Information contained in this publication is intended for informational purposes only and does not constitute legal advice or opinion, nor is it a substitute for the professional judgment of an attorney.
Updated: April 5, 2020
The U.S. response to the COVID-19 outbreak has included rapid and dramatic changes in local, state and federal employment laws. Some New York employers are struggling to understand the new paid leave laws while others are facing the decision to conduct mass layoffs. This article will provide New York employers with a roadmap of important new COVID-19 developments, including how to determine whether their business operations qualify as “essential,” how to respond when their employees need sick leave for themselves or family members, and how to restructure their workforce amid a landscape of changing requirements.
Which New York Businesses are “Essential”?
As of March 22, 2019, the “New York State on Pause” Executive Order directed all New York “non-essential” businesses to cease in-office personnel functions and “utilize to the maximum extent possible, any telecommuting or work from home procedures that they can safely utilize.” In a series of Executive Orders, the state has carved out 12 categories of “essential businesses” that are exempt from the in-person restrictions and may continue to operate on-site. New York employers can find the updated comprehensive list of essential businesses here.
If a New York employer believes its work is essential but not specifically listed as such, it may complete a one-page application requesting that the state designate it as essential. An employer should apply only if it believes “it is in the best interests of New York State to have [its] business’s workforce continue at full capacity in order to properly respond to the COVID-19 emergency.”
Employers (and employees) who may be tempted to ignore the governor’s executive order and continue in-office work should remember that this order comes with penalties. Local police and fire personnel have been tasked with visiting worksites to monitor compliance. Failure to comply could lead to civil penalties of up to $2,000 per violation ($5,000 for repeat offenders) and injunctive relief. The governor promises enforcement in successive continuations of his order and New York Attorney General Letitia James encourages workers to file complaints against their employer for not complying with the governor’s directives.
Employers, whether essential or not, may want to consider implementing new policies, such as a telecommuting/remote work policy, a policy on potential exposure to COVID-19, a telecommuting equipment assignment and usage policy, protocols around proprietary and confidential information, and/or privacy policies depending on the nature of the work the employee is conducting at home.
New York Employees Who Are Sick
New York COVID-19 Sick Leave Law
On March 18, 2020, New York adopted new legislation that provides New York employees with paid sick leave in response to the COVID-19 outbreak.1 This law applies to all employers with any employees in New York. An employee is eligible for paid time off if they present to their employer a “mandatory or precautionary order of quarantine or isolation.” Such an order (a "COVID-19 Order") is one issued by the “state of New York, the department of health, local board of health, or any government entity duly authorized to issue such order due to COVID-19.” The New York State Department of Health has issued guidance to confirm that only those employees who have been exposed to COVID-19 in some fashion, or traveled to a high-risk area, will be allowed leave under the law.
An employee will receive a COVID-19 Order if their health care provider notifies the infection control personnel at New York State or a local health department that the employee is a “Patient Under Investigation” for COVID-19. This may be due to the employee’s own condition or that of a member of the employee’s household. The local health department then issues an order of quarantine after receiving this notification.2 Importantly, if an employee has received only a quarantine or isolation recommendation from their own health care provider, but not a quarantine or isolation order from the health department, this leave is not available.
Leave benefits available to the employee depend on the size and net income of their employer. For example, businesses with 11-99 employees as of 1/1/2020 that had a net annual income greater than $1 million last year must provide employees with job protection for the duration of the order of quarantine or isolation and at least five (5) days of paid sick leave. See table, below, for further details.
Employer Size (nationally) as of January 1, 2020
10 or fewer employees and a net income of less than or equal to $1 million
Unpaid job protection for the duration of a mandatory or precautionary order of quarantine or isolation
10 or fewer employees and a net income greater than $1 million
Employers with 11 to 99 employees irrespective of net income
At least 5 calendar days of paid sick leave (with the rest unpaid) and job protection for the duration of a mandatory or precautionary order of quarantine or isolation
Employers with 100 or more employees irrespective of income
All public employers (regardless of number of employees)
At least 14 calendar days of paid sick leave (with the rest unpaid) and job protection for the duration of a mandatory or precautionary order of quarantine or isolation
Employers must provide this leave in addition to any other accrued leave (e.g., New York City Earned Sick and Safe Time Act or Westchester County Earned Sick and Safe Time). Although the COVID-19 Sick Leave Law does not contain a specific notice requirement itself, the state has issued guidance advising that employers let their employees know “that these benefits are available to them, should they, or their minor dependent child, be subject to a mandatory or precautionary order of quarantine or isolation.”
The employee is entitled to job-protected leave for the full duration of the COVID-19 Order. Once the employee has exhausted the paid Leave Entitlement provided by their employer, they may also be eligible for leave benefits in accordance with the New York Paid Family Leave Benefits Law (PFLBL) if the employee either remains subject to a COVID-19 Order or needs to provide care for a minor dependent child who is subject to a COVID-19 Order. Additionally, an employee whose health has been impacted by COVID-19 may be eligible for disability benefits administered by the State of New York. Furthermore, employees who are caring for a family member suffering from a serious health condition, including being afflicted by COVID-19, may also be eligible for PFLBL under the “Family Care” provision.3
To apply for these benefits, the employee must submit to the employer’s insurance carrier (1) the COVID specific application (Request for COVID-19 Quarantine DB/PFL – Self (Forms PFL-1 & SCOVID19) or Request for COVID-19 Quarantine PFL - Child (Forms PFL-1 & CCOVID19) and (2) the COVID-19 Order. Each Request includes two forms, which have sections to be completed by the employee and the employer. Specifically, the employer must (1) provide the employee’s average weekly wage (averaged from the eight weeks prior to the start of Paid Family Leave), and (2) must attest that the employee has used any quarantine paid sick time and is not able to work remotely. The employer must complete and return their forms to the employee within three business days.
The employee is responsible for submitting their completed Request directly to the employer’s Paid Family Leave/Disability Leave insurance carrier within 30 days of their first day of NYPFL leave. The insurance carrier must pay or deny the employee’s request within 18 calendar days of receiving the completed request.
Exceptions to the Law
An employee is not eligible for the leave benefit if the employee is both (1) still physically able to work while under a mandatory or precautionary quarantine or isolation order, through “remote access or similar means”; and (2) either deemed asymptomatic, or not yet diagnosed with any medical condition. The leave is only available during a period when the employee is not able to work.
Additionally, employees are not eligible for the leave benefit if: (1) they returned from traveling to a country for which the Center for Disease Control and Prevention has issued a level 2 or 3 travel health notice;4 (2) that travel was taken for personal reasons and not at the direction of the employer; and (3) the employee was provided notice of the travel health notice and notice of the limitations contained in the new law prior to travel. This exception does not impact an employee’s right to take accrued leave provided by their employer, or unpaid leave for the duration of the order of mandatory or precautionary quarantine or isolation.
Importantly, this New York COVID-19 sick leave is not available to the employee if leave is available under federal law as described below. In other words, the employee receives the benefit of whichever law is more generous to the employee, but not both. However, given that the federal law does not apply to employers with more than 500 employees in the U.S., New York law will automatically apply to these employers. Therefore, employers who are operating in New York and have more than 500 employees should plan to provide at least 14 days of paid sick leave and guaranteed job protection for the duration of an official COVID-19 Order.
Intersection with Federal Law – Families First Coronavirus Response Act (FFCRA)5: Employee Paid Leave Rights6
The FFCRA applies to employers with 499 or fewer employees.7 It goes into effect on April 1, 2020,8 and sunsets on December 31, 2020.9 Employers should count the number of employees at the time the employee asks for leave to assess whether the employer meets the 500-employee threshold. Employers should include all employees on its payroll including part-time, temporary, seasonal employees and employees on a leave status. Note that employees on furlough are not entitled to FFCRA benefits, but should be included when assessing employee count. Independent contractors should not be included in the employee count.
There are two main components of this federal law:
- First, the Emergency Family Medical Leave Expansion Act amends the federal Family and Medical Leave Act (FMLA). It provides up to 12 weeks of job-protected leave to an employee if the employee is unable to work (or telework) due to a need to care for a minor child if the child’s school or place of child care has been closed or is unavailable due to a public health emergency. Employees are eligible for the leave after only 30 days of employment with the employer.
The first 10 days of the employee’s 12 weeks of leave are unpaid10 and the remainder, if it is needed, must be paid at two-thirds of the employee’s pay with a cap of $200 per day and $10,000 in the aggregate.
- Second, the Emergency Paid Sick Leave Act provides two weeks (or 80 hours) of leave if one of the below requirements is met.11 This leave is available on the employee’s first day of employment and the employer may not ask the employee to take other forms of paid time off prior to utilizing this emergency leave.
Circumstances that trigger this emergency paid leave:
- the employee is subject to a federal, state, or local quarantine or isolation order related to COVID-19;
- the employee has been advised by a health care provider to self-quarantine because of COVID-19;
- the employee is experiencing symptoms of COVID-19 and is seeking a medical diagnosis;
- the employee is caring for an individual subject or advised to quarantine or isolation;
- the employee is caring for a son or daughter whose school or place of care is closed, or child care provider is unavailable, due to COVID-19 precautions; or
- the employee is experiencing substantially similar conditions as specified by the Secretary of Health and Human Services, in consultation with the Secretaries of Labor and Treasury.
The law limits this paid leave to $511 per day ($5,110 in the aggregate) where leave is taken for reasons (1), (2), and (3) noted above (generally, an employee’s own illness or quarantine); and $200 per day ($2,000 in the aggregate) where leave is taken for reasons (4), (5), or (6) (care for others or school closures).
Lastly, all covered employers must post the Mandatory Notice in their workplace explaining FFCRA leave rights. Where the physical workplace is closed due to executive order or other restrictions, the Department of Labor recommends posting this notice on an intranet or by email to employees.
New York City’s Earned Safe and Sick Leave Law12
Employers should not forget other New York leave laws that COVID-19 may trigger. Under New York City’s Earned Sick and Safe Time Act (ESSTA), employees (including full-time, part-time, temporary, on-call, and undocumented employees) of any size business or nonprofit employer in New York City can receive up to 40 hours (five calendar days) of sick leave each calendar year. Employers with five or more employees must provide this as paid sick leave. Employers with fewer than five employees may provide this as unpaid leave.
In relevant part, employees can use ESSTA sick leave when:
- a public official closes the business temporarily due to a public health emergency;
- a public official closes their child’s school or child care provider due to a public health emergency;
- the employee themselves (or a family member) feels ill or shows symptoms of COVID-19; gets tested for the flu or COVID-19; is under quarantine or is self-isolating for preventative purposes; or is caring for a family member under a mandatory or precautionary order of quarantine.
Employers cannot require medical documentation from employees unless they have been absent for more than three consecutive days. However, practically speaking, employers should bear in mind that it may be difficult for employees to see a doctor during the current crisis so requiring such documentation may prove infeasible.
Importantly, the Department of Consumer and Worker Protection encourages employers to allow employees additional leave “as needed” for sickness, quarantine, or for other uses related to COVID-19. Any additional leave can be provided paid or unpaid. Access to the full guidance is available here.
Restructuring or Reducing the Workforce in New York
Layoff vs. Furlough
In addition to many of the other concerns employers are facing due to the COVID-19 pandemic, many employers are also confronted with the difficult decision of whether and how to reduce their workforce. Two frequently considered options are furloughs and permanent layoffs (i.e. terminations). A furlough (also referred to as a temporary layoff) typically involves reducing the number of days or weeks that an employee may work, while the employee remains on the employer’s payroll13 in an unpaid status. A layoff can be temporary or permanent (typically referred to as a termination). In the event a furlough results in a reduction of wage rate, the employer must notify the employee in writing prior to implementing the reduction, as explained below.
Termination Notice Requirements
If a New York employer decides to permanently layoff or terminate an employee (whether it be one employee or a 100 employees), it has certain obligations to that terminated employee. First, the employer must pay the employee’s final wages by the next regular payday.14 Second, the employer must provide the employee with an unemployment insurance notice (Form IA 12.3). It is recommended that employers provide this form to furloughed employees as well, as they too are eligible for unemployment benefits in New York during their furlough. Third, the employer must notify the employee within five days of the termination date, in writing, of the exact date of termination as well as the exact date of cancellation of employee benefits connected with termination. New York State may penalize the employer if it fails to satisfy these requirements.
An employer must also assess whether it owes its fired employee accrued time-off benefits. This determination will largely fall on whether or not the employer’s policy states that the employer owes the employee payout of accrued vacation and sick pay at the time of job termination.
The federal Worker Adjustment and Retraining Notification (WARN) Act is triggered when a “mass layoff” or a “plant closing” occurs. A “plant closing” is defined as 50 or more countable employment losses at a single site of employment in a 90-day period that results from ceasing operations at a facility or in one or more operating units at the facility. An “employment loss” is a termination, a temporary layoff (or furlough) exceeding six months, or a reduction in an employee’s hours of more than 50% over a six-month period.15 Thus, a permanent plant closing or one that lasts more than six months can trigger WARN. A “mass layoff” is defined as 50 or more countable employment losses at a single site of employment in a 90-day period that also involves 33% of the active workforce at the site. Generally, 60 days’ specific written notice must be provided to affected employees in the event of a plant closing or mass layoff. Employees with fewer than 6 months of service in the prior 12 months, or who work less than 20 hours per week, are not counted toward these requirements.
The New York WARN Act is triggered by a plant closing affecting as few as 25 countable employees, or a mass layoff affecting as few as 25 countable employees who constitute at least 33% of the active workforce, or when 250 countable employment losses occur at a single employment site. In such a case, 90 days’ specific written notice must be issued to the affected employees, their representatives, the State Labor Department, and the Local workforce investment partners.
Notice must be provided to affected employees, any union representatives, and various government agencies. State regulations prescribe in some detail the requirements of each notice. Employers that fail to give notice may be liable to employees for back pay and benefits for up to 60 days of violation The New York WARN Act also provides for a civil penalty of $500 per day of violation.
Both New York and federal WARN have exceptions that permit shortened notice where “unforeseen business circumstances” prevented the employer from giving 90 days or 60 days notice respectively. However, notice must still be given as soon as possible prior to the layoff or plant closure. During the current pandemic many employers have availed themselves of this exception given the sudden, drastic unexpected economic consequences of the virus.16
Furloughs, i.e., Temporary Layoffs
Generally, temporary layoffs, such as furloughs, of less than six months, do not trigger federal or NY State WARN; however, there are some exceptions and the size and duration of the layoffs matter. Under federal and state WARN a layoff that extends for more than six months is generally treated as an employment loss as of the time the layoff commences. Therefore, if the employees were not given valid WARN notices at the commencement of the furlough, and the furlough extends for longer than six months, the employees will be eligible for WARN damages. For this reason, the Department of Labor, in its preamble to the final WARN regulations, stated that "[a]n employer may, therefore, want to consider giving notice at least 60 days prior to the layoff unless it is certain that the layoff will not exceed six months."
Reduction in Pay
Employers may also consider a temporary reduction in pay in response to the economic downturn. While federal law does not require employers to provide notice to employees of a change in pay, state law may require it. For example, New York employers must provide their employees a notice of the reduction, which is often satisfied through the paystub itself. However, the recommended practice at this time is to provide written notice of the upcoming reduction and be sure to document “read receipt” if the employee cannot execute a signed acknowledgment.
This section regarding layoff and furlough requirements is state specific. If an employer has employees in other states, be sure to check state specific obligations before restructuring your workforce.
Other New York Laws to Consider for Hourly Employees
New York City’s Temporary Schedule Change Law17
On March 21, 2020, the Department of Consumer and Worker Protection published updated guidance on New York City’s Temporary Schedule Change Law, which applies to non-exempt hourly employees. Under this law, NYC employees can ask to make temporary changes to their own schedules for certain personal events twice per year, totaling no more than two days. Personal events include (1) providing care for a minor or care recipient; (2) attending a legal proceeding for essential benefits; and (3) taking leave for acceptable sick leave uses, including quarantine.
Notably, these two schedule change days are in addition to an employee’s ESSTA leave and include uses such as an employee’s needing to care for a child whose school or daycare has been closed due to COVID-19.
New York City’s Fair Workweek Law18
Under the New York City Fair Workweek Law, fast food and retail employers must give workers advance (14 days’) notice of schedule changes. Despite Governor Cuomo’s Executive Orders requiring New York’s non-essential workforce to say home, the guidance states “if the business remains open, even with limited operations such as delivery/takeout service only, employees must get premium pay for schedule changes.” Examples of when premium pay is required include:
- when one employee covers the shift of a sick coworker;
- when the business remains open for delivery or takeout and staff is asked to work different shifts or additional hours (“even when the City or State has declared a state of emergency”);
- when the business cancels scheduled shifts or reduces hours of scheduled shifts due to a decrease in business.
Financial Assistance for New York Employers
The New Coronavirus Stimulus Bill (CARES Act)19
The federal government passed the Coronavirus Aid, Relief, and Economic Security Act (CARES Act), which is intended to provide tax relief and loan provisions to employers and extra unemployment benefits to out-of-work employees.
Although it is difficult to briefly summarize the entire bill, below are some of the highlights for New York employers:
- $600 Extra Weekly Unemployment Benefits. The federal government will provide $600 per week in unemployment pay on top of whatever unemployment benefits the employee receives from New York State. In New York, the unemployment benefit cap is $504.00. If an employee maxes out on state-funded benefits, an employee could receive $1,104 per week in unemployment. To calculate an employee’s base unemployment benefit, look here.
- Tax Credit of $5,000 of compensation, including health benefits.
- Employers with fewer than 100 employees: Employers with fewer than 100 full-time employees who keep their employees on the payroll through the COVID-19 crises will receive a tax credit of up to $5,000 for each employee they keep.
- Employers with more than 100 employees: Employers with more than 100 full-time employees are also eligible to receive this credit, but only when (a) the business is fully or partially suspended due to a governmental order related to COVID-19 or (b) the gross receipts for the business are less than 50% of gross receipts for the same calendar quarter of the prior year.
- This credit (irrespective of employer size) can be applied to wages paid from March 13, 2020, through December 31, 2020, and is capped at $5,000 per employee (50% of $10,000 of qualified wages).
- New IRS guidance states the employers may take a credit for wages paid for part-time employment, reduced schedules, and during any time that the employee is not providing services (e.g., a furlough in which the employee retains benefits). Read more about the updated guidance on credits for employee retention under the CARES Act and credits for FFCRA leave here.
- Employers with 500 or fewer employees.
- Up to $10,000 grants are available to employers with 500 or fewer employees.
- Up to $10 million loans to employers with 500 or fewer employees provided the employer continue to employ their employees through the end of June 2020.
This article reflects just some of the many currents that New York employers must navigate in the face of this COVID-19 pandemic. We recommend that employers create a plan of action that includes a checklist for each goal, taking into account both immediate business needs and larger considerations of company culture. For example, if a telecommuting policy is a goal, employers should include in their checklist provisions for how to capture time worked, equipment, communication and availability, and possibly a signed acknowledgment for the employee. Similarly, if restructuring is a goal, employers should include in their checklist an assessment of wage and hour, WARN and unemployment insurance requirements in every state that may be affected, among other factors. Employers should review their current attendance and leave policies to ensure compliance with new sick leave requirements in the various locations where they operate as well as their obligation to provide a safe workplace; given the current public health crisis and restrictions on non-essential work, pre-COVID-19 attendance or other policies may need to be reconsidered. Employers should consult with counsel in evaluating and creating these customized plans of action.
1 The state has provided Frequently Asked Questions (FAQs) here.
2 Employers can read more about this process on the Centers for Disease Control and Prevention website here and the New York Department of Health guidance here.
3 Note that employees of “large” employers (i.e., 100 employees or more), will not be eligible for these enhanced paid COVID-19 benefits under the new law. However, such employees will be eligible for PFLBL coverage if caring for a sick family member and retain access to disability benefits if they themselves remain sick after the 14 days of paid sick leave has expired.
4 As of this writing, the CDC has designated all international travel as Level 3.
5 H.R. 6201.
6 The WHD released a Questions and Answers on the FFCRA, a Fact Sheet for Employers and a Fact Sheet for Employees on the Emergency Family and Medical Leave Expansion Act, and other additional guidance.
7 In order to determine whether an entity is a single employer for the purposes of the Emergency Paid Sick Leave Act, the Department of Labor uses the (revised) joint employer standard. The DOL uses the integrated employer standard for determining whether an entity is single employer under the Emergency Family Medical Leave Act. Multiple entities found to be joint and/or integrated employers may aggregate their total employee headcount for the purposes of determining FFCRA coverage.
8 Previous guidance had stated an effective date of April 2, 2020.
9 Littler first reported on the bill before it became law here. The Department of Labor provides “Questions and Answers” to assist employers in navigating the new law, and Littler summarized that guidance here.
10 Note, however, that an employee may receive concurrent paid leave under New York State’s Emergency Paid Sick Leave Act or accrued paid leave from another source, such as leave under the New York City Earned Safe and Sick Time Act..
11 Part-time employees receive paid leave hours equal to the average hours they worked over a two-week period.
12 N.Y.C. Admin. Code § 20-912.
13 Note that what rights furloughed employees have to healthcare coverage will depend upon a number of factors including the terms of its health plan; this may be affected by how the employer measures who is a full-time employee eligible for benefits. Some employers will be required to keep furloughed employees on coverage until the end of a “stability period” (generally the plan year). Others will measure full-time status monthly and will have no obligation to cover the employees beyond the end of the month of the furlough. Still others could lose their benefits immediately. Employers should check the terms of their plans and wrap-around plans, check with counsel if necessary (as plan documents will often not provide clear guidance on these issues), and speak to and get a written commitment from their carriers to cover furloughed employees if they plan to provide such coverage. (Self-insured employers should speak to their stop-loss carriers.).
14 Note that special rules apply to commissioned salespeople. It is advisable to consult with counsel if you are laying off a commissioned salesperson.
15 A different analysis may apply if the employer is engaged in a Shared Work Program with the New York Department of Labor.
16 Other states also have “mini-WARN” laws. These vary greatly with respect to when or how notice is triggered, how much notice must be given, which employees count towards triggering the notice, and whether there is an exception for unforeseen business circumstances.
17 N.Y.C. Admin. Code §§ 20-1260-1263 (July 18, 2018).
18 N.Y.C. Admin. Code § 20-1201 (Nov. 26, 2017).
19 H.R. 748.