Phillips Murrah ongoing coverage related to coronavirus.

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Senate Approves CARES Act: Key Tax Changes

Late Wednesday evening, the Senate passed a third stimulus bill in the wake of the public health crisis and economic fallout stemming from the COVID-19 outbreak.  The new bill, the Coronavirus Aid, Relief, and Economic Security (or “CARES”) Act has not yet been voted on by the House, although a vote is expected by Friday.

As it currently stands, the bill provides both individuals and businesses with robust economic support, including through changes to the federal tax code.

Phillips Murrah attorney Jessica Cory

Jessica N. Cory represents businesses and individuals in a wide range of transactional matters, with an emphasis on tax planning.

Two of the key tax changes include:

  • Recovery Rebates for Individual Taxpayers.  The CARES Act would provide a $1,200 refundable tax credit for individuals (or $2,400 for joint taxpayers), plus an additional $500/child for taxpayers with children.  Taxpayers would not have to include these rebates in taxable income on their 2020 tax returns and the rebate would be refundable for taxpayers with no offsetting tax liability.  To be eligible, an individual must have earned qualifying income on a 2018 or 2019 tax return, which includes both earned income and certain retirement benefits, including Social Security payments.  The credit begins to phase out for individuals with adjusted gross income of at least $75,000 (or $150,000 for joint taxpayers, or $112,500 for heads of household), with the credit reduced by 5% for each additional dollar of income over that amount.  Currently, the credit is intended to be a one-time rebate, although lawmakers may consider additional rebates in the event of a prolonged downturn.
  • Employee Retention Credit for Employers.  Under the CARES Act, employers would be eligible to take a 50% refundable payroll tax credit on up to $10,000 of wages paid during the crisis, for a credit of up to $5,000/employee.  This credit would be available to employers whose business is forced to close, or partially close, due to virus-related shutdown orders, or which has a significant decline in gross receipts, meaning a decrease of 50% or more when compared to the same quarter in the prior year.  Employers with more than 100 employees would qualify for the credit for wages paid to employees retained but not currently working due to the crisis.  Smaller employers would qualify for the credit for all employee wages paid.

The CARES Act also includes a number of other helpful provisions for both individuals and businesses.  For example, certain individuals affected by COVID-19 could take up to $100,000 of early distributions from qualified retirement plans without the normal 10% penalty, with the ability to repay these amounts within three years of withdrawal, or recognize the distribution in taxable income over a three-year period.  In addition, the CARES ACT would also create a new above-the-line charitable contribution for individuals who do not itemize, allow individuals who do itemize to take increased charitable contribution deductions, and permit individuals to exclude up to $5,250 of employer-provided student loan repayment from income.  For businesses, the CARES Act would modify the limits on net operating losses for corporations (and the limitation on losses for taxpayers other than corporations) enacted as part of the 2017 Tax Cuts and Jobs Act (the “TCJA”), modify the TCJA’s limitation on business interest expense deductions, and make other technical amendments.  Finally, both individuals and businesses would be able to delay certain tax payments, including employer-side Social Security taxes and 50% for self-employed individuals’ Social Security tax.


For more information on this alert and its impact on your business, please call 405.552.2472 or email me.

Keep up with our ongoing COVID-19 resources, guidance and updates at our RESOURCE CENTER.

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Senate Approves CARES Act: Important SBA Loan Information

By Phillips Murrah Attorney Kara K. Laster

Late last night, the Senate unanimously approved the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”), which is set for a House vote on Friday. The legislation authorizes $349 billion for loans to be distributed under Small Business Administration’s 7(a) program. Some of the important information for small businesses is highlighted below:

Phillips Murrah attorney Kara Laster

Kara K. Laster represents individuals and businesses in a broad range of transactional matters including real estate and mergers and acquisitions.

  • Eligible businesses are those with 500 or fewer employees.
    • To be eligible, businesses must have been operational as of February 15, 2020.
    • Sole proprietors, independent contractors and self-employed individuals are also eligible to apply for the loans.
    • Exceptions apply for industries in which the SBA size standard allows more than 500 employees.
  • Small businesses may receive loans of up to $10 million under the new maximum loan amount.
    • Lenders will determine the proper loan amount by using a formula that takes into account past payroll expenses.
  • In addition to existing allowable uses, businesses may use the money from loans for payroll; paid sick, medical, or family leave; continuation of group health care benefits; mortgage, rent, and utility payments; and other debt.
  • Loan forgiveness is available to businesses that retain workers or rehire workers who were laid off.
    • Businesses will not have to repay loans used for payroll costs, interest payments on mortgages incurred before February 15, 2020, rent under a lease in force before February 15, 2020, and utilities for which service began prior to February 15, 2020.
    • Only payments made during the 8-week period beginning on the date of the origination of the loan will be forgiven.
    • The amount forgiven will decrease in proportion to a reduction in the number of employees.
  • Small businesses will be able to apply through banks, credit unions and other lenders.
    • Approximately 1,800 private lenders are already approved to issue 7(a) loans, and Treasury Secretary Steven Mnuchin stated that new regulations will make it possible for almost all FDIC-insured banks to make SBA loans.
  • Special terms include a maximum interest rate of 4%, no prepayment penalty, no personal or collateral guarantee requirement, and the ability to defer payments for six months to a year. The maximum term of the loan is 10 years.

The CARES Act also includes assistance for mid-sized businesses with between 500 and 10,000 employees. The Secretary of the Treasury will implement a program that provides financing to banks and other lenders that make direct loans to mid-sized businesses. The annual interest rate for these loans will not exceed 2% and no interest payments will be due for at least 6 months after a loan is made. The funds must be used to retain at least 90% of the workforce with full compensation and benefits until September 30, 2020. In addition, businesses seeking loans must not outsource or offshore jobs for the term of the loan plus 2 years after repayment, and may not issue dividends for up to a year after repayment.


For more information on this alert and its impact on your business, please call 405.606.4762 or email me.

Keep up with our ongoing COVID-19 resources, guidance and updates at our RESOURCE CENTER.

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What are considered “essential services” in Oklahoma during COVID-19?

Due to the horrible effects of the COVID-19 global pandemic, Oklahoma Governor Kevin Stitt has ordered that all businesses not identified as being within a critical infrastructure sector to close. Understandably, the order has a lot of Oklahomans wondering who and what falls into the category of being considered as a part of the critical infrastructure sector.

On Mar 25, Oklahoma Governor Kevin Stitt offered clarity on the form of the Executive Department Amended Executive Memorandum 2020-01 in which he outlined “critical infrastructure sectors,” as copied from The Order, below:


Kevin Stitt
Office of the Governor
State of Oklahoma

FILED MAR 25 2020
OKLAHOMA SECRETARY OF STATE
EXECUTIVE DEPARTMENT AMENDED  EXECUTIVE  MEMORANDUM 2020-01

Stitt Amended Exec Order 032420

Click to view primary document.

On March 25, 2020, the 164th case of a novel coronavirus (“COVID-19”), was confirmed in the State of Oklahoma. As noted in a previous Executive Order, the United States Centers for Disease Control and Prevention has identified the potential public health threat posed by COVID-19 as “high” both globally and in the United States. In addition, on March 14, 2020, the President of the United States declared a national health emergency in the United States as a result of the national spread of COVID-19.

On March 15, 2020, I issued Executive Order 2020-07 declaring an emergency caused by the impending threat of COVID-19 to the people of this State and the public’s peace, health, and safety. And, on March 24, 2020, I issued the Fourth Amended Executive Order 2020-07. Paragraph 20 of the Fourth Amended Executive Order 2020-07 ordered all businesses not identified as being within a critical infrastructure sector as defined by the U.S. Department of Homeland Security (USDHS) and located in a county experiencing community spread of COVID-19, as identified by OSDH on its website, to close.

In addition to those critical infrastructure sectors identified by USDHS, I hereby add the following:

HEALTHCARE/ PUBLIC HEALTH

    • Health care providers (e.g. physicians, dentists, psychologists, mid-level practitioners, nurses and assistants, infection control and quality assurance personnel, pharmacists, physical and occupational therapists and assistants, social workers, speech pathologists and diagnostic and therapeutic technicians and technologists).
    • Manufacturers, technicians, logistics and warehouse operators, and distributors of personal care/hygiene products.
    • Behavioral health workers (including mental and substance use disorder) responsible for coordination, outreach, engagement, and treatment to individuals in need of mental health and/or substance use disorder services.
    • Workers who provide support to vulnerable populations to ensure their health and well-being including family care providers.
    • Medicinal marijuana dispensaries and all licensed medicinal marijuana companies that are in the supply chain for any medicinal marijuana dispensary
    • Workers supporting veterinary hospitals and clinics.

LAW ENFORCEMENT, PUBLIC SAFETY, FIRST RESPONDERS

    • Including front line and management, personnel include emergency management, law enforcement, Emergency Management Systems, fire, and corrections, search and rescue, tactical teams including maritime, aviation, and canine units.
    • Workers at Public Safety Answering Points.
    • Fire mitigation activities.
    • Private security, private fire departments, and private emergency medical services personnel.
    • State and County workers responding to abuse and neglect of children, elders and dependent adults.
    • Animal control officers.

FOOD AND AGRICULTURE

    • Farm supply and hardware stores
    • Groves, greenhouses, nurseries, and vineyards
    • Agriculture, Forestry, Fishing and Hunting
    • Food manufacturing
    • Beverage and tobacco product manufacturing
    • Manufacturing of fiber and forestry products
    • Veterinary services
    • Certified farmers’ markets, farm and produce stands
    • Food cultivation, including farming, livestock and fishing
    • Support of agricultural production including manufacturers, processors, sellers, transporters, and suppliers of livestock, poultry, feed, seed, water, fertilizer, herbicides, or insecticide and those that care for animals, crops, groves, greenhouses, nurseries, vineyards, forests, farms, and ranches
    • Hardware stores, farm stores, and garden centers

ENERGY

Electricity Industry:

    • Acquisition (SCADA) systems, and utility data centers; Cybersecurity engineers, cybersecurity risk management.
    • Power Generation, Transmission
    • Safety and environmental personnel, and those who support and ensure the supply chain and supply chain management
    • These categories of workers applies to all wind, solar, gas, hydroelectric and coal facilities.

Petroleum Workers:

    • Midstream Companies
    • Liquids or produced water/waste storage facilities
    • Petroleum refinery fractionators, blenders
    • Produced water waste facilities, including UIC wells and transportation
    • Brine separation and processing facilities
    • Transportation maintenance and inspection workers
    • Pipeline maintenance and construction workers who may be required to traverse state lines to maintain facilities that cross state lines
    • Workers who maintain supply chain for these facilities
    • Petroleum security operations employees and workers who support emergency response services

Natural and Propane Gas Workers:

    • Other compression facilities
    • Processing, refining, and transporting natural gas liquids, including propane gas, for use as end-use fuels or feedstocks for chemical manufacturing
    • Propane gas storage, transmission, and distribution centers
    • Compressed natural gas, liquefied natural gas, and propane gas retail and non-retail fuel stations, depots, and truck stops, that serve the public as well as private stations that support local and regional transportation companies such as transit authorities, refuse fleets, and freight haulers

WATER AND WASTEWATER

    • Drinking water and wastewater
    • Drinking water plant superintendents, managers, operators and maintenance technicians
    • Drinking water distribution system operators and maintenance technicians
    • Wastewater plant superintendents, managers, operators and maintenance technicians
    • Wastewater collection system operators and maintenance technicians
    • Laboratory certified operators and employees of a government or privately­ owned laboratory that are accredited to analyze routine compliance drinking water or municipal wastewater samples
    • Rural water association staff and technical support staff
    • Rural water districts, including all facilities

TRANSPORTATION AND LOGISTICS

    • Taxis, transportation services including Transportation Network ComTaxis, transportation services including Transportation Network Companies, and delivery services, including Delivery Network Companies.
    • Wholesale trade
    • Transportation and warehousing
    • Postal services and distribution centers

PUBLIC WORKS

    • Solid waste & hazardous waste
    • Utilities
    • Underground damage prevention services
    • Operational staff for solid waste pick-up
    • Operational staff at solid waste transfer and disposal facilities
    • Operational staff at hazardous waste treatment, storage, and disposal facilities, including underground injection control sites

COMMUNICATIONS AND INFORMATION TECHNOLOGY

    • Broadcasting
    • Publishing industries
    • Telecommunications
    • Data processing, hosting, and related services
    • Software publishers
    • All other miscellaneous schools and instruction
    • Computer systems design and related services

OTHER COMMUNITY-BASED GOVERNMENT OPERATIONS AND ESSENTIAL FUNCTIONS

    • Faith-based services that are provided through streaming or other technology.
    • Critical government workers, as defined by the employer and consistent with Continuity of Operations Plans and Continuity of Government plans.
    • Workers supporting public and private childcare establishments, pre-K establishments, K-12 schools, career and technology centers, colleges, and universities for purposes of distance learning, provision of school meals, or care and supervision of minors to support essential workforce across all sectors.
    • County workers responsible for determining eligibility and safety net benefits.
    • The Courts, consistent with guidance released from the Oklahoma Supreme Court and Oklahoma Court of Criminal Appeals.
    • Tag agencies
    • Workers and instructors supporting academies and training facilities and courses for the purpose of graduating students and cadets that comprise the essential workforce for all identified critical sectors.
    • Hotel Workers where hotels are used for COVID-19 mitigation and containment measures, including measures to protect homeless populations.
    • Hotels
    • Construction Workers, including residential and commercial, and workers who support the construction, operation, inspection, and maintenance  of construction sites and construction projects (including housing construction and heavy and civil engineering construction)
    • Businesses and workers that support the supply chain for commercial and/or residential construction and development
    • Workers such as plumbers, electricians, exterminators, and other service providers who provide services that are necessary to maintaining the safety, sanitation, construction material sources, and essential operation  of construction sites and construction projects (including those that support such projects to ensure the availability of needed facilities, transportation, energy and communications; and support to ensure the effective removal, storage, and disposal of solid waste and hazardous waste).
    • Oklahoma One-Call or OKIE 811
    • Commercial Retail Stores, that supply essential sectors, including convenience stores, general merchandise stores, liquor, pet supply stores, auto supplies and repair, hardware and home improvement, and home appliance retailers.
    • Motor vehicle and parts dealers
    • Workers supporting the entertainment industries, studios, and other related establishments, provided they follow covid-19 public health guidance around social distancing.
    • Workers critical to operating Rental Car companies that facilitate continuity of operations for essential workforces, and other essential travel.
    • Workers that provide or determine eligibility for food, shelter, in-home supportive services, child welfare, adult protective services and social services, and other necessities of life for economically disadvantaged or otherwise needy individuals (including family members).
    • Workers at animal care facilities that provide food, shelter, veterinary and/or routine care and other necessities of life for animals.
    • Public and private golf courses, public parks, and workers needed to maintain normal operations.
    • Workers involved with home repair and maintenance including roofing, lawn care, foundation repair, and similar businesses whose work is primarily performed out of doors.
    • Executive, legislative, and other general government support
    • Administration of human resources programs
    • Administration of environmental quality programs
    • Administration of   housing   programs, urban planning, and community development
    • Administration of economic programs

CRITICAL MANUFACTURING

    • Paper manufacturing
    • Printing and related support activities
    • Plastics and rubber products manufacturing
    • Mineral product manufacturing
    • Primary metal manufacturing including equipment

FINANCIAL SERVICES

    • Finance and Insurance
    • Real estate and Leasing services
    • Management of companies
    • Business associations
    • Financial advisory

CHEMICAL

    • Petroleum and coal products manufacturing
    • Chemical manufacturing

COMMERCIAL AND PROFESSIONAL SERVICES

    • Professional (such as legal and accounting), scientific, and technical services
    • Administrative and support services
    • Waste management and remediation services
    • Death care services
    • Dry cleaning and laundry services
    • Repair and maintenance

DEFENSE INDUSTRIAL BASE

    • Explosives manufacturing
    • National security and international affairs

ABLE permits beer and wine sale from licensed restaurants closed to dine-in service due to COVID-19

Oklahoma City and Tulsa, and many other cities in Oklahoma, have closed restaurants to dine-in service and permit only delivery, take-out or curb-side pickup. Beer and wine is still available to consumers from certain restaurants that are closed to dine-in service.

The Oklahoma Alcoholic Beverage Laws Enforcement (ABLE) Commission will permit such restaurants who already have an on-premises beer and wine or mixed beverage license to allow sealed beer and wine (no spirits) sales with food sales and to take-out or curb-side customers only.

Those beer sales can include draft beer in growlers or other sealed containers, but only from kegs that were tapped as of 3/20/20.

No alcohol sales are permitted with deliveries (either by the restaurant directly or through a commercial delivery service such as Door Dash or Postmates) and no take-out or curb-side alcohol sales are permitted by bars at all.


Phillips Murrah attorney Ellen SpiropoulosLauren Hanna

Ellen assists local and national businesses in the restaurant, entertainment and hospitality industries with obtaining applicable operating licenses and permits for food and alcoholic beverage service as well as any related compliance or enforcement issues.

For more information on this alert and its impact on your business, please call 405.552.2422 or email me.

Keep up with our ongoing COVID-19 resources, guidance and updates at our RESOURCE CENTER.

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Oklahoma Department of Commerce to host teleconference series on SBA Economic Injury Disaster Loans

By Phillips Murrah Attorney Kendra M. Norman

For Oklahoma businesses interested in more information about the U.S. Small Business Administration (SBA) Economic Injury Disaster Loan Program, The Oklahoma Department of Commerce is hosting three teleconferences that will cover the application process.

Also, according to their website, Commerce Director of Business Retention and Expansion, Ray Little, and SBA Office of Disaster Assistance Public Information Officer, Susheel Kumar, will be on the calls to provide information and answer questions.

Upcoming Calls will occur on the following three days:

  1. Thursday, March 26 from 2 to 3 p.m.
  2. Tuesday, March 31 from 2 to 3 p.m.
  3. Thursday, April 2 from 2 to 3 p.m.

To register, go to this website: https://www.okcommerce.gov/oklahoma-small-business-teleconference-sba-economic-injury-disaster-loan-application-and-program/

@OKcommerce on Twitter

@OKcommerce on Facebook


Kendra Norman Web

Kendra M. Norman represents individuals and businesses in a broad range of transactional matters.

For more information on this alert and its impact on your business, please call 405.606.4726 or email me.

Keep up with our ongoing COVID-19 resources, guidance and updates at our RESOURCE CENTER.

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Cybersecurity during COVID-19 transition to remote work policies

By Phillips Murrah Director Cody J. Cooper

Cody Cooper online photo

Cody Cooper is a Director in the Intellectual Property Practice Group and represents individuals and companies in a wide range of intellectual property matters, including patent, trademark and copyright matters. His practice also includes commercial litigation.

The pandemic spread of the COVID-19 virus brings with it threats to the physical health of employees and the financial health of employers. It also brings an increased data security risk for both individuals and companies.

If you are like me, you have received countless emails from every store, restaurant or business you have ever visited, passed by or looked at (I still can’t figure out how some of these companies have my email address) explaining how they are address the pandemic situation.

Add in the communications regarding the 2020 census, and there are countless opportunities for ill-intending individuals to try to steal your personal information. It is important to be especially vigilant at these times and not click on emails or links in emails or texts unless you are absolutely certain they are legitimate. The best practice is to err on the side of caution and assume anything remotely questionable should not be opened.

For companies, responding to the pandemic situation means having to rethink traditional work settings and moving employees out of the office and enabling them to work from home. With this comes the obvious preparation to allow employees access to company information outside of the company’s network. But, it is incredibly important to recognize that this comes with an increased risk of data security issues.

Allowing employees access to information outside of a company’s traditional network ultimately means that the company has had to store company information on a medium that is accessible through the Internet. Companies should revisit security policies to make certain that they have in place the appropriate measures to prevent unwanted third-parties from accessing this information or employees’ inadvertent misuse of sensitive information.

Companies can take several steps to put themselves in the best position to allow employees to work remotely and while also putting themselves in the best place to continue to secure the company’s sensitive data.

The easiest and most important steps a company can and should take are:

(1) limit access to only employees that need it and only the data they need to perform their job;

(2) set security settings to require password logins (whether through a company device or personal device);

(3) where possible, turn on multi‑factor authentication to ensure a high level of security over the most sensitive data;

(4) decrease the time before device lock out the user and require re-entry of their password.

For companies with the financial and technology capability, they can also deploy data loss prevention (DLP) products such as mobile device management systems or cloud access security broker to add extra layers of data protection. Companies can also run security tests, i.e. fake phishing attempts, during this time to test which employees are practicing safe data security practices and remind those that are not of their responsibilities. It is always good practice to regularly circulate a newsletter with security updates and reminders, and that practice should continue – or or even increase – while employees are working remotely.

Unfortunately, there may be layoffs of employees during this crisis. While employers hope to avoid this at all costs, it is also important to remember to have a plan in place to protect and recoup company devices and data in the even that remotely working employees are terminated. During that time, it is important to terminate access to company data and to recover any outstanding devices. Hopefully these measures will not be necessary, but it is important to have a plan in the event they do occur.

Companies and individuals are in a state of triage trying to address the most pressing needs as they arise. It is especially important at this time for everyone to remain vigilant about their cybersecurity and data security practices, to be proactive, and put plans in place to address potential developments.


For more information on this alert and its impact on your business, please call 405.552.2405 or email me.

Keep up with our ongoing COVID-19 resources, guidance and updates at our RESOURCE CENTER.

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Department of Labor Issues Interim Guidance on Recently-Enacted Coronavirus Response Act

By Phillips Murrah attorney Lauren Barghols Hanna

Phillips Murrah attorney Lauren Hanna

Lauren Barghols Hanna counsels and represents management in all phases of the employment relationship, including litigation matters.

Earlier today, the United States Department of Labor issued its first guidance on the implementation of the recently-enacted Families First Coronavirus Response Act.  The DOL is expected to issue formal implementation regulations later this week.  Some of the important information in this initial compliance assistance document is highlighted below:

  • Act goes into effect on April 1, 2020—applies only to leave taken between April 1st and December 31st
  • Act applies to all businesses that employ fewer than 500 full-time and part-time employees within the United States at the time leave will be taken
    • Employees on leave, temporary employees, jointly-employed employees (regardless of whose payroll they are on—FLSA joint-employer test), and day laborers count toward employee count.
    • Independent contractors not counted as employees
    • FMLA integrated-employer test to determine whether two or more entities are separate employers
  • Small businesses who are concerned that providing paid leave will jeopardize the viability of their business should document why the business meets the DOL criteria for an exemption (criteria will be detailed in upcoming regulations)
  • Regular rate of pay for purposes of the Act is the average of the employee’s regular rate over the six months prior to date leave is taken (including commissions, tips, and piece rates)
  • When employees would normally have been scheduled to work more than 40 hours a week, the eFMLA requires that normal overtime hours be included, however the premium for overtime hours need not be paid. However, Emergency Paid Sick Leave only requires payment of up to 80 hours of sick leave over a 2-week period.
  • Emergency paid sick leave—Employee (paid at the greater of the employee’s regular rate of pay, the federal minimum wage, or applicable State or local minimum wage, subject to cap of $511 per day/$5,110 total) may be taken if an employee is unable to work or telework because the employee:
    • is subject to a Federal, State, or local quarantine or isolation order related to COVID-19;
    • has been advised by a health care provider to self-quarantine due to concerns related to COVID-19; or
    • is experiencing symptoms of COVID-19 and are seeking medical diagnosis
  • Emergency paid sick leave—Caring for Family Member (paid at 2/3 of the greater of the employee’s regular rate of pay, the federal minimum wage, or applicable State or local minimum wage, subject to cap of $200 per day/$2000 total) may be taken if an employee is unable to work or telework because the employee is:
    • caring for an individual who is subject to a Federal, State, or local quarantine or isolation order related to COVID-19 or an individual who has been advised by a health care provider to self-quarantine due to concerns related to COVID-19;
    • caring for your child whose school or place of care is closed, or child care provider is unavailable, due to COVID-19 related reasons; or
    • experiencing any other substantially-similar condition that may arise, as specified by the Secretary of Health and Human Services
  • Emergency Family and Medical Leave—School Closing/Childcare (paid at 2/3 of the greater of the employee’s regular rate of pay, the federal minimum wage, or applicable State or local minimum wage, subject to cap of $200 per day/$12,000 total for twelve weeks, when combined with paid sick leave) may be taken if an employee is unable to work or telework because the employee is unable to work or telework because they need to care for their child(ren) whose school or childcare is closed/unavailable due to COVID-19.
    • First 10 days of eFMLA is unpaid, or an employee may substitute any accrued vacation leave, personal leave, or medical/sick leave

Keep up with our ongoing COVID-19 resources, guidance and updates at our RESOURCE CENTER.

For more information on this alert and its impact on your business, please call 405.606.4732 or email me.

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Senate reaches bipartisan deal on CARES Act

By Phillips Murrah attorney Lauren Barghols Hanna

Early this morning, the Senate reportedly reached a bipartisan deal to finalize and pass the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”), a $2 trillion stimulus package seeking to address the widespread economic damage caused by the ongoing coronavirus pandemic.  In addition to directly sending $1,200 checks to many Americans, the legislation reportedly creates a $367 billion loan program for small businesses, supplements state unemployment insurance benefits, directs $150 billion to state and local stimulus funds, and forms a $500 billion fund for industries, cities and states.

The Senate is expected to vote on the CARES Act on Wednesday afternoon.

Phillips Murrah will keep you advised as the CARES Act advances through Congress. Keep up with our ongoing COVID-19 resources, guidance and updates at our RESOURCE CENTER.


Phillips Murrah attorney Lauren Hanna

Lauren Barghols Hanna is an attorney in the Labor & Employment Practice Group. As a part of her employment practice, Lauren counsels and represents management in all phases of the employment relationship, including litigation matters involving discrimination, retaliation, harassment and wrongful discharge claims, whistleblower claims, claims related to employment agreements and theft of trade secrets, and other disputes arising from the workplace.

For more information on this alert and its impact on your business, please call 405.606.4732 or email me.

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OTC issues tax notice related to curbside or drive-through sales of packaged beer and wine

By Phillips Murrah Director Dawn M. Rahme

The ABLE Commission recently issued an advisory letter allowing restaurants holding mixed beverage licenses to sell packaged beer and wine in conjunction with food sales through curbside pickup or drive-through.

In response, the Oklahoma Tax Commission issued a notice dated March 20, 2020 addressing the mixed beverage tax related to curbside or drive-through sales of packaged beer and wine.  The Oklahoma Tax Commission’s notice provides that such sales do not constitute mixed beverages that are subject to the 13.5% mixed beverage tax. However, the sale of packaged beer and wine in these instances should be treated as a retail sale subject to regular sales tax.


Dawn Rahme Oklahoma City tax law

Dawn M. Rahme is a Director and a member of the Firm’s Executive Committee. She represents individuals and businesses in an array of transactional matters with a focus on assisting corporations, partnerships and individuals in general tax planning.

For more information on this alert and its impact on your business, please call 405.606.4770 or email me.

Keep up with our ongoing COVID-19 resources, guidance and updates at our RESOURCE CENTER.

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Court-ordered custody visitation issues during COVID-19 pandemic

By Phillips Murrah attorney Robert K. Campbell

As you are aware, Governor Stitt issued Executive Order 2020-7 on March 15, 2020, declaring an emergency in all 77 Oklahoma Counties due to the impending Covid-19 threat to the people of Oklahoma. On March 16, 2020, the Oklahoma State School Board ordered all accredited public schools in the state to cease operations for students and educators until April 6, 2020 in response to the Covid-19 novel coronavirus.

For families dealing with a court-ordered visitation schedule due to divorce, paternity actions, guardianships, or otherwise, there was no clear direction on how they should continue with their current court-ordered visitation schedule that primarily revolved around start and stop dates correlating with the minor child(ren) school calendar.

Attorney Robert Campbell

Robert K. Campbell practices in the area of family law, specifically concentrated in matters of divorce, legal separation and custody issues. He represents clients by providing steady, thoughtful and resourceful counsel to advise them through significant family and life transitions.

For instance, this is a time in which most schools are experiencing Spring Break or should be beginning classes following Spring Break. Typical visitation schedules provide that Spring Break begins when school lets out for the break and ends when school resumes. Some may be wondering what this mean for parents who were set to begin their regular visitation on the date in which the school calendar provided for school to resume after the break.

Due to the Oklahoma State School Board’s mandate that school operations cease until April 6th, does that mean that a parent who has their child(ren) for Spring Break does not have to return the child(ren) to the other parent until “school resumes” as many visitation schedules order?

The answer is no. On March 23, 2020, the Oklahoma Supreme Court issued its Second Emergency Order Regarding the Covid-19 State of Disaster. This Order applies to, and clarifies, visitation or parenting time schedules in Family/Domestic Relations/Dissolution of Marriage/Paternity/Guardianship and/or any other cases concerning custody and visitation of minor children, wherein a school schedule is used to determine visitation and/or custody.

This Order provides that, for purposes of determining a person’s right to custody and visitation, the original published school schedule shall control in all instances. A person’s right to visitation is not to be affected by the school’s closure that arise from the Covid-19 pandemic.

What this means is that visitation, which is determined based on school schedules, is to remain on schedule as if the schools had not closed and ceased operations. Therefore if one parent’s visitation schedule for Spring Break was to end when “school resumes” from the break, then that is when the regular visitation schedule is to begin again, regardless of a school’s current closing.

This applies to upcoming holidays, and most likely summer break, if schools remain closed.

For all intents and purposes, visitation schedules that are dependent upon school calendars for visitation beginning and ending points, the school schedule will continue to govern the beginning and ending of holiday breaks and summer.

Nothing in the Second Emergency Order prevents parties from mutually agreeing to a different schedule by written agreement, if allowed by the assigned judge. However, only written modifications which are filed will be enforced.


For more information on this alert and its impact on your family, please call 405.606.4797 or email me.

Keep up with our ongoing COVID-19 resources, guidance and updates at our RESOURCE CENTER.

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State-by-State breakdown of COVID-19 tax relief to taxpayers

By Phillips Murrah Director Dawn M. Rahme

Over thirty states and municipalities are offering tax relief to taxpayers in connection with the COVID-19 outbreak. Attached (click HERE) is a summary of the various state and local actions as of March 24, 2020 that was prepared by Thompson Reuters Checkpoint.  So far, Oklahoma has provided two relief measures.

First, Oklahoma is following the federal deadlines and will be extending the due date from April 15 to July 15  for filing your Oklahoma income tax return and payment of any Oklahoma income taxes.

Second, for transportation carries of materials, equipment and supplies that are used for direct assistance in support of emergency relief efforts for COVID-19, Oklahoma is temporarily suspending any costs and fees for oversize or overweight permits.

More relief efforts are underway, and as they become available, we will share them with you.


Dawn Rahme Oklahoma City tax law

Dawn M. Rahme is a Director and a member of the Firm’s Executive Committee. She represents individuals and businesses in an array of transactional matters with a focus on assisting corporations, partnerships and individuals in general tax planning.

For more information on this alert and its impact on your business, please call 405.606.4770 or email me.

Keep up with our ongoing COVID-19 resources, guidance and updates at our RESOURCE CENTER.

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Understanding Paid Sick Leave Tax Credits for Employers

By Phillips Murrah Director Dawn M. Rahme

The Families First Coronavirus Response Act (FFCRA) was signed into law on March 18, 2020 and includes both the Emergency Paid Sick Leave Act, which provides for paid sick leave, as well as the Emergency Family and Medical Leave Expansion Act, which provides for expanded paid leave.  The Act provides employers relief in the form of tax credits to offset the cost of wages.

Employer Procedure

Guidance for claiming the tax credits will come from the Internal Revenue Service (IRS) in the next 2 weeks. However, we already know a key component of how the tax credits will work. Employers will be allowed to retain payroll tax payments equal to the amount of qualifying paid sick and child care leave that the employer pays, as laid out below.

The tax payments the employer may retain include both the employee and employer shares of social security and Medicare taxes for ALL employees whether or not those employees were paid qualifying sick and child care leave. If the paid sick and child care leave exceed the amount of payroll taxes due, the employer can request a payment from the IRS.

Qualifying employers include all American businesses with fewer than 500 employees. According to the IRS, “The legislation will enable employers to keep their workers on their payrolls, while at the same time ensuring that workers are not forced to choose between their paychecks and the public health measures needed to combat the virus.”

Dawn Rahme Oklahoma City tax law

Dawn M. Rahme is a Director and a member of the Firm’s Executive Committee. She represents individuals and businesses in an array of transactional matters with a focus on assisting corporations, partnerships and individuals in general tax planning.

Scenario A: Paid Sick Leave 

Employee is unable to work because the employee is quarantined, and/or experiencing COVID-19 symptoms, and seeking a medical diagnosis.

Employee Benefit:

100% pay for 10 days (up to 80 hours)

Employer Paid Sick Leave Tax Credit:

Eligible employers may receive a refundable sick leave credit for sick leave at the employee’s regular rate of pay, up to $511 per day and $5,110 in the aggregate, for a total of 10 days

Scenario B: Emergency Paid Sick Leave 

Employee is unable to work because of a need to care for an individual subject to quarantine, to care for a child whose school is closed or child care provider is unavailable for reasons related to COVID-19, and/or the employee is experiencing substantially similar conditions as specified by the U.S. Department of Health and Human Services.

Employee Benefit:

2/3 pay for 10 days (up to 80 hours)

Employer Paid Sick Leave Tax Credit:

Eligible employers will receive a payroll tax credit for 100% of employee’s qualified sick leave, capped at $200 per day for 10 days ($2,000 total); plus eligible employers may receive a tax credit determined based on costs to maintain health insurance coverage for the eligible employee during the leave period.

Self-Employed:

Equivalent income tax credit amounts are available to self-employed individuals under similar circumstances.

Scenario C: Emergency FMLA Expansion 

Employee who is unable to work due to a need to care for a child whose school is closed, or child care provider is unavailable for reasons related to COVID-19.

Employee Benefit:

2/3 pay for up to an additional 10 weeks

Employer Child Care Leave Tax Credit:

Eligible employers may receive a payroll tax credit of 100% of eligible wages paid, capped at $200 per day up to $10,000 per employee in total. Up to 10 weeks of qualifying leave can be counted towards the child care leave credit.

Self-Employed:

Equivalent income tax credit amounts are available to self-employed individuals under similar circumstances.


For more information on this alert and its impact on your business, please call 405.606.4770 or email me.

Keep up with our ongoing COVID-19 resources, guidance and updates at our RESOURCE CENTER.

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DOL seeks public input on Family First Coronavirus Response Act

Wage and Hour release graphicThe U.S. Department of Labor (DOL) Wage and Hour Division (WHD) reached out on Monday seeking pubic input on how to implement The Families First Coronavirus Response Act (FFCRA). The feedback will be used to “assist employers and employees in understanding their responsibilities and rights under the FFCRA,” according to the release from the DOL’s Wage and Hour division.

Message from the U.S. Department of Labor Wage and Hour Division release:

The U.S. Department of Labor will be hosting a national online dialogue to provide employers and employees with an innovative opportunity to offer their perspective as the Department develops compliance assistance materials and outreach strategies related to the implementation of the Families First Coronavirus Response Act (FFCRA).

The ideas and comments gathered from this dialogue will inform compliance assistance guidance, resources, and tools, as well as outreach approaches, that assist employers and employees in understanding their responsibilities and rights under the FFCRA.

We need your input by March 29, 2020. Anybody who is interested can participate online at https://ffcra.ideascale.com from March 23 through March 29, 2020 or can join a Twitter chat hosted by @ePolicyWorks on March 25, 2020 at 2 p.m. using the hashtag #EPWChat.

WHD is initiating and inviting public engagement for one week via ePolicyWorks Online Dialogue Communities, which helps policymakers collect feedback through online crowdsourcing and social media platforms.

President Trump signed FFCRA into law on Wednesday, Mar 18. It requires certain employers to provide employees with expanded family and medical leave for specified reasons related to COVID-19. WHD is tasked with administering and enforcing these provisions, which will apply from their effective date through the end of the year.

For more information on this alert and its impact on your business and employees, please call 405.235.4100 or email us.

Keep up with our ongoing COVID-19 resources, guidance and updates at our RESOURCE CENTER.

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Oklahoma Governor Announcement: Healthcare occupational licenses extended during the emergency

By Phillips Murrah attorney Mary Holloway Richard

Announcement for all Licensed Healthcare Providers regarding Expiration of Licenses

Oklahoma Opioid Decision by Phillips Murrah healthcare attorney Mary Holloway

Mary Richard is recognized as a pioneer in healthcare law in Oklahoma. She has represented institutional and non-institutional providers of health services, as well as patients and their families.

On March 17, 2020, Governor Stitt issued Amended Executive Order 220-7 which provided additional responses to the current pandemic.  The Order applies to all 77 counties and positions state agencies and departments to respond to the emergency with new hires and purchases as necessary.  One portion of the order focuses on the providers in the front lines—physicians and nurses.  While there is much for health care providers to worry about—office closings, staff, patient access to providers, and safety—providers will likely not be thinking about the status of license applications or the need to renew them.  This executive order offers a grace period by providing the following guidance to providers with those state licensure issues:

Any medical professional who holds a license, certificate, or other permit issued by any state that is a party to the Emergency Management Compact evidencing the meeting of qualifications for the practice of certain medical services, as more particularly described below, shall be deemed licensed to practice in Oklahoma so long as this Order shall be in effect, subject to the following conditions:

    1. This shall only apply to Medical (MD) and Allied Licenses issued by the Board of Medical Licensure and Supervision, Licenses issued by State Board of Osteopathic Examiners, and Licenses and Certificates issued by the Board of Nursing, all three shall collectively be referred to as “Boards”;
    2. Any medical professional intending to practice in Oklahoma pursuant to this Order, hereinafter referred to as “Applicant,” shall first apply with and receive approval from appropriate Board;
    3. It is the responsibility of each Board to verify the license status of any applicant and, upon verification of good standing, shall issue a temporary license to practice within this State; and
    4. Any applicant licensed under this Order shall be subject to the oversight and jurisdiction of the licensing Board, which includes the ability of the Board to revoke said license and to initiate any administrative or civil proceeding related to any alleged misconduct of applicant.

All occupational licensed of this type shall be extended during the emergency and shall expire fourteen (14) days following the withdrawal or termination of Amended Executive Order 2002-07.

In addition, this Executive Order, supports The Centers for Medicare and Medicaid Services’ (CMS) Section 1135 Waiver in eliminating the current requirement that a preexisting patient relationship exist in order for treatment to continue via telehealth.

Potential Legal Recourse for COVID-19 Losses

By Phillips Murrah Director, Clayton D. Ketter

The continuing uncertainty surrounding the COVID-19 global pandemic is causing significant disruption to business operations.  In addition, recent restrictions on operations is likely to further cause various businesses to lack the financial capabilities to meet ongoing obligations.  Such business may have various contractual and legal rights that may serve to ease their financial pain.  Several of these are analyzed below.

Clayton Ketter

Clayton D. Ketter is a Director and the Firm’s Litigation Practice Group Leader. Clay has extensive experience in financial restructurings and bankruptcy matters.

A. Business Interruption Insurance

The first place many businesses may look for relief when forced to temporarily close due to the COVID-19 pandemic and related government restrictions is a business interruption insurance policy.  Business interruption insurance generally compensates a business for lost income suffered in the event the business is forced to temporarily cease operations due to an unforeseen event such as a fire or natural disaster.  Some policies also provide coverage for issues with a business’s supply chain that are outside of the business’s control.

Every business interruption insurance policy will contain various exclusions from coverage.  After the SARS outbreak in 2003, it became common for insurance companies to seek to exclude from coverage losses sustained from communicable disease outbreaks, such as the current COVID-19 pandemic.  Such exclusions may prevent coverage in the current situation.

Many business interruption policies also require that covered losses be tied to physical damage to a business.  A typical example would be a business that was forced to close because its building was damaged by a fire or natural disaster.  A general slowdown in business related to a broad disaster is unlikely to meet this requirement, because there is no corresponding physical damage to the specific business.  Some policies also provide coverage when ingress or egress to a business is limited or prohibited by a governmental authority.  Those too, though, often require some specific physical damage to have been suffered.

However, the precise wording of the insurance policy, which will vary from policy to policy, is critical to determining coverage.  Even small variations in policy language can have large impacts, particularly in an unprecedented situation such as the one we are currently facing.  Thus, business owners should carefully review their specific policy and seek legal counsel for any potential issues.

B. Force Majeure Clauses

Another potential source of relief for specific contractual obligations is a contractual provision known as a force majeure clause.  The term force majeure covers a broad range of provisions that generally excuse a party’s performance under a contract when external events, such as an act of god, have rendered such performance impossible.  While there is no single standard force majeure clause and they can take many forms, a common example would be a provision providing:

In the event either party is unable to perform its obligations under the terms of this Contract because of acts of god or other causes reasonably beyond its control, such party shall not be liable for damages to the other for any damages resulting from such failure to perform or otherwise from such causes.

Specific clauses may explicitly set out circumstances that constitute a force majeure event, such as strikes, wars, and natural disasters.  It is also common for provisions to set out certain obligations that are not excused by a force majeure event.  For example, commercial real property leases often provide that a tenant’s obligation to pay rent is not excused by a force majeure event.

While force majeure clauses are common, most do not explicitly provide that a global pandemic will constitute a force majeure event.  Without a specific reference, parties seeking to invoke such a provision will have to rely on general terms such as act of god.  Such general terms are subject to differing interpretation by courts.  For instance, the Oklahoma Supreme Court has defined an act of god as “some inevitable accident that could not have been prevented by human care, skill and foresight, but which results exclusively from nature’s cause, such as lightning, tempest and flood.”  City of Purcell v. Subblefield, 139 P. 290 (Okla. 1914).  Whether a global pandemic such as COVID-19 would fit within that definition remains to be seen.

Another issue with the applicability of a force majeure clause is the extent that performance was affected.  Specific clauses will use a variety of standards to excuse performance, such as impracticability, impossibility, or illegality.  These differences will have a significant impact on whether a force majeure clause applies.  For example, restrictions on how businesses are permitted to operate in the current environment continue to evolve.  Those restrictions may make performance of a contractual obligation impracticable, but not necessarily impossible or illegal.  Thus, a business that has been statutorily restricted from operating would likely have a stronger argument that a force majeure clause applies than one whose operations have been impaired by the restrictions.

Ultimately, whether a party’s performance under a contract will be excused due to the COVID-19 pandemic is going to largely depend on the terms of the specific contract coupled with the facts of each party’s individual situation.  Thus, it is recommended that a contracting party carefully review the language of the contract at issue with a legal professional.

C. Governmental Taking

There may be other contractual provisions that could also provide relief.  For instance, it is common for commercial real property leases to excuse performance when the underlying property has been taken by condemnation or eminent domain.  An enterprising tenant could attempt to argue that governmental restrictions on the business’s operations constitute a condemnation because the tenant’s rights have been “taken” for the greater good of the public.  Such arguments appear to be completely untested.  However, as with the other issues raised herein, the ability to utilize such arguments is going to heavily depend on the specific terms of the agreement at issue.

D. Chapter 11 Bankruptcy

While the forced closure of a business may result in a general reduction in certain contingent expenses, fixed costs such as rent and loan payments are likely to continue.  Upon reopening, many business, despite being profitable, are likely to face liquidity issues due to the temporary cessation in income.  For such businesses, the first step should be to attempt to reach a consensual resolution whereby the outstanding obligations are restructured by agreement.  However, when an out of court workout cannot be reached, a bankruptcy under Chapter 11 may present a viable option.

Chapter 11 is designed to allow a debtor to restructure its debts so that it can repay creditors in an orderly manner.  Often, this involves extending the period for repayment.  For instance, a business that is facing a large amount of debts currently due, might be able through a Chapter 11 bankruptcy to repay those debts over time through a series of payments.  Thus, Chapter 11 may provide an otherwise profitable businesses that has incurred substantial debts as a result of the current crisis a path to continue operating and repay its debts in a structured manner.

E. Conclusion

Ultimately, a party’s rights and obligations will depend on the specific facts and circumstances at issue, including the language of the parties’ agreement.  To the extent a business is facing such issues due to the current pandemic and associated response, it is advisable to discuss the specific situation with a qualified legal professional.

Disaster Loan Info: U.S. Small Business Administration (SBA) lending programs

[THIS ARTICLE IS OUT OF DATE. PLEASE SEE UPDATED INFORMATION HERE.]

 


By Phillips Murrah attorney Kendra M. Norman

SBA Loans

The U.S. Small Business Administration (SBA) has several lending programs. A full list of the loan programs offered by the SBA and eligibility requirements can be found here, however its main programs are as follows:

Kendra Norman Web

Kendra M. Norman represents individuals and businesses in a broad range of transactional matters.

General Small Business Loans 7(a)

This is the SBA’s main lending program. This loan that can be used for various business expenses including expansion/renovation/new construction; purchase of land or buildings; refinancing of debt for compelling reasons; a seasonal line of credit; etc. While the lenders participating have unique eligibility requirements, generally the business must be an officially registered for-profit business, do business in the United States, the business owner must have invested equity into the business, and the business must have exhausted its financing options such that it cannot obtain funds from any other financial lender. Assuming a 3.25% market prime rate (effective March 16, 2020), the SBA 7(a) loan rates are 6% to 8%.

 Real Estate & Equipment Loans: CDC/504

The CDC/504 Loan is for business borrowers looking to buy land, buildings or major equipment with long-term, fixed-rate financing. To be eligible for a 504 loan, your business must be operated for profit and have a tangible net worth not more than $15 million, and an average net income of $5 million or less after federal income taxes for the preceding two years prior to application. Loans cannot be made to businesses engaged in nonprofit, passive or speculative activities.

 Assuming a 3.25% market prime rate (effective March 16, 2020), the SBA CDC/504 loan rates are 3.63% to 6.112%.

Economic Injury Disaster Loans

Congress has approved additional SBA loan funding under the Coronavirus Preparedness and Response Supplemental Appropriations Act. Therefore, the SBA is offering designated states and territories low-interest Economic Injury Disaster Loans for working capital to small businesses suffering substantial economic injury as a result of the Coronavirus (COVID-19).

SBA’s Economic Injury Disaster Loans offer up to $2 million in assistance and can provide vital economic support to small businesses to help overcome the temporary loss of revenue they are experiencing. These loans may be used to pay fixed debts, payroll, accounts payable and other bills that cannot be paid because of the disaster’s impact. The interest rate is currently 3.75% for small businesses and 2.75% for non-profits. The SBA offers loans with long-term repayments up to a maximum of 30 years. Terms are determined on a case-by-case basis, based upon each borrower’s ability to repay.

On March 17th, Governor Kevin Stitt submitted a request to the SBA for a declaration under the Economic Injury Disaster Loan Program. On March 20th, the SBA issued the declaration making Oklahoma businesses affected by COVID-19 eligible to apply for the SBA Economic Injury Disaster loans. You can fill out the loan application will here. The Oklahoma Department of Commerce has issued SBA Loan FAQs here.

 

 

(UPDATE Mar19) Emergency Coronavirus Response Bill: Employers Must Provide Paid Leave To Employees Impacted by COVID-19

By Lauren Barghols Hanna

Phillips Murrah attorney Lauren Hanna

Lauren Barghols Hanna

On March 18, President Trump signed the Families First Coronavirus Response Act into law. It applies to all private employers with fewer than 500 employers.  Paid sick time will be permitted to employees regardless of tenure, while employees with at least 30 days on the job will be eligible for the amended FMLA leave connected to the coronavirus.

We expect the effective date for compliance will be April 2, 2020. We will continue to advise as regulations are released.

As of publication, there are more than 240,000+ confirmed cases of COVID-19, the respiratory disease caused by the novel coronavirus, in 135 countries around the world, with the United States currently confirming more than 11,500+ cases.  On Friday, March 13, 2020, President Trump declared a national state of emergency in response to this pandemic.  In response, the Department of Labor, CDC, OSHA, and the EEOC have issued helpful guidance for employers seeking to clarify permitted/required office safety measures and leave obligations applicable to employers and offices affected by the coronavirus.

In addition to ensuring free coronavirus testing regardless of insurance coverage and food assistance for needy families, the Coronavirus Response Act provides for expansive and unprecedented employment protections for eligible individuals impacted by COVID-19 who work for employers that employ fewer than 500 employees, including:

  • Paid sick time (up to 80 hours or two weeks of wages)
  • Family and Medical Leave (up to 12 weeks—10 of which shall be paid by the employer)

The below-described employee leave programs and protections must be implemented by covered employers (those who employ fewer than 500 employees) soon after enactment—so employers should begin drafting policies and procedures for full implementation now.

Paid Sick Time

The Act provides that all public employers and all private employers that employ fewer than 500 employees must immediately provide eligible full-time and part-time employees who are unable to work or telework due to the coronavirus up to 80 hours of paid sick time (full-time employees) or 2 weeks of wages (part-time employees), regardless of how long the employee has been employed by an employer.

Although all employers with fewer than 500 employees are covered by the current version of the Act, the Secretary of Labor will have the option of exempting certain small businesses with fewer than 50 employees.  Employers have the authority to exempt certain health care providers and emergency responders from the definition of “eligible employees” under the Act.

Paid sick time may be used by an employee if:

  • Employee must self-isolate after diagnosis with coronavirus or to obtain diagnosis or care for the symptoms of coronavirus,
  • Employee’s presence in the community may jeopardize the health of others because they have been exposed to or have the symptoms of the coronavirus,
  • Employee must care for an individual who must self-isolate after diagnosis with coronavirus or who must obtain medical diagnosis or care related to the coronavirus.
  • Employee must care for their child(ren) if their school or childcare is closed due to the coronavirus or they have been exposed to the coronavirus

All paid sick time must be paid at 100% of the employer’s regular wages for absences related to the employee’s need to self-isolate or seek medical care related to their own exposure to coronavirus.  However, any sick time provided for an employee to care for a family member in connection with exposure to the coronavirus or school/childcare closings must be paid at two-thirds of the employee’s regular wages.

Paid sick time will be capped at $511/day and up to $5,110 total for absences associated with an employee’s own diagnosis or need to quarantine, with caps of $200/day and up to $2,000 total for all other paid sick time.

An affected employee may first use this paid sick time for eligible purposes related to the coronavirus pandemic.  Employers may not require an employee to use otherwise accrued sick time or other paid leave before using the paid sick time granted by the Act.  Further, an employer may not require that an employee search for or find a replacement to cover the hours taken by the employee as paid sick time.

Employers are prohibited from taking any disciplinary action or discriminating in any manner against an employee who takes leave in accordance with the Act and has filed a complaint or instituted any proceeding under or related to this Act or has testified or is about to testify in any such proceeding.

Information regarding employee eligibility for paid leave under the Act must be posted where employee notices are customarily posted. The Secretary of Labor will make available a compliant model notice no later than 7 days after the date of enactment of the Act.

An employer who does not permit its eligible employees to take sick leave time under the Act will be deemed to be in violation of the Fair Labor Standards Act and be subject to penalties for that violation.

Emergency Paid Leave—Amendment to the Family and Medical Leave Act

The Act also amends the federal Family and Medical Leave Act and creates a new subsection of paid medical leave under the FMLA to provide up to 12 weeks of family and medical sick leave during a public health emergency related to the coronavirus to all eligible employees, 10 weeks of which must be paid by the employer at a rate of no less than two-thirds of the employee’s usual pay.  This extended paid leave is available only to employees who work for companies employing fewer than 500 employees.

Although all employers with fewer than 500 employees are covered by the current version of the Act, the Secretary of Labor will have the option of exempting certain small businesses with fewer than 50 employees, if it determines that providing paid leave under the Act “would jeopardize the viability of the business as a going concern.”  Additionally, employers with fewer than 50 employees would not be subject to private lawsuits filed by employees for violations of this Act–only actions brought directly by the Department of Labor.

The first 10 days for which an eligible employee impacted by the coronavirus takes the public health emergency FMLA leave related to the coronavirus may be unpaid.  Alternatively, an employee may elect to substitute any accrued vacation leave, personal leave, or medical or accrued sick leave or the above-described paid sick time for the unpaid leave.  However, an employer may not require an employee to substitute paid leave for unpaid public health emergency FMLA leave related to the coronavirus under the Act.

An employee will be eligible for this public health emergency FMLA leave related to the coronavirus if they have been on the job for at least 30 days and the employee needs to stay at home because their child(ren)’s school or childcare facility has closed unexpectedly due to the coronavirus.

Employers have the authority to exempt certain health care providers and emergency responders from the definition of “eligible employees” under the Act.

Examples

Scenario 1:  A long-time employee of a private company with fewer than 500 employees receives news that their elderly parent must self-isolate due to potential exposure to the coronavirus at a doctor appointment.  Employee’s parent is worried that they will not be able to perform all self-care or prepare meals if their friends and home aide must stay away during the incubation period.  Employee decides to move in with their elderly parent for the two-week incubation period to take care of their parent’s daily needs and potentially help if they become symptomatic.  Employee is absent for the duration of their parent’s two week incubation period and then Employee promptly returns to work.

Wages:  Employee would be paid 2/3 of their typical wages (subject to the above-described caps) for the 2 weeks that Employee was caring for their parent as a Paid Sick Time benefit.

 

Scenario 2:  Long-time Employee of a private company with fewer than 500 employees travels to Washington for spring break, returns home, and then learns of a positive test in the area they stayed on spring break.  Based on news reports and a health department press release, Employee believes they may have been in close proximity to one or more persons with a positive COVID-19 test.  Employee and family self-isolate and wait to take the COVID-19 test.  Employee eventually tests negative, but employee’s 17 year old child tests positive.  Employee is absent a total of two weeks for their own self-isolation and another one week caring for their child until the child makes a full recovery.

Wages:  Employee would be paid 100% of their regular wages for the first 80 hours they were absent from work (subject to the above-described caps) due to self-isolation due to their own exposure.  Employee will not be eligible for extended FMLA leave caring for the Employee’s child beyond that two weeks, unless the child’s school is also closed during that period.

 

Scenario 3:     Employee hired sixty days ago has three children and all three children have a school closure from March 13, 2020 through April 15, 2020.  There has been no known exposure to the coronavirus or positive diagnoses of COVID-19 at the children’s school.

Wages: Employee would be eligible for payment of 2/3 of their wages during from March 13, 2020 to March 29, 2020 as paid sick time and 2/3 of their wages (all subject to the above-described caps) from March 30, 2020 to April 15, 2020 under the amended Family and Medical Leave Act.

 

Scenario 4:  Employee hired 5 days ago recently traveled through a major airport and begins to develop symptoms of a respiratory infection.  Employee decides to stay at home until they can obtain testing for coronavirus.  Employee ends up testing positive for COVID-19 and must be absent from work for a total of five weeks.

Wages:  Employee would be eligible for payment of 100% of their wages (subject to the above-described caps) for the first two weeks of absences.  After that time, Employee is not eligible for any further paid leave or job protection under the amended Family and Medical Leave Act because they were not employed by the company for at least 30 days prior to their absence.  Before immediately terminating employment, however, the Company must consider whether the Employee may be eligible for other paid/unpaid leave benefits through established company policies, state or local paid leave laws or the ADA (and state equivalents).

 

Scenario 5:  A part-time Employee hired 15 days ago must stay at home to care for their child who has not been exposed to the coronavirus, but whose childcare facility has closed due to multiple diagnoses of COVID-19 in your community.  Employee advises that they cannot return to work for at least a month, as that is when the childcare facility will re-open.

Wages:  Employee is entitled to 2/3 of their usual wages for all scheduled/typically-worked hours over a two-week time period.  After the two weeks have elapsed, the Employee is not eligible for additional paid leave under the amended Family and Medical Leave Act, as they have not worked for the Company at least 30 days.  Employee also would likely not be eligible for ADA or other state or local sick/disability leave, as their absence was not caused by their own or their immediate family’s illness.  Before terminating employment, however, the Company needs to review whether the Employee may be eligible for unpaid leave through any established Company policy or course of performance or state/local leave entitlement.

Refundable Tax Credits for Employers

The Act provides for refundable tax credits for employers who are required to provide the above-described paid sick time and paid family and medical leave.  These refundable tax credits will be allowed against the employer’s portion of Social Security taxes.

Under the Act, employers will be entitled to a refundable tax credit equal to 100% of the qualified sick leave wages paid by employers for each calendar quarter for paid sick time. Sick leave wages will be capped at $511 per day (or $200 per day if the leave is for caring for a family member or child) for up to 10 days per employee in each calendar quarter.

Similarly, employers will receive a refundable tax credit equal to the qualified family leave wages paid by employers for each calendar quarter in accordance with the amended Family and Medical Leave act. However, the family leave wages will be capped at $200 per day for each individual up to $10,000 total per calendar quarter.

Prepare Now for Implementation Within 15 Days

Employers will have to move quickly to achieve full compliance with their paid leave obligations.  The Department of Labor has promised additional guidance soon after enactment.

As with any national health emergency, this situation is fluid and employer best practices evolve with increased understanding of the spread of the coronavirus, both throughout the United States and within specific communities.   Based on today’s statements from both the Senate Majority Leader and the President, it is highly likely that additional measures affecting employers will be put forward by the Senate this week.

Phillips Murrah’s labor and employment attorneys continue to monitor new developments and stand ready to assist your company timely and efficiently implement these expansive new leave obligations as they are signed into law.

 

To find out more about how this affects your business, please contact:

Lauren Barghols Hanna

Oklahoma City
lbhanna@phillipsmurrah.com
405.606.4732

Janet A. Hendrick

Dallas
jahendrick@phillipsmurrah.com
214.615.6391

Kathryn D. Terry

Oklahoma City
kdterry@phillipsmurrah.com
405.552.2452

Byrona J. Maule

Oklahoma City
bjmaule@phillipsmurrah.com
405.552.2453

Lauren Symcox Voth

Oklahoma City
lsvoth@phillipsmurrah.com
405.606.4740

 

President Signs Amended Coronavirus Response Act Providing Paid Sick Leave to Eligible Employees

By Lauren Barghols Hanna

Phillips Murrah attorney Lauren Hanna

Lauren Barghols Hanna

On March 18, President Trump signed the Families First Coronavirus Response Act into law. It applies to all private employers with fewer than 500 employers.  Paid sick time will be permitted to employees regardless of tenure, while employees with at least 30 days on the job will be eligible for the amended FMLA leave connected to the coronavirus.

We expect the effective date for compliance will be April 2, 2020. We will continue to advise as regulations are released.

The coronavirus relief package provides the following paid leave benefits to eligible employees:

Paid Sick Time (up to 80 hours/2 weeks paid leave)

  • Employees paid full wages for absences related to their own diagnosis/quarantine and 2/3 of wages for absences related to caring for family members or their child’s school closures
  • Caps to paid sick time are $511/day and up to $5,110 for employee’s own illness/quarantine and $200/day and up to $2,000 total for all other qualifying leave
  • Secretary of Labor has the authority to issue regulations exempting small employers (fewer than 50 employees) from providing paid sick leave. DOL regulations are expected within 7 days of enactment
  • Paid leave time available only to workers who are unable to work or telework due to a more-tightly defined coronavirus-related absence
  • Healthcare professionals and emergency responders may be excluded from eligibility
  • New cap for tax credit permitted for self-employed individuals

Paid FMLA Leave (up to 10 additional weeks of paid leave related to coronavirus emergency)

  • Paid FMLA leave available only to employees who are unable to work or telework due to caring for a minor child due to school closing or childcare unavailability
  • Paid leave capped at 2/3 of an employee’s wages, up to $200/day or $10,000 total
  • Secretary of Labor has the authority to issue regulations exempting small employers (fewer than 50 employees) from providing paid FMLA leave. DOL regulations are expected within 7 days of enactment
  • Healthcare professionals and emergency responders may be excluded from eligibility

Senator Mitch McConnell (R-KY), advised in a speech Wednesday morning just prior to voting for this Act, that he does not consider the above employee protections to go far enough to protect either individual employees or small business owners—and that the Senate will not be adjourning until additional legislation is passed to address additional needs.

Please follow this link to a more detailed article providing additional information regarding the Act and helpful scenarios explaining how leave will be paid under the Act.

Phillips Murrah’s labor and employment attorneys continue to monitor new developments and stand ready to assist your company timely and efficiently implement these new paid leave obligations and answer your other pressing employment questions arising from this national public health emergency.


To find out more about how this affects your business, please contact:

Lauren Barghols Hanna

Oklahoma City
lbhanna@phillipsmurrah.com
405.606.4732

Janet A. Hendrick

Dallas
jahendrick@phillipsmurrah.com
214.615.6391

Kathryn D. Terry

Oklahoma City
kdterry@phillipsmurrah.com
405.552.2452

Byrona J. Maule

Oklahoma City
bjmaule@phillipsmurrah.com
405.552.2453

Lauren Symcox Voth

Oklahoma City
lsvoth@phillipsmurrah.com
405.606.4740

 

Can Employers Take an Employee’s Temperature and Other COVID-19 Questions

By Lauren Symcox Voth

Lauren Voth

Lauren Symcox Voth

EEOC Publishes Guidance on Pandemic Preparedness

The World Heath Organization (WHO) has declared COVID-19 an international pandemic and as a result the Federal, Local, and State governments have declared a state of emergency across the country. Employers have received guidance from multiple sources about what to do next.  In light of the advice given by WHO, the Centers for Disease Control and Prevention (CDC), government officials, doctors, and employers should remember that they must still comply with employment laws, including the Americans with Disabilities Act (ADA).

The U.S. Equal Employment Opportunity Commission (EEOC) published its Pandemic Preparedness in the Workplace and the Americans with Disabilities Act in 2009, after the H1N1 outbreak. This guidance applies equally to the current COVID-19 pandemic. The EEOC’s guidance outlines questions and answers to guide employers before, during, and after a pandemic.

Here are highlights from the EEOC’s guidance for employers during a pandemic:

  • Employers may send home employees with COVID-19-like symptoms. If an employer sends an employee home with symptoms, employers may permit the employee to take applicable paid leave for the time off work.  At this time Non-Exempt employees are not required to be paid for any time off work.  Exempt employees must be paid for any week in which the employee performs work.  Please see our story: “House Sends Amended Coronavirus Response Act to Senate with Significantly Reduced Employee Paid Leave Protections – Vote Expected Today” for any changes related to employers’ obligations to pay employees for COVID-19 related absences.
  • Employers should not ask employees if they have COVID-19. However, employers may ask employees if they are experiencing COVID-19-like symptoms such as a fever, sore throat, cough, or shortness of breath.  Employers must maintain all employee provide health information separately with medical records in compliance with the ADA.
  • Employers may take an employee’s temperature. Under normal conditions, an employer is not permitted to take an employee’s temperature because it is considered a medical examination. However, in this pandemic the EEOC agrees that since the CDC has issued precautions to employers, employers may measure an employee’s temperature. Be aware that, according to the EEOC and CDC, some people with COVID-19 do not have a fever.
  • Avoid asking employees to disclose any condition. Employers should not ask employees to disclose any condition that may be vulnerable to COVID-19, as this is still considered a disability-related inquiry. Employees may voluntary disclose conditions that may be vulnerable to COVID-19. Employers may then engage in the interactive reasonable accommodation process and ask the employee if they require any assistance such as telecommuting or other leave as an accommodation.
  • Employers may require employees to provide a doctor’s note certifying the employee’s fitness for duty before returning to work. However, the EEOC states that employers must be flexible and open to other approaches for obtaining a fitness for duty certification.  Doctors will likely be overwhelmed and not able to provide proper documentation immediately or documentation may be on standard return to work forms.

Employers can view the full guidance on Pandemic Preparedness at: https://www.eeoc.gov/facts/pandemic_flu.html#q6.

An EEOC summary on What You Should Know About the ADA, the Rehabilitation Act, and COVID-19 can be found here:  https://www.eeoc.gov/eeoc/newsroom/wysk/wysk_ada_rehabilitaion_act_coronavirus.cfm

 

House Sends Amended Coronavirus Response Act to Senate with Significantly Reduced Employee Paid Leave Protections – Vote Expected Today

banner for coronavirus breaking news red banner

By Lauren Barghols Hanna

Phillips Murrah attorney Lauren Hanna

Lauren Barghols Hanna

Late last evening, the U.S. House of Representatives passed an amended version of the Families First Coronavirus Response Act, originally passed by the House on Saturday.  Although the amended bill was labeled as “technical corrections,” it makes broad substantive changes to the paid leave protections originally provided to employees.

Some provisions remain the same.  The amended Act still applies to all private employers with fewer than 500 employers.  Paid sick time will still be permitted to employees regardless of tenure, while employees with at least 30 days on the job will be eligible for the amended FMLA leave connected to the coronavirus.

However, the amended Act made several important revisions, primarily acting to reduce and restrict the benefits previously afforded employees:

Paid Sick Time (up to 80 hours/2 weeks paid leave)

  • Secretary of Labor now has the authority to issue regulations exempting small employers (fewer than 50 employees) from providing paid sick leave
  • Clarifies that paid leave time available only to workers who are unable to work or telework due to a more-tightly defined coronavirus-related absence
  • Healthcare professionals and emergency responders may be excluded from eligibility
  • Introduces new caps to paid sick time ($511/day and up to $5,110 for employee’s illness/quarantine and $200/day and up to $2,000 total for all other qualifying leave)
  • New cap for tax credit permitted for self-employed individuals

Paid FMLA Leave (up to 10 additional weeks of paid leave related to coronavirus emergency)

  • Extended paid FMLA leave is no longer available to employees for their own COVID-19 treatment or quarantine or care for their family members.
  • Paid FMLA leave available only to employees who are unable to work or telework due to caring for a minor child due to school closing or childcare unavailability
  • Healthcare professionals and emergency responders may be excluded from eligibility
  • Tightens the definition of “parent” to remove prior coverage for employees caring for next of kin and grandchildren
  • Paid leave capped at 2/3 of an employee’s wages, up to $200/day or $10,000 total

The bill is set to be taken up by the Senate this morning, with some reports indicating that the Senate is prepared to adopt it in its current form, allowing President Trump to enact it without the delay of a typical reconciliation process.

Phillips Murrah’s labor and employment attorneys continue to monitor new developments and stand ready to assist your company timely and efficiently implement these new paid leave obligations as soon as the final bill is signed into law.

 

Emergency Coronavirus Response Bill: Employers Must Prepare for Potential Paid Leave Obligations

By Lauren Barghols Hanna

Phillips Murrah attorney Lauren Hanna

Lauren Barghols Hanna

As of publication, there are 167,517 confirmed cases of COVID-19, the respiratory disease caused by the novel coronavirus, in 135 countries around the world, with the United States currently confirming more than 3,000 cases.  On Friday, President Trump declared a national state of emergency in response to this pandemic.  In response, the Department of Labor issued helpful Q&A guidance for employers seeking to clarify current payroll and leave obligations to employees and offices affected by the coronavirus.

On Saturday, the U.S. House of Representatives approved the Families First Coronavirus Response Act—an emergency spending bill that provides free coronavirus screening tests and paid employment leave for individuals affected by COVID-19.

The Families First Coronavirus Response Act (H.R. 6201) received bipartisan support and has already received support from President Trump, who tweeted Friday that he “look[s] forward to signing the final Bill, ASAP!”  Sen. Mitch McConnell (R-Ky) has also advised that he believes “the vast majority of senators in both parties will agree we should act swiftly to secure relief for American workers, families, and small businesses.”  The Senate is expected to consider the bill early this week.

In addition to ensuring free coronavirus testing regardless of insurance coverage, the Coronavirus Response Act provides for expansive and unprecedented employment protections for eligible individuals impacted by COVID-19 who work for employers that employ fewer than 500 employees, including:

  • Paid sick time (up to 80 hours or two weeks of wages)
  • Family and Medical Leave (up to 12 weeks—10 of which shall be paid by the employer)

As currently drafted, these employee leave programs and protections must be implemented by covered employers (those who employ fewer than 500 employees) no later than 15 days after enactment—so companies should assess potential implementation challenges now, while waiting for the final version to be passed by the Senate and signed into law.

Paid Sick Time

The Act provides that all public employers and all private employers that employ fewer than 500 employees must immediately provide eligible full-time and part-time employees affected by coronavirus up to 80 hours of paid sick time, regardless of how long the employee has been employed by an employer.

Paid sick time may be used by an employee if:

  • Employee must self-isolate after diagnosis with coronavirus or to obtain diagnosis or care for the symptoms of coronavirus,
  • Employee’s presence in the community may jeopardize the health of others because they have been exposed to or have the symptoms of the coronavirus,
  • Employee must care for their child(ren) if their school or childcare is closed due to the coronavirus or they have been exposed to the coronavirus
  • Employee must care for a family member who must self-isolate after diagnosis with coronavirus or who must obtain medical diagnosis or care related to the coronavirus.

All paid sick time must be paid at 100% of the employee’s regular wages for absences related to the employee’s need to self-isolate or seek medical care related to their own exposure to coronavirus.  However, any sick time provided for an employee to care for a family member in connection with exposure to the coronavirus or school/childcare closings must be paid at two-thirds of the employee’s regular wages.

With respect to any employer that currently provides paid leave, the paid sick time under this Act must be in addition to the existing paid leave—the employer may not change existing paid leave after enactment of the Act to avoid this provision.  Further, the Act specifically provides that it does not preempt any existing state or local paid sick leave benefits.

An affected employee may first use this paid sick time for eligible purposes related to the coronavirus pandemic.  Employers may not require an employee to use otherwise accrued sick time or other paid leave before using the paid sick time granted by the Act.  Further, an employer may not require that an employee search for or find a replacement to cover the hours taken by the employee as paid sick time.

Employers are prohibited from taking any disciplinary action or discriminating in any manner against an employee who takes leave in accordance with the Act and has filed a complaint or instituted any proceeding under or related to this Act or has testified or is about to testify in any such proceeding.

Notice Requirements

Information regarding employee eligibility for paid leave under the Act must be posted where employee notices are customarily posted. The Secretary of Labor will make available a compliant model notice no later than 7 days after the date of enactment of the Act.

Penalties

An employer who does not permit its eligible employees to take sick leave time under the Act will be deemed to be in violation of the Fair Labor Standards Act and be subject to the penalties for that violation.  An employer who willfully discriminates or retaliates against an employee in connection with this Act will be deemed to have violated Section 15(a)(3) of the FLSA and will be subject to the penalties associated with that violation.

Emergency Paid Leave—Amendment to the Family and Medical Leave Act

As approved by the House of Representatives, the Act amends the federal Family and Medical Leave Act and creates a new subsection of paid medical leave under the FMLA to provide up to 12 weeks of family and medical sick leave during a public health emergency related to the coronavirus to all eligible employees, 10 weeks of which must be paid by the employer at a rate of no less than two-thirds of the employee’s usual pay.  This extended paid leave is available only to employees who work for companies employing fewer than 500 employees.

Although all employers with fewer than 500 employees are covered by the current version of the Act, the Secretary of Labor will have the option of exempting certain small businesses with fewer than 50 employees, if it determines that providing paid leave under the Act “would jeopardize the viability of the business as a going concern.”  Additionally, employers with fewer than 50 employees would not be subject to private lawsuits filed by employees for violations of this Act–only actions brought directly by the Department of Labor.

The first 14 days for which an eligible employee impacted by the coronavirus takes leave may be unpaid.  Alternatively, an employee may elect to substitute any accrued vacation leave, personal leave, or medical or accrued sick leave or the above-described paid sick time for the unpaid leave.  However, an employer may not require an employee to substitute paid leave for leave under the Act.

An employee will be eligible for this emergency paid sick leave if they have been on the job for at least 30 days and:

  • The employee needs to be quarantined for potential exposure to or treated for COVID-19,
  • The employee needs to stay home from work to care for a family member quarantined due to exposure to or symptoms consistent with COVID-19, or
  • The employee needs to stay at home because their child(ren)’s school or childcare facility has closed unexpectedly due to the coronavirus.

Certain health care providers and emergency responders are not included within the definition of “eligible employees” under the Act.

Examples

 

Scenario 1:  A long-time employee of a private company with fewer than 500 employees receives news that their elderly parent must self-isolate due to potential exposure to the coronavirus at a doctor appointment.  Employee’s parent is worried that they will not be able to perform all self-care or prepare meals if their friends and home aide must stay away during the incubation period.  Employee decides to move in with their elderly parent for the two-week incubation period to take care of their parent’s daily needs and potentially help if they become symptomatic.  Employee is absent for the duration of their parent’s two week incubation period and then Employee promptly returns to work.

Wages Employee would be paid 2/3 of their typical wages for the 2 weeks that Employee was caring for their parent as a Paid Sick Time benefit.

 

Scenario 2: Long-time Employee of a private company with fewer than 500 employees travels to Washington for spring break, returns home, and then learns of a positive test in the area they stayed on spring break.  Based on news reports and a health department press release, Employee believes they may have been in close proximity to one or more persons with a positive COVID-19 test.  Employee and family self-isolate and wait to take the COVID-19 test.  Employee eventually tests negative, but employee’s 17 year old child tests positive.  Employee is absent a total of two weeks for their own self-isolation and another one week caring for their child until the child makes a full recovery.

Wages:  Employee would be paid 100% of their regular wages for the first 80 hours/2 weeks they were absent from work due to self-isolation due to their own exposure.  Employee will also receive 2/3 of their typical wages for the third week while caring for their child under the Emergency Paid Leave amendment to the Family and Medical Leave Act.

 

Scenario 3: Employee hired sixty days ago has three children and all three children have a school closure from March 13, 2020 through April 15, 2020.  There has been no known exposure to the coronavirus or positive diagnoses of COVID-19 at the children’s school.

Wages: Employee would be eligible for payment of 2/3 of their wages during from March 13, 2020 to March 29, 2020 as paid sick time and 2/3 of their wages from March 30, 2020 to April 15, 2020 under the amended Family and Medical Leave Act.

 

Scenario 4: Employee hired 5 days ago recently traveled through a major airport and begins to develop symptoms of a respiratory infection.  Employee decides to stay at home until they can obtain testing for coronavirus.  Employee ends up testing positive for COVID-19 and must be absent from work for a total of five weeks.

Wages:  Employee would be eligible for payment of 100% of their wages for the first two weeks of absences.  After that time, Employee is not technically eligible for any further paid leave or job protection under the amended Family and Medical Leave Act because they were not employed by the company for at least 30 days prior to their absence.  Before immediately terminating employment, however, the Company must consider whether the Employee may be eligible for other paid/unpaid leave benefits through established company policies, state or local paid leave laws or the ADA (and state equivalents).

 

Scenario 5:  A part-time Employee hired 15 days ago must stay at home to care for their child who has not been exposed to the coronavirus, but whose childcare facility has closed due to multiple diagnoses of COVID-19 in your community.  Employee advises that they cannot return to work for at least a month, as that is when the childcare facility will re-open.

Wages:  Employee is entitled to 2/3 of their usual wages for all scheduled/typically-worked hours over a two-week time period.  After the two weeks have elapsed, the Employee is not eligible for additional paid leave under the amended Family and Medical Leave Act, as they have not worked for the Company at least 30 days.  Employee also would likely not be eligible for ADA or other state or local sick/disability leave, as their absence was not caused by their own or their immediate family’s illness.  Before terminating employment, however, the Company needs to review whether the Employee may be eligible for unpaid leave through any established Company policy or course of performance or state/local leave entitlement.

Refundable Tax Credits for Employers

The Act provides for refundable tax credits for employers who are required to provide the above-described paid sick time and paid family and medical leave.  These refundable tax credits will be allowed against the employer’s portion of Social Security taxes.

Under the Act as currently written, employers will be entitled to a refundable tax credit equal to 100% of the qualified sick leave wages paid by employers for each calendar quarter for paid sick time. Sick leave wages will be capped at $511 per day (or $200 per day if the leave is for caring for a family member or child) for up to 10 days per employee in each calendar quarter.

Similarly, employers will receive a refundable tax credit equal to 100% of the qualified family leave wages paid by employers for each calendar quarter in accordance with the amended Family and Medical Leave act. However, the family leave wages will be capped at $200 per day for each individual up to $10,000 total per calendar quarter.

The specifics of the tax credit allowances and when businesses will be able to take advantage of these credits will likely change as the Senate considers the bill this week.

Prepare Now for Potential Implementation Challenges

As with any national health emergency, this situation is fluid and employer best practices evolve with increased understanding of the spread of the coronavirus, both throughout the United States and within specific communities.   Based on the bipartisan support and forward-looking statements from both the Senate Majority Leader and the President, it is highly likely that a version of the Act providing paid sick time and extended paid sick leave for companies with fewer than 500 employees will be enacted in the near future.  The Department of Labor has promised additional guidance upon enactment, but the current bill only allows companies 15 days after enactment to achieve full compliance with their paid leave obligations.

Phillips Murrah’s labor and employment attorneys continue to monitor new developments and stand ready to assist your company timely and efficiently implement these expansive new leave obligations as they are signed into law.

Emergency Coronavirus Response Bill: Brief Overview of Employer-Paid Sick Leave Obligations

By Lauren Barghols Hanna

Phillips Murrah attorney Lauren Hanna

Lauren Barghols Hanna

As of publication, there are 167,517 confirmed cases of COVID-19, the respiratory disease caused by the novel coronavirus, in 135 countries around the world, with the United States currently confirming more than 3,000 cases.  On Friday, President Trump declared a national state of emergency.  In response, the Department of Labor issued helpful Q&A guidance for employers seeking to clarify current payroll and leave obligations to employees and offices affected by the coronavirus.

On Saturday, the U.S. House of Representatives approved the Families First Coronavirus Response Act—an emergency spending bill which would provide free coronavirus screening tests and guarantee employer-paid employment leave for individuals affected by COVID-19.  The Senate is expected to consider the bill early this coming week.

As currently drafted, the below provisions will apply to public employers and all private employers with fewer than 500 employees and may be offset by refundable tax credits. Below are the main takeaways of the employer-paid leave provisions of the bill, as it was passed by the House of Representatives:

Paid Sick Time

All employees, regardless of tenure with the company, may take up to two weeks of paid sick leave for the following reasons:

  • To self-isolate due to exposure to or symptoms of the coronavirus;
  • To care for an at-risk family member who is following a required or recommended period of self-isolation due to exposure to or symptoms of coronavirus; and
  • To care for a child of the employee, if the child’s school or childcare has been closed or is unavailable due to the coronavirus.

Employees will be paid at 100% of their regular wages to self-isolate due to exposure or to symptoms of the coronavirus and at 2/3 of their regular wages to care for a family member for such purposes or to care for a child whose school or childcare facility is closed or unavailable.

Amendment to the Family and Medical Leave Act

Employees who have worked at least 30 days may take up to 12 weeks of leave to be used in any of the circumstances outlined above in the paid sick time section.

After the employee’s first two weeks of leave, employers must provide paid leave for the duration of the employee’s need at a rate of no less than two-thirds of the employee’s usual pay.

Next Steps

As currently drafted, these employee leave programs and protections would need to be implemented by covered employers (those who employ fewer than 500 employees) no later than 15 days after enactment—so companies should begin assessing potential implementation challenges now, while waiting for the final version to be passed by the Senate and signed into law.

Phillips Murrah’s labor and employment attorneys continue to monitor new developments and stand ready to assist your company timely and efficiently implement these expansive new leave obligations as they are signed into law.  For more detailed information about this expansive new employer-paid sick leave program and examples of how paid leave would be calculated in various scenarios, please follow this link.

Coronavirus 2020: Current Guidance for US Employers

Janet Hendrick

Janet Hendrick is an experienced employment litigator who tackles each of her client’s problems with a tailored, results-oriented approach.

By Phillips Murrah Attorneys Janet Hendrick and Phoebe Mitchell

Around the globe, the number of confirmed Coronavirus cases has risen to over 81,000. Although 95% of these confirmed cases are located in China, the number in the United States has grown to 53.[1] With many unanswered questions about the virus, including concrete information on how it is contracted and spread, employers must grapple with responding to the possible repercussions of Coronavirus in the workplace.

What is Coronavirus?

According to the World Health Organization (WHO), Coronavirus is a virus that can cause respiratory issues, with symptoms ranging from those similar to the common cold, to more serious issues, such as difficulty breathing resulting in hospitalization. The elderly and those with preexisting medical problems are more likely to develop serious symptoms from Coronavirus. The incubation period, or the period of time between catching the virus and showing symptoms of the disease, ranges from 1-14 days. COVID-19, the particular strain of Coronavirus that is the subject of the current global outbreak, was previously unknown before its initial diagnosis in Wuhan, China, in December 2019. There is currently no vaccine or specific antiviral medicine to prevent or treat Coronavirus.

Phoebe B. Mitchell is a litigation attorney who represents individuals and both privately-held and public companies in a wide range of civil litigation matters.

Prevention

  • The WHO recommends the following preventative measures:
  • Regularly and thoroughly clean your hands
  • Maintain at least 3 feet distance between yourself and anyone who is coughing and sneezing
  • Avoid touching eyes, nose and mouth
  • Cover your mouth and nose with your bent elbow or a tissue when you cough or sneeze
  • Stay home if you feel unwell
  • Seek medical attention if you have a fever, cough and difficulty breathing

Considerations for Employers

Under the General Duty Clause of the Occupational Safety and Health Act (OSHA), employers must furnish “employment and a place of employment which are free from recognized hazards that are causing or likely to cause death or serious physical harm to…employees.” Although OSHA has published a general guidance for employers regarding Coronavirus, it has not published any standards specific to Coronavirus in the workplace. However, activities such as nonessential business travel to China or other areas affected by the virus could violate the General Duty Clause.  Employers should consider preventative measures to stop the spread of Coronavirus, such as providing hand sanitizer to employees and encouraging sick employees to stay home.

When an employer suspects that an employee has been exposed to Coronavirus, either by traveling to an affected area or through contact with an affected person, the employer should require the employee, including those under required or self-quarantine, to work from home, where possible, during the 14-day incubation period. For employees who cannot work remotely, employers should allow the employee to take leave consistent with the employer’s normal leave of absence policies, including permitting employees to utilize any available paid leave.   There is no requirement, however, to provide impacted employees with any additional paid leave.

Impacted employees may be eligible for job-protected unpaid leave under the Family and Medical Leave Act.  Employees who test positive for Coronavirus most likely meet the FMLA’s definition of “serious health condition” and are thus entitled to FMLA leave.  These employees may also meet the definition of a “qualified individual with a disability” under the Americans with Disabilities Act (ADA), and its state equivalents, in which case the employer, assuming covered by the ADA, must engage in the interactive process to determine if leave or another reasonable accommodation is required.

Leave eligibility for potentially affected employees who do not show symptoms of Coronavirus is less clear.  Certainly there is no requirement under the ADA or state equivalents to accommodate employees who are not ill.  And while employees are not generally entitled to FMLA leave to avoid contracting an illness, if the employee is under the continuing treatment of a health care provider, the employee may meet the test for a “serious health condition” under the FMLA. Remember that “serious health condition” includes certain forms of “continuing treatment.” “Continuing treatment” takes many forms, including a period of incapacity of more than three consecutive calendar days, and any subsequent treatment or period of incapacity relating to the same condition that also involves (i) treatment two or more times within 30 days of the first day of incapacity by a health care provider or (ii) treatment by a health care provider on at least one occasion, which results in a regimen of continuing treatment under the supervision of the health care provider. “Continuing treatment” also includes any period of absence to receive multiple treatments by a health care provider for a condition that would likely result in a period of incapacity of more than three consecutive days in the absence of medical intervention or treatment.  For employees who take leave, employers should require medical clearance before allowing the employee to return to work.

Employers should also be aware that all 50 states have laws that address quarantine and isolation.[2]

These laws grant authority to certain state government entities to control the spread of communicable illnesses, thus allowing the state government to mandate quarantines or isolation. Some of the state quarantine laws also impose a penalty on persons who escape or attempt to escape a mandated quarantine.

As with all employment law considerations, consistency is critical:  employers should treat impacted employees consistently to avoid any claim of discriminatory treatment. Any policy or employer action addressing communicable illnesses such as Coronavirus should address all such illnesses and should be applied equally to all individuals to ensure that no protected class of employees is disproportionally affected.

Employers should consult with their employment counsel for additional guidance on addressing concerns about the Coronavirus in the workplace.  Phillips Murrah’s labor and employment attorneys continue to monitor developments to provide up-to-date advice to our clients.

Janet Hendrick is a Shareholder in the Dallas office of Phillips Murrah who specializes in advising and representing employers.  Phoebe Mitchell is an Associate in the Oklahoma City office of the firm.


[1] Coronavirus disease 2019 (COVID-19) Situation Report – 37, World Health Organization (February 26, 2020), https://www.who.int/docs/default-source/coronaviruse/situation-reports/20200226-sitrep-37-covid-19.pdf?sfvrsn=2146841e_2.

[2] State Quarantine and Isolation Statutes, National Conference of State Legislatures, (February 27, 2020), https://www.ncsl.org/research/health/state-quarantine-and-isolation-statutes.aspx.