Learning Objectives
At the conclusion of this activity, participants will be able to:
- Describe the federal employment legislation signed into law in response to the COVID-19 pandemic.
- Discuss the amendments that have been made to the New Jersey Earned Sick and Safe Leave Law and the New Jersey Family Leave Act in response to the pandemic.
- Discuss employers’ obligations when considering personnel changes during the COVID-19 pandemic.
In order to obtain AMA PRA Category 1 Credit™, participants are required to adhere to the following:
Review the learning objectives at the beginning of the CME article. If these objectives match your individual learning needs, read the article carefully. The estimated time to complete the educational activity is one hour.
After reflecting on the contents of the article, demonstrate your understanding by answering the post-test questions in the online form at www.surveymonkey.com/r/CMESpring2020. These questions have been designed to provide a useful link between the CME article and your everyday practice. The entire form must be completed, including the evaluation section. The post-test cannot be processed if any sections are incomplete. If you are unable to complete the online form, you may request a hard copy by contacting Alysiana Bagwell at 888-355-5551 or ABagwell@mdanj.com.
If a passing score of 80% or more is achieved, a CME certificate awarding AMA PRA Category 1 Credit™ and the test answer key will be mailed to you within 4 weeks. Individuals who fail to attain a passing score will be notified and offered the opportunity to reread the article and submit a new post-test.
All post-tests must be submitted between July 20, 2020, and July 1, 2021. Submissions received after July 1, 2021, will not be processed.
Author: Elizabeth F. Lorell, Esq., Gordon & Rees Scully Mansukhani, LLP, Florham Park, NJ
Article Content Last Updated: This article is adapted from an MDAdvantage podcast with Steve Adubato, PhD, that was recorded on April 9, 2020, with the content updated as of June 18, 2020.
Accreditation Statement: HRET is accredited by the Medical Society of New Jersey to provide continuing medical education for physicians. This enduring article has been planned and implemented in accordance with the accreditation requirements and policies of the Medical Society of New Jersey (MSNJ) and Health Research Education and Trust of New Jersey (HRET) in joint providership with MDAdvantage Insurance Company. HRET is accredited by the Medical Society of New Jersey to provide continuing medical education for physicians.
AMA Credit Designation Statement: HRET designates this enduring activity for 1.0 AMA PRA Category 1 Credits™. Physicians should claim only the credit commensurate with the extent of their participation in the activity.
Disclosure: The content of this activity does not relate to any product of a commercial interest as defined by the ACCME; therefore, there are no relevant financial relationships to disclose. No commercial funding has been accepted for the activity. This article was peer reviewed in accordance with the MDAdvisor Guidelines for Peer Review.
On March 11, 2020, the World Health Organization declared COVID-19 a pandemic, setting off unprecedented global changes directly affecting large and small businesses, employers and employees alike. Never in the last hundred years have we seen travel bans, temporary closures of businesses, crowd restrictions and stay-at-home orders span across metropolitan centers like New Jersey and New York City, and across the United States and the world.
The pandemic is having a dramatic negative impact on the world’s workforce, including healthcare. Many small and even large healthcare providers have faced the unfamiliar challenges of determining whether they are an essential business that could remain open during this public health emergency. In states like New Jersey, medical practices have had to comply with Executive Orders regarding the suspension and resumption of elective and invasive procedures. Medical providers have been considering how and if they can keep their employees safe in their practices, which has been especially challenging during a shortage of personal protective equipment.
The COVID-19 pandemic is confronting employers with unprecedented challenges. In response, the federal and state governments have enacted expansive economic measures to protect employees and employers during this time of crisis.
Federal Employment Legislation
CARES Act
On March 27, 2020, President Trump signed into law the Coronavirus Aid Relief and Economic Security Act, frequently referred to as the CARES Act. This was the third aid package intended to keep businesses and individuals afloat during this unprecedented freeze on the U.S. economy and way of life.
“The CARES Act is a nearly $3 trillion measure aimed at battling the immense economic impact that the pandemic has had in New Jersey and throughout the United States.”
The CARES Act is a nearly $3 trillion measure aimed at battling the immense economic impact that the pandemic has had in New Jersey and throughout the United States. The Act’s main purpose is to boost the economy by providing direct relief to individuals, small business loans, increased unemployment benefits and a wide variety of tax benefits for businesses. The Act also provides a large cash infusion to hospitals and broader access to COVID-19 testing to individuals.
The CARES Act includes the Paycheck Protection Program (PPP), which allows certain small businesses that were in operation as of February 15, 2020, to apply for loans through the U.S. Small Business Administration (SBA). This program makes potentially forgivable loans available to businesses with 500 or fewer employees. Generally, eligible businesses and self-employed individuals are eligible to receive loans up to a maximum loan amount equal to the lesser of $10 million, or 2.5 times the borrower’s average monthly payroll costs over the one-year period preceding the date on which the loan is made.
The loans are attractive, because they contain, among other favorable conditions, a 10-year maturity period, a low interest rate and the waiver of all personal guarantees. In addition, loan proceeds spent on eligible costs may be forgiven under certain conditions. Eligible costs include mortgage interest payments, or certain operational expenses such as rent, utilities and payroll.
“As a result of the pandemic, the country has the highest unemployment rate since the Great Depression.”
The advantage of this program is that the loans are very employer friendly, which is exactly what is needed in the current economic and health crisis that faces many New Jersey employers. As a result of the pandemic, the country has the highest unemployment rate since the Great Depression. However, the fact that the CARES loans are forgivable may literally be the difference between a business remaining open and closing its doors. A word of caution to borrowers: when applying for a PPP Loan, you should ensure your lender is SBA-approved and you comply with the government requirements to be eligible for loan forgiveness. Currently, employers obtaining CARES Act loan proceeds must ensure that they meet the spending requirements, which permit only 40 percent of the loan to be used for non-payroll costs to be eligible for forgiveness. In other words, the government is encouraging all employers to use the lion’s share (60 percent) of the loans to meet the forgiveness eligibility requirements and to continue to pay their employees to avoid them being terminated and filing for unemployment.
Federal Families First Coronavirus Response Act
On April 1, 2020, the Federal Families First Coronavirus Response Act (FFFCR), a temporary relief measure, went into effect through December 31, 2020. It requires that certain employers provide employees with paid sick leave or expanded family and medical leave for specified reasons. If someone has COVID-19 (or is experiencing symptoms), is caring for someone who has COVID-19 or is caring for children whose school has been shut down or otherwise is without childcare, the employee may be entitled to this paid leave at a full or reduced amount, depending on the type of leave taken.
However, there are a number of exceptions under the FFFCR, and an individual’s eligibility for paid leave is contingent on the specific factual situation. For example, small businesses with fewer than 50 employees may be exempt from providing paid leave to employees taking leave to care for their children whose school is closed and/or daycare provider is unavailable, if an authorized officer of the business can demonstrate that the employee’s absence would have a detrimental impact on the business’s viability. A business may apply for an exception from the FFFCR if it can demonstrate the following: (1) providing sick leave or expanded family and medical leave would cause the business’ expenses to exceed available revenue, forcing the business to cease operating at minimum capacity; (2) the employee requesting leave possesses a specialized skill, knowledge or responsibility such that the employee’s absence would result in a “substantial risk to the financial health or operational capabilities” of the business; or (3) the business does not have sufficient workers available or qualified to perform the services provided by the employee(s) requesting leave, and these services are needed to allow the business to operate at a minimum capacity.
There may be other instances in which an employer may not be required to provide paid leave benefits under the FFFCR. For example, the FFFCR permits an employer to exempt “healthcare workers” from receiving paid leave benefits. “Healthcare worker” as defined by the Act includes, but is not limited to, those employed by a doctor’s office, hospital, healthcare center and medical school. Although employers may exempt healthcare workers from these benefits, the U.S. Department of Labor (DOL) cautions that such exemptions should be used “judiciously,” and suggests extending partial benefits rather than a total exemption.
As businesses begin to reopen, some employees may refuse to return to the workplace because they are fearful of catching the virus. To the extent possible, employers should allow employees to work from home. If this is not possible, businesses should try to address employees’ concerns by implementing social distancing and safety precautions to establish and maintain a safe workplace. Although the fear of contracting COVID-19 is not a basis for FFFCR benefits, the individual may have other protected reasons, including a mental health condition, which qualifies as a disability. If the employee has a protected disability, the employee may be entitled to a reasonable accommodation and/or short-term disability benefits. While employers engage in the interactive process with the individual to determine what accommodations can be made for the disability, the employee should be afforded the opportunity to use sick time, personal time, vacation or other paid time off that they may be entitled to.
Websites for Further Information on Employment Law and COVID-19
Federal Law:
U.S. Department of Labor: www.DOL.gov
Federal COVID-19 Help Center: www.Benefits.gov
U.S. Department of the Treasury: www.Home.Treasury.gov
U.S. Small Business Administration: www.SBA.gov
New Jersey Law:
New Jersey Department of Labor and Workforce Development: www.NJ.gov/labor
New Jersey Legislation
Chapter Law 3 of 2020
On March 19, 2020, Governor Murphy signed legislation declaring that healthcare practitioners can provide telemedicine and telehealth services for the duration of the public health emergency. This is a game changer.
In the past, the State of New Jersey did not support telemedicine and telehealth, at least not in the large-scale way being done now. To address the critical medical needs presented because New Jersey was hit hard by the coronavirus pandemic, some regulations related to telemedicine have been lifted. For example, this law waives certain requirements of the Administrative Procedure Act relating to technology and privacy requirements for facilitating telemedicine and telehealth during the state of emergency.
Executive Order No. 122
“Employers of [non-essential] businesses must provide masks and gloves to their employees.”
On April 10, 2020, Executive Order No. 122 was signed into law by Governor Murphy, imposing additional mitigation requirements on essential retail businesses and industries to limit the spread of the virus in New Jersey. This law requires that anyone who works in an essential business or anyone who is visiting an essential business or medical facility wear a face mask, with certain limited exceptions. Recently, Executive Order No. 150 expanded those requirements for those visiting non-essential businesses. Employers of such businesses must provide masks and gloves to their employees. The Governor’s orders are intended to protect residents as well as the people on the frontlines who are going to work every day to serve New Jersey citizens—including those in pharmacies and in the healthcare industry.
Amended New Jersey Earned Sick and Safe Leave Law
Employees who cannot work due to COVID-19 may choose to utilize their accrued sick leave. This means that when an employee cannot work because the State has declared a public health emergency, the employee has been directed by a healthcare provider to self-isolate or quarantine because the employee’s presence in the workplace may jeopardize others, or the employee is caring for a sick family member or children whose school or childcare provider is closed, the employee may use sick leave that they have accrued in their work benefits’ account.
Amended New Jersey Family Leave Act
Eligible employees are normally entitled to up to 12 weeks of unpaid leave to care for a family member with a serious health condition. In response to COVID-19, the New Jersey Legislature amended the New Jersey Family Leave Act (NJFLA) to expand its coverage to employees seeking leave to care for a family member in mandatory or voluntary quarantine, and to care for children where childcare is unavailable or schools or closed due to the pandemic.
Thus, when an employee’s family member is sick, or must quarantine or isolate due to suspected exposure to a communicable disease, such as COVID-19, or the employee’s children are home from school due to COVID-19-related closures, that person may be entitled to take unpaid time off from work under the NJFLA.
Amended New Jersey Temporary Disability Benefits Law
New Jersey’s Temporary Disability Benefits Law was amended during this public health emergency to expand the definition of an employee’s own “disability” to include, among others, “an illness caused by an epidemic of a communicable disease,” such as COVID-19, or a “known or suspected exposure” to same. Eligibility for New Jersey Short-Term Disability Benefits is determined by the Department of Labor based on the information provided by the employee regarding the employee’s medical condition and the limitations it imposes on the ability to work. As part of the process, employers are obligated to provide employees who may be eligible for benefits with the requisite information and forms to apply for benefits and to complete requests for information the employer receives from the Department of Labor about the employee’s last day of work and compensation. Employers who discourage employees from receiving benefits, or who take adverse actions against employees receiving benefits, can be held liable under certain circumstances for retaliating against employees. Therefore, employers should encourage employees to inquire with the State about their potential eligibility for temporary disability benefits, and provide temporary disability applications and/or the New Jersey Department of Labor, Division of Temporary Disability and Family Leave Insurance website information (myLeaveBenefits.nj.gov) to all employees who may qualify.
Facing Tough Lay-off Decisions
If employers wholesale send home all employees and stop paying them because the employers are closing the worksite for lack of business, or because they’ve been required to close pursuant to a federal, state or local directive, the employees should be encouraged to apply for unemployment benefits.
For employers who remain in business, there are no easy answers when deciding which employees to keep on the payroll and which ones to furlough or terminate. It is important that employers make these decisions based on legitimate business reasons and avoid criteria that may subject the business to claims for discrimination or wrongful termination, based on age, disability or gender. For example, employers must avoid making any employment decisions that may have a disparate impact on older employees or employees with disabilities or perceived disabilities. Instead, employment-related determinations should be strictly performance-based. Employers may want to begin their selection process by asking themselves which employees perform tasks that are critical to the continued operations of the business and which employees have a proven performance record of satisfying the business’ expectations and helping the company succeed. Although employers may want to consider seniority in making these tough decisions, it is important to keep in mind that the “last in” person might be the best employee, and the “first in” may be the worst. (Of course, if a labor or other employment-related contract requires it, seniority rules must be followed.) The economic realities are that when we all physically return to work, most workplaces will likely be doing as much, if not more, with less manpower. For this reason, employers should seek to retain their high-performing employees who are skilled and experienced in various areas.
No one thought that in the spring of 2020 tens of millions of the world’s population, including nine million New Jersey residents, would have been under home lockdown orders for months. That alone has changed the way employers and employees will live their personal lives and work in the future. Employers will need to meet the challenges of implementing any additional protective measures that may be required of them. Even when the pandemic is behind us, we will not return to business as usual. The business models that are taking shape to deal with this crisis will change the way we do business for years to come. For example, there will be a huge push by employers and employees in multiple industries, whether blue collar or white collar, to telecommute. This will allow employers to save overhead on real estate space, expand the employee talent pool beyond a traditional local geographic vicinity, save employees’ time by minimizing commutes to work and allow much more flexibility in work hours.
Because employees have been terminated, and New Jersey faces record unemployment, there will be an uptick in litigation. Some employees who were terminated will not be asked back, and some will file lawsuits against their former employers if they are unable to secure a new position. Given the breadth of state and federal laws, former employees will more easily be able to craft legal claims challenging the termination of their employment—despite the difficult situation all employers experienced as a result of the global pandemic. For this reason, it is imperative that employers document the objective criteria relied on in selecting which employees to furlough and terminate. This documentation will become critical in defending the business’s decision in a lawsuit.
Fortunately, there is also a silver lining in the employment world after the pandemic. COVID-19 has spurred a new sense of appreciation for having a job, having an income, engaging with work colleagues, doing a good job and having a sense of purpose. Employers will be more appreciative of good employees and customers. Employees will be more grateful for having a good job (and the benefits that go with it).
Americans are resilient. With the enormous federal and state financial assistance being given to the American workforce throughout the country, and based on the tireless and talented efforts of our healthcare workers in combatting COVID-19, we will overcome the financial losses and emerge from this health crisis—stronger together.
Now, let’s get back to work.
