As a result, many local businesses have reached out with a fairly simple stated question; what now? As you’ll see below, simple questions often have very complicated answers.
The biggest concern that most employers have is the well being and responsibility to their employees. President Donald Trump recently signed the Coronavirus Response Act, which comes into effect on April 2, requiring most employers with fewer than 500 employees to provide two weeks’ worth of hours of paid sick leave if employees are unable to work because of quarantine or isolation. The number of hours depends on the status of the employee. Employers will receive tax credits to offset the cost of providing the paid leave. For those of you who are self-employed, you will also receive a credit. These two weeks of paid leave are capped at $511 per day.
Once the 80 hours of paid sick leave is exhausted, employers then are required to pay up to 12 weeks of paid family and medical leave for any employees up to 12 weeks. Employers are required to pay employees two-thirds of their wages up to $200 per day. Employers will receive a tax credit for this cost as well.
Importantly, employers cannot require employees use any other leave prior to using these emergency leaves. Employers must also post a notice to be prepared by the Secretary of Labor by March 25.
There are exclusions to this mandate to certain health care providers and emergency responders, and the Secretary of Labor has authority to exempt small businesses with fewer than 50 employees if the requirements “would jeopardize the viability of the business as a going concern.” At this point, it is unclear how to apply for the exemption.
While the Coronavirus Response Act may seem relatively straightforward, it becomes incredibly complicated when used in conjunction with Governor Newsom’s executive order. The executive order does not require shelter in-place for all employees; many employers can and will remain open, such as health care providers, construction companies, grocery stores, gas stations, banks, and hardware stores. While theses businesses may have not been closed by the order, there may be circumstances which still trigger the Coronavirus Response Act benefits, including illness, care for family members, and childcare.
In addition to the concern about employees, employers are rightfully concerned about the operation of their business. To that effect, Governor Newsom also exempted from shelter in-place employees with roles to “maintain basic operations”, such as security and payroll.
Please contact me at [email protected] or Collin Bogener at [email protected] if you have questions regarding your specific business and how your business may be effected.