March 26, 2020;
Updated March 28, 2020 to reflect new guidance from the U.S. Department of Labor
What the Orders Say
To mitigate the impact of COVID-19 and protect the capacity of Pennsylvania’s health care system, on March 19, 2020, Governor Tom Wolf signed an Order which directs the closure of all businesses that are not “life sustaining,” regardless of whether the business is open to members of the public. This prohibition does not apply to virtual or telework operations (e.g., work from home), so long as social distancing and other mitigation measures are followed in such operations.
The Order further specified that life-sustaining businesses may remain open, but they must follow, at a minimum, the social distancing practices and other mitigation measures defined by the Centers for Disease Control to protect workers and patrons. A current list of life sustaining businesses that may remain open can be found here.
Enforcement actions against businesses that do not close physical locations began Monday, March 23, at 8:00 AM.
The Pennsylvania Department of Community & Economic Development has launched an electronic form for businesses that wish to seek an exemption from Governor Wolf’s Order. It can be found here.
On March 22, 2020 Governor Wolf directed all residents of Allegheny County, Bucks County, Chester County, Delaware County, Erie County, Monroe County, Montgomery County and Philadelphia County to stay at home except as needed to access, support, or provide life sustaining business, emergency, or government services. A copy of the Order can be found here.
This order became effective 8:00 PM on Monday, March 23, 2020, and will continue until April 6, 2020.
Changes to Your Workforce
Whether or not your business is deemed “essential,” you may be considering changes to your workforce for employee safety and in response to the undeniable economic impact of the pandemic. Such changes may include furloughing employees, laying off employees, or reducing an employee’s rate of pay/hours.
In Pennsylvania, an employer is only required to advise an employee, in writing, if it is reducing its rate of pay/hours; an employer does not need to provide an employee notice of a furlough or layoff. However, some employers may decide to provide written notice to employees of their decision, the reason, and assurance that these measures are only being taken in response to the pandemic and with the ultimate goal of returning to business as usual in the near future. We suggest you consider all available options carefully before making any decision, and refer to the following chart for an overview.
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Option
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Description
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Important Information
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Furlough
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§ Temporary suspension of employment during which employees do not receive wages
§ Those on furlough remain employed
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§ Advise employees they must not work during the furlough period and consider keeping employer issued mobile devices and limiting or cutting off email access.
§ Employee receipt of continuation of health benefits dependent on health insurance policies, plan documents and other policies or agreements with employees.
§ Employer may restrict the use of vacation/PTO during furlough.
§ Employee may be entitled to local sick pay under, for example, Pittsburgh City Code Chapter 626, known as the “Paid Sick Days Act.”
§ Employee is entitled to federal sick pay under the Families First Coronavirus Response Act “FFCRA” if employer has 500 or fewer employee. See below regarding more detail on the FFCRA.
§ Employees may receive Unemployment Compensation Insurance.
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Layoff/Termination
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A layoff is the removal of an employee from the workforce, without any guarantee of returning to work.
A termination is a complete and permanent separation of employment.
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§ Notice required if employer subject to the WARN Act.
§ Final pay due must be made no later than the next regular pay day regular payday of his employer on which such wages would otherwise be due and payable.
§ Unused vacation or PTO may need to be paid out depending on company policy.
§ You not need to pay accrued paid sick leave at time of termination or layoff.
§ If you layoff or terminate a salaried employee, you need only pay them through the final day’s work.
§ Provide timely notice regarding COBRA benefits.
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Reduction in Pay
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Reducing an employee’s hourly rate or prospective salary
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§ Ensure you pay hourly, non-exempt, non-tipped employees minimum wage. The statewide minimum wage is $7.25 per hour; however, municipalities may have higher minimum wages (there are also differently hourly rates for workers in the fast food industry and those who receive tips).
§ Reduction in exempt salary may result in the loss of the employee’s exempt status. An employer is not prohibited, however, from prospectively reducing the predetermined salary amount to be paid regularly to an exempt employee during a business or economic slowdown, provided the change is bona fide and not used as a device to evade the salary basis requirements. Such a predetermined regular salary reduction, not related to the quantity or quality of work performed, will not result in loss of the exemption, as long as the employee still receives on a salary basis at least the minimum amount required by law to be paid to exempt employees.
§ You may only reduce pay going forward, and must provide notice in writing.
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Reduction in Hours
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Reduce hours for non-exempt employees and pay only the hours worked.
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§ Take care not to reduce hours in a way that appears discriminatory – such as only for higher paid (and generally older) workers.
§ Employees may receive Unemployment Compensation Insurance.
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Work From Home
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An employee is permitted to work remotely (out of the office), generally by accessing employer files through a virtual desktop.
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§ There are no laws governing reimbursing employees for expenses when working from home in Pennsylvania. However, employers may want to consider reimbursement to their employees for such expenses as home internet, cell phone usage, printer ink, paper, and other relevant supplies. Demand proof of incurred expenses.
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Other Laws to Keep in Mind
Pittsburgh Paid Sick Days Act
On March 15, 2020, Pittsburgh City Code Chapter 626, known as the “Paid Sick Days Act,” became effective. It applies to employees who work within the geographic boundaries of the City of Pittsburgh.
The Paid Sick Days Act requires employers to provide each employee at least one hour of sick leave for every 35 hours worked for the employer within the geographic boundaries of the City of Pittsburgh. For employers with 15 or more employees, this leave must be paid at the employees’ regular rate of pay. For employers with less than 15 employees, this leave may be unpaid from March 15, 2020 until March 15, 2021. After March 15, 2021, any accrued leave under the Paid Sick Days Act must be paid.
Note that the Paid Sick Days Act does not apply to independent contractors, State or Federal employees, any member of a construction union covered by a collective bargaining unit, or seasonal employees.
Sick leave provided under the Paid Sick Days Act may be used for the following purposes:
- An employee’s mental or physical illness, injury or health condition; an employee’s need for medical diagnosis, care, or treatment of a mental or physical illness, injury or health condition; an employee’s need for preventive medical care;
- Care of a family member with a mental or physical illness, injury or health condition; care of a family member who needs medical diagnosis, care, or treatment of a mental or physical illness, injury or health condition; care of a family member who needs preventive medical care; or
- Closure of the employee’s place of business by order of a public official due to a public health emergency or an employee’s need to care for a child whose school or place of care has been closed by order of a public official due to a public health emergency, or care for a family member when it has been determined by the health authorities having jurisdiction or by a health care provider that the family member’s presence in the community would jeopardize the health of others because of the family member’s exposure to a communicable disease, whether or not the family member has actually contracted the communicable disease.
For employers with 15 or more employees, accrued leave is capped at 40 hours per calendar year. For employers with 15 or fewer employees, accrued leave is capped at 24 hours per calendar year.
Employers with paid leave policies sufficient to meet the accrual requirements of the Paid Sick Days Act are not required to provide additional sick leave provided the sick leave, provided that leave under the employer’s policy may be used for the same purposes are required by the Paid Sick Days Act. Paid leave benefits provided by an employer in excess of what is required by the Paid Sick Days Act are not subject to the requirements of the ordinance.
What notice are employers required to provide to employees?
Employers are required to display a sign at each worksite that provides notice of employee rights to sick leave under the Paid Sick Days Act, available limits, and terms of use. The sign must also provide notice that retaliation against employees who request or use sick leave. A sample sign for this purpose (Notice Form) is provided on the City’s website here.
Pennsylvania Unemployment Insurance
Where a claimant works less than his full-time hours through no fault of his own, the claimant may be potentially eligible to receive full or partial benefits, depending on his gross earnings and Partial Benefit Credit (PBC). A claimant's PBC is the amount equal to 30 percent of his Weekly Benefit Rate (WBR). Where a claimant is working less than his full-time hours and his gross earnings for a week are equal to or less than the PBC, the claimant's full WBR is payable for the week. When the claimant's gross earnings for a week exceed the PBC, the gross earnings are deducted from the sum of the WBR plus PBC to determine the amount of any partial benefits for which the claimant may be eligible. NOTE: If the claimant's gross earnings for a week are not a whole dollar amount, the earnings are rounded up to the next dollar.
New Federal Sick Leave Law
The Families First Coronavirus Response Act ("FFCRA") becomes effective April 1, 2020.
- Employers of up to 500 employees (see below for calculation method) must provide 80 hours of paid sick leave for full time employees (average hours worked over two weeks for part time) if there is work for the employee available and the 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. (This includes any government order directing people to remain at home unless they work for an essential business);
- The employee has been advised by a healthcare provider to self-quarantine due to concerns related to COVID-19;
- The employee is experiencing symptoms of COVID-19 and seeking a medical diagnosis;
- The employee is caring for an individual who is subject to an order as described in subparagraph 1 above or has been advised as described in paragraph 2 above; or
- The employee is caring for a child of such employee if the school or place of care for the child has been closed, or the childcare provider for the child is unavailable, due to COVID-19 precautions.
- If your business closed before or after April 1 due to lack of business, or if required to close pursuant to Federal, State or local directive, sick leave is not due.
- Intermittent sick leave is permitted with the consent of the employer (it is not required).
- If business closes while an employee is on FFCRA sick leave, they must be paid for leave through the date of closure.
- Businesses with less than 50 employees are potentially exempt from providing sick leave pursuant to reasons four and five above (as amended by the CARES Act) and should document any hardship presented by providing this leave (after considering the impact of potential tax credits) and wait for further guidance from the DOL.
- Employees may use FFCRA paid sick leave before using state or local paid sick leave, or accrued PTO.
- Paid leave provided prior to April 1, 2020, does not count to fulfill obligations under the FFCRA.
- Employers must require documentation in support of the reason for leave and include:
- Employee’s name, qualifying reason for requesting leave, statement that the employee is unable to work, including telework, for that reason, and the date(s) for which leave is requested; and
- Documentation including a copy of the Federal, State or local quarantine or isolation order related to COVID-19 applicable to the employee (reason 1 above) or written documentation by a health care provider advising the employee to self-quarantine due to concerns related to COVID-19 (reasons 2 to 4 above) or notice that has been posted on a government, school, or day care website, or published in a newspaper, or an email from an employee or official of the school, place of care, or child care provider (reason 5 above).
- If you intend to claim a tax credit under the FFCRA for payment of sick leave wages, you should retain the FFCRA documentation in your records.
How Much to Pay – Employees must be paid based on their required compensation as follows:
- Regular rate of pay subject to a limit of: $511 per day and $5,110 in the aggregate for a use described in paragraph (1), (2), or (3) above; or
- Two-thirds of the regular rate of pay subject to a limit of: $200 per day and $2,000 in the aggregate for a use described in paragraph (4), (5), or (6) above.
Emergency Federal Medical Leave Expansion Act
The Emergency Federal Medical Leave Expansion Act ("EFMLE") becomes effective April 1, 2020.
- The EFMLE applies under the following circumstances:
- The EFMLE applies to employers with fewer than 500 employees (see below);
- Employees must be employed at least 30 calendar days at the time leave is requested;
- The need for leave must be a Qualified Need Related to A Public Health Emergency (“PHE”);
- A PHE exists when declared by a Federal, State or local authority due to COVID-19; and
- The employee must be restored to their position upon return from leave.
- An employee can request this leave for a very narrow reason: if there is work for the employee and they are unable to work (or telework) due to the need to care for their child under 18 years of age if the child’s elementary or secondary school or place of care is closed, or the care provider of such child is unavailable, due to a PHE.
- Intermittent expanded medical leave is permitted with the consent of the employer (it is not required).
- If your business closed before or after April 1 due to lack of business or if required to close pursuant to Federal, State or local directive, expanded medical leave is not due.
- If your business closes while an employee is on expanded medical leave, employees must be paid for leave through the date of closure.
- Businesses with less than 50 employees are potentially exempt from providing sick leave pursuant to reasons four and five above (as amended by the CARES Act) and should document any hardship presented by providing this leave (after considering the impact of potential tax credits) and wait for further guidance from the DOL.
The factors are not evaluated as stand-alone. The entire relationship is reviewed in its totality.
Small businesses with fewer than 50 employees may qualify for exemption from the requirement to provide leave due to school closings or childcare unavailability if the leave requirements would jeopardize the viability of the business as a going concern.
Visit our COVID-19 Hub for ongoing updates.