Helping Employers Through COVID-19
A lot of employers are going through significant changes in their businesses as the Coronavirus pandemic continues to affect our communities. Employers have reached out to us with various questions. In this guidance we attempt to address some of the questions asked.
Below are some guidelines to keep in mind:
1. Remember these times are temporary and the relaxation of your policies are in the best interest and health of the community as a whole.
2. Plan for additional cleaning or sanitization of services, also with provision of soap, disinfectant wipes, hand sanitizer (provide alcohol-based hand rubs containing at least 60% alcohol)
in order to ensure work place safely. Follow OSHA guidance on workplace safety.
3. If you are open as an essential business and an employee comes to work who appears to have acute respiratory illness symptoms (i.e. cough, shortness of breath) or become sick during the day, they should be separated from other employees and be sent home immediately. If the employee has paid sick leave available, the employer must provide such leave and compensate the employee under California paid sick leave laws. An employer cannot require the affected employee to use paid sick leave; that is the employee’s choice. If the employee decides to use paid sick leave, the employer can require they take a minimum of two hours of paid sick leave. The determination of how much paid sick leave will be used is up to the employee. The Department of Labor has provided information on common issues employers and employees face when responding to COVID-19, and its effects on wages and hours worked under the Fair Labor Standards Act (FLSA).
a. If economically feasible, consider permitting employees who are sick to use paid time off and relaxing other leave policies to encourage them to remain at home. The Family and Medical Leave Act (FMLA) or the newly-passed Families First Coronavirus Response Act prohibits employers from terminating employees for taking job-protected leave. Pursuant to United States Department of Labor an employee can refuse to come to work if he/she believes to be in imminent danger. While this may not be the case in the current circumstances, but this section amplifies an employer’s flexibility to allow employees to use sick leave or other paid time off during these times.
b. Effective April 01, 2020 covered employers (employers fewer than 500 employees) are required to provide eligible employees two weeks of paid sick leave at the employee’s regular rate of pay if the employee is unable to work (or telework) due to COVID-19-related absence. See Families First Coronavirus Response Act. For additional details on the impact of the new legislation on employers see this page.
c. If you are monitoring an employee’s temperature, ensure you are compliant with the CDC regulation protect the employees privacy rights. Additionally, keep in mind that you are required to pay your employee for the waiting time spent to be tested pursuant to the wage and hour Laws.
4. When an employee has tested positive for the coronavirus notify the rest of the workforce about when and where that employee was working and who else may have been exposed. However, the employee should not be named and information about his or her illness should be kept in a private file.
5. Per the CDC you are not to require a healthcare provider’s note for employees who are sick with acute respiratory illness to validate their illness or to return to work, as healthcare provider offices and medical facilities may be extremely busy and not able to provide such documentation in a timely way.
6. Maintain flexible policies that allow employees to stay home to care for a sick family member. Employers should be aware that more employees may need to stay at home to care for sick children or other sick family members than is usual.
7. Accommodate a remote work policy to allow continuance of operations while employees work from home. It is critical to set up a policy that respect wage and hour laws. Ensure that your non-exempt employees are working the same regular hours as previously and taking the required breaks and meal periods. As such, contemporaneous record keeping and reporting of an employee’s hours is vital. Additionally, for employees working from home, ensure that remote access is secure and will not expose your network. Do not forget to obtain the adequate amount of licenses for softwares you will be using remotely.
8. Additionally, COVID-19 may create discrimination or retaliatory behavior by other employees. As such, remember that employers should consult the company’s anti-discrimination and anti-harassment policies to address conduct that violates such policies.
9. On March 17, 2020 Governor Newsom signed an Executive Order N-31-20, relieving California employers of some of the notice requirements mandated by California’s Worker Adjustment and Retraining Notification (WARN) Act in case of implementing mass layoffs, relocations or termination. While the language still requires prior notice, it relieves the employers of the 60 days advanced timing requirements. This Order will be applicable in California during the period of the COVID-19 emergency.
10. Review your business insurance policies in order to ascertain if there is provision for offsetting the effects of shutdown. Business income coverage is at times included in some commercial insurance coverage.
11. Review your contracts in order to verify an existence of a specific force majeure clauses. A force majeure provision or an “act of God” provision addresses circumstances where a party may terminate their contractual obligation without liability in case of major unforeseen events. California Civil Code also provides for relief of obligation under a contract in case of unforeseen events. For more information on force majeure visit this page.
Plan the organization of how your business will continue in case of shutdown, furlough or other benefits. Consider short benefits vs. long term effects and costs of hiring new employees once we return back to normal business. Feel free to contact our office in order to assist in this process as you must ensure you remain in compliance with other laws that could come into play, such as implication of WARN Act, the federal Family and Medical Leave Act and state/local paid sick time laws.
Depreciation of Qualified Improvement Property.
Pursuant to the CARE ACT Section 2307 “qualified improvement property” is eligible for 100% depreciation. This correction is retroactive and applies not only for 2020 but also to 2019 and 2018 tax years. However, an amendment to rax returns must be done to take advantage of the depreciation.
Five-Year Carryback for Net Operating Losses (NOLs).
Prior to the CARES Ac Section 2303 net operating losses (NOLs) were capped at eighty percent (80%) of a business’ taxable income and could not be carried to previous years. The CARES Act also allows taxpayers to use their NOLs to offset hundred percent (100%) percent of taxable income in tax years 2018, 2019, and 2020. Additionally CARES Act allows the NOLs incurred in 2018, 2019 and 2020 to be carried back five taxable years.
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