FREQUENTLY ASKED QUESTIONS ABOUT COVID-19 AND THE WORKPLACE—GUIDANCE FOR EMPLOYERS
Last updated: March 26, 2020
Note: Given the rapidly shifting nature of the situation, this article will be updated with relevant information as new developments occur.
March 18, 2020: The federal government enacted the Families First Coronavirus Response Act (FFCRA), which is expected to go into effect no later than April 2, 2020 and be effective through December 31, 2020.
March 19, 2020: Governor Newsom has issued an order for all Californians to stay home, with certain exceptions.
March 26, 2020: The U.S. Senate has passed a $2 trillion stimulus package called the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”). Among things, the CARES Act provides for an expansion of unemployment benefits. The House is expected to pass the bill and the President to sign within the next day or two.
As the United States and the rest of the world take measures to prevent the spread of the novel coronavirus, many people are facing uncertainty and disruption in their lives. In particular, questions about sick leave, working remotely, and other related issues are becoming increasingly common as more and more workplaces adjust business operations. Although most real estate salespersons are independent contractors under California law, real estate brokerage firms and associations may have staff such as administrative assistants and others who are employees. This article aims to provide guidance on California and federal labor and employment issues that may arise as we navigate this public health crisis.
In an effort to stem the transmission of coronavirus, Governor Newsom has issued an order for all Californians to stay at home. What does this mean for my real estate business?
Only essential services are exempt from the order, such as healthcare, banks, transportation, grocery stores, gas stations, and emergency response services. At the moment, real estate businesses and related activities likely do not qualify as “essential,” and therefore it is inadvisable for firms to remain open and to continue in-person activities. However, this does not preclude working remotelyso if you are able to work on transactions at home by filling out forms electronically, having video conferences, etc., you may continue to do so. Some localities, such as Los Angeles, have also issued their own restrictive orders, so please make sure that you are aware of any additional restrictions that may apply to where you live and work. It is important to note that violations of the Governor’s order may be subject to a misdemeanor.
Under California law, most real estate salespersons are independent contractors. What rights and benefits are they entitled to?
Traditionally, independent contractors are not entitled to most of the protections that come with traditional employment, such as paid sick leave, and are not eligible for unemployment benefits. While this means that most real estate salespersons will largely be responsible for themselves during the COVID-19 crisis, there may still be some safety nets in place. For example, California offers an optional Disability Insurance Elective Coverage (DEIC) program for eligible self-employed individuals and independent contractors who want to be covered by disability insurance and paid family leave. If you have enrolled in the DEIC program, you may be eligible to receive benefits if you are unable to work due to being sick or if you are caring for a sick family member. More information about the DEIC program can be found here: https://www.edd.ca.gov/disability/Self-Employed.htm.
On March 18, 2020, the federal government passed the Families First Coronavirus Response Act (FFCRA), which provides independent contractors with two key benefits that they would not have been entitled to under current California law: (1) Under the federal legislation, eligible independent contractors who must self-isolate or are diagnosed with COVID-19 are now able to claim a tax credit for sick leave. Such sick leave also applies to independent contractors caring for a child due to school or childcare provider closures. (2) Similarly, eligible independent contractors who must take leave to care for a seriously ill family member can claim refundable tax credits. The tax credits are refundable and creditable against income and self-employment taxes.
Additionally, on March 25, 2020, the U.S. Senate passed the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”), which is expected to be passed by the House and signed by the President very soon. The CARES Act creates a new Pandemic Unemployment Assistance program (PUA) that expands unemployment benefits to workers, including independent contractors, who are unemployed or partially unemployed as a result of the coronavirus pandemic. The PUA provides eligible workers with an additional $600 per week, through July 31, 2020, on top of the amount of unemployment benefit the worker would be eligible in his or her state. For independent contractors, the $600 would be on top of an amount that is calculated based on prior income.
If an employee is exposed to COVID-19 and/or gets sick, can he or she use paid sick days?
Yes, if the employee meets certain requirements. Under California law, employees who (1) work for the same employer for at least 30 days within a year, and (2) satisfy a 90-day employment period before taking any sick leave are entitled to take at least 3 days of paid sick leave. Several California cities (including Los Angeles, Santa Monica, Berkeley, Emeryville, Oakland, San Diego, and San Francisco) provide for more expansive sick leave. Note that an employee does not need to actually be diagnosed with coronavirus to take paid sick days – for example, an employee can use sick days for preventative care that may include self-quarantine after possible exposure. More information about paid sick leave under California state law can be found here: https://www.dir.ca.gov/dlse/paid_sick_leave.htm.
Under the FFCRA, employers with less than 500 employees must provide employees with two weeks of paid sick leave if the employee is unable to work (or work remotely) because the employee is subject to a quarantine order or has been advised by a health care profession to self-quarantine; the employee is experiencing symptoms of COVID-19; the employee is caring for an individual who is subject to quarantine; or if the employee is caring for a child whose school or childcare providers are closed. Employers subject to this provision of the FFCRA will receive tax credits to offset the cost of providing the paid sick leave.
If an employer already offers 2 weeks of paid sick leave, do they still need to provide the 2 weeks mandated by the FFCRA?
Yes. The FFCRA grants employees 2 weeks of paid sick leave in additionto any sick leave an employee may have accrued. In addition, employers are prohibited from requiring employees to use up their paid time off before using the 2 weeks of sick leave provided by the FFCRA.
What happens if an employee runs out of paid sick days (including, if applicable, the 2 weeks of paid sick leave mandated by the FFCRA)?
An employee who is unable to work due to being sick with, or having been exposed to, COVID-19 may be eligible for disability insurance from the State of California. Disability insurance provides short-term benefits to eligible workers who have full or partial loss of wages due to non-work-related illness. Governor Newsom’s March 12, 2020 Executive Order has waived the usual one-week unpaid waiting period, so eligible workers can collect disability insurance benefits for the first week that they are out of work. More information about filing disability insurance claims can be found here: https://edd.ca.gov/Disability/How_to_File_a_DI_Claim_in_SDI_Online.htm.
What can an employee do if he or she needs to take care of a sick family member?
If an employee needs to take care of a family member who is sick or quarantined, the employee can use paid sick days that he or she has accrued. Additionally, the employee can file a Paid Family Leave claim under California law, which provides up to 6 weeks of benefit payments to eligible workers who have a full or partial loss of wages due to taking time off work to care for an ill family member. For purposes of Paid Family Leave, a “family member” is defined as a child, parent, parent-in-law, grandparent, grandchild, sibling, spouse, or registered domestic partner. More information on filing for Paid Family Leave can be found here: https://edd.ca.gov/Disability/How_to_File_a_PFL_Claim_in_SDI_Online.htm.
Aside from paid leave, the California Family Rights Act (CFRA) and the federal Family and Medical Leave Act (FMLA) both entitle eligible employees to take up to 12 weeks of unpaid leave during a 12-month period to care for ill family members. The FMLA restricts the definition of “family member” to an employee’s spouse, child, or parents, while the CFRA also includes domestic partners and parents-in law. Furthermore, if an employee is unable to work due to caring for a family member who has been diagnosed with COVID-19, the employee may be eligible for the additional $600 unemployment benefit under the PUA.
What if an employee needs to care for a child due to school closures?
If an employee needs to take time off to care for a child because the child’s school has closed, the employee may be eligible for unemployment benefits. To be eligible, the employee must not have any other child care options available and be unable to continue working his or her normal hours remotely. More information about filing for unemployment benefits can be found here: https://edd.ca.gov/Unemployment/Filing_a_Claim.htm.
As part of the FFCRA, the federal government has enacted an emergency expansion of the FMLA. Under this expansion, employees are entitled to up to 12 weeks of paid family leave if they are unable to work (or work remotely) due to their child’s school closure or if another child care provider is unavailable due to COVID-19. The first 10 days of leave may be unpaid, but the employee can choose to use accrued paid time off or other available paid leave if he or so wishes. After the 10-day period, employees are entitled to receive at least 2/3 of their normal pay rate. In addition, employees who are unable to work due to a child’s school closure may qualify for the additional $600 unemployment benefit provided under the PUA.
What are the tax-related benefits offered to employers under the CARES Act?
Employer payroll tax payments will be deferred through the end of 2020. These deferred payments would then be paid over 2 years, in 20201 and 2022.
Additionally, the CARES Act provides for a refundable tax credit against employer payroll taxes for eligible employers that are impacted by the coronavirus (including fully or partially suspending their business due to orders from a governmental authority), but retain their employees. The tax credit would be 50% of eligible employee wages, though the amount of wages that are taken into account for the tax credit will not exceed $10,000 per employee.
Do employees have the right to work remotely?
Usually, no. Currently, there is no federal or California law that gives employees the right to work remotely. However, since Governor Newsom has now issued a statewide stay-at-home order, employers who are not in the 16 exempt sectors explicitly identified in the order should allow their employees to work remotely if possible. If an employer is exempt from the order, there are still specific situations, such as when an employee is immunocompromised, where it would be prudent for the employee and employer to discuss working remotely or other options, as a reasonable accommodation under federal or state disability laws.
Does workers’ compensation apply to remote workers?
Yes. If an employee working remotely sustains a work-related injury, he or she may be eligible for workers’ compensation benefits. More information about workers’ compensation can be found here: https://www.dir.ca.gov/InjuredWorkerGuidebook/InjuredWorkerGuidebook.html.
Can an employer require employees over the age of 65 to refrain from coming to work?
Probably. Restrictions on employees based on age are generally discouraged; however, given that Governor Newsom has requested that individuals over the age of 65 and persons with chronic health conditions self-isolate and has now also ordered all Californians to remain home unless otherwise exempt, requiring employees who fall into this age group to stay home is likely acceptable. Employers can reasonably explain that company policy is to follow government-issued guidelines.
The information contained herein is believed accurate as of March 18, 2020. It is intended to provide general answers to general questions and is not intended as a substitute for individual legal advice. Advice in specific situations may differ depending upon a wide variety of factors. Therefore, readers with specific legal questions should seek the advice of an attorney.
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