Sutter O’Connell continues to fearlessly represent our clients’ interests in these difficult and trying times. We have implemented several new tools that will allow us respond quickly and decisively to your needs while safeguarding the health and safety of our employees, their families, and their communities.
The information below provides an overview of legislative changes pertinent to businesses that operate within the State of Ohio. Contact our office if you have any questions about this publication or if you need any legal services or advice on solutions to issues that may impact your business, your customers, or your employees.
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FEDERAL GOVERNMENT’S RESPONSE TO COVID-19
Changes to Employee Benefits
On April 2, the majority of employees who are working for businesses who employ less than 500 employees will receive access to substantially greater paid and job-protected leave if leave is needed to care for children who are unable to attend school or daycare. Further, all employees, regardless of how long they have been employed, will receive access to emergency sick leave pay if the employee becomes sick, isolated, or is unable to report to work as a result of COVID-19.
These significant changes are the result of the recent passage of the Families First Coronavirus Response Act, H.R. 6201, (“FFCRA”). Specifically, the FFCRA accomplishes the following:
Amends the Family Medical Leave Act (“FMLA”):
- Requires employers with less than 500 employees (who do not apply for and receive an exemption) to provide up to 12 weeks of job-protect leave to employees who have been employed at least 30 days and need time off to care for a son or daughter under 18 years of age who cannot attend school or daycare as a result of the coronavirus. Importantly, these expanded FMLA benefits do not apply to employees who need leave to care for their own illness.
- If an employee is eligible for leave under the amended FMLA, the first 10 days of their leave may be unpaid; however, the employee can choose to use accrued personal, vacation, or sick leave. The employer cannot require an employee to use accrued time. Thereafter, the employee is entitled to 2/3rds of their regular rate of pay (as defined by the FLSA) for a period of 10 weeks, with a cap at $200 per day or $10,000 in the aggregate.
Establishes Emergency Sick Pay Leave.
- Requires employers with less than 500 employees (who do not apply for a receive an exemption) to provide all employees, regardless of the length of service or hours worked, to cover sick leave for certain qualifying coronavirus-related reasons.
- Full-time employees are eligible for 80 hours of sick leave while part-time employees are entitled to the number of hours that they would normally work in a two-week period. The benefit is to be calculated using the employee’s regular rate of pay.
- In order to qualify, an employee must be unable to return to work for one of the following reasons:
- The employee is subject to a governmental quarantine or isolation order related to COVID-19, has been advised by a health care provider to self-quarantine due to concerns released by COVID-19, or is experiencing symptoms of COVID-19 and seeking a medical diagnosis; The employee is caring for an individual who is subject to a governmental quarantine or isolation order related to COVID-19, has been advised by a health care provider to self-quarantine due to concerns released by COVID-19, or is experiencing symptoms of COVID-19 and seeking a medical diagnosis; or
- The employee is caring for a son or daughter under 18 years of age who cannot attend school or daycare as a result of the coronavirus.
- The employee is experiencing any other substantially similar condition specified by the Secretary of Health and Human Services in consultation with the Secretary of the Treasury and the Secretary of Labor.
The employee’s benefits are capped at $511.00 per day.
If the employee is taking time to care for someone else, sick pay is calculated at 2/3rds of their regular rate of pay with a cap of $200 per day or $2,000.00 in the aggregate.
The employer does not need to pay out the emergency sick leave benefit upon termination, the employer is prohibited from requiring the employee to look for another job, and the employee can choose to use accrued time off in addition to emergency sick leave. Employers are entitled to take a tax credit for the amount of the benefit paid.
In addition, various agencies of the federal government have also enacted various rules and regulations to mitigate against coronavirus related issues. A few examples include:
Suspending Certain Foreclosures
The Federal Housing Finance Agency (FHFA) directed Fannie Mae and Freddie Mac to provide payment forbearance for up to 12 months and suspend foreclosure and evictions for at least 60 days. This order only applied to homeowners with a single-family mortgage backed by Fannie Mae or Freddie Mac.
Deferring Federal Income Tax Payments
The U.S. Treasury Department and THE Internal Revenue Service (IRS) issued guidance allowing all individual and other non-corporate tax filers to defer up to $1 million of federal income tax (including self-employment tax) payments due on April 15, 2020, until July 15, 2020, without penalties or interest. Corporate taxpayers were granted a similar deferment of up to $10 million of federal income tax payments that would be due on April 15, 2020, until July 15, 2020, without penalties or interest. This guidance does not change the April 15 filing deadline. The notice can be found here.
Increasing Border Restrictions
On March 20 and 21, 2020, all non-essential travel between the United States and Canada and the United States and Mexico, respectively, was prohibited.
OHIO’S RESPONSE TO COVID-19
Changes to Employee Benefits
As of March 16, 2020, eligible employees requested by a medical professional, local health authority, or employer to be isolated or quarantined as a consequent of COVID-19, even if not diagnosed with COVID-19, became entitled to collect unemployment insurance, which was made possible through the issuance of Executive Order 2020-02D. This order also waived the one week waiting period generally required before eligible employees can receive unemployment benefits. A copy of Executive Order 2020-03D can be found here.
Notably, Executive Order 2020-02D did not modify the requirement that in order to be eligible, a claimant must: 1) be an employee of a covered employer; 2) who has worked 20 weeks in covered employment; 3) and has made at least $269.00 in average weekly wages. As a result, the vast majority of independent contracts and sole proprietors will not be entitled to unemployment benefits if their position is eliminated as a result of COVID-19. This is an issue that will likely be addressed in the federal stimulus bill that Congress appears to be close to passing, which we will address in a supplemental newsletter.
Orders from the Director of Health
In Ohio, the Director of Health is vested with “ultimate authority” to make special orders preventing the spread of contagious diseases, including matters of quarantine and isolation, pursuant to R.C. § 3701.13. Ohio’s Director of Health, Dr. Amy Acton, acquired her authority when Governor DeWine declared a state of emergency as a result of the pandemic. Thereafter, Dr. Acton has used her power to issue orders that have prohibited public gatherings, postponed elections, and shuttered all non-essential businesses.
Currently, Ohio is under a stay at home order from March 24th through April 7th. This order requires all Ohioans to stay at home unless they are engaged in an essential work or activity, such as going to get medical care, groceries, necessary supplies, or taking care of neighbors or family. The order contained broad exceptions that permitted employees to travel to a number of different businesses, deemed “essential”, which were allowed to continue to operate. Several requirements were imposed on employers as a condition to their right to continue to operate, such as designating six-foot distances with tape, offering hand sanitizer, and offering separate operating hours for vulnerable customers. The order authorized state and local law enforcement to enforce the order. A copy of the stay at home order can be found here. All of Dr. Acton’s public health orders that have been issued in response to COVID-19 can be found here.
In addition, Governor DeWine, together with various governmental agencies in Ohio, have enacted various rules and regulations to mitigate against coronavirus related issues. A few examples include:
Providing Childcare for Families with Parents who Work in Health, Safety and Essential Services Fields
The Ohio Department of Job and Family Services was authorized to provide childcare to families with parents who work in health, safety, and essential service fields during the pandemic. A copy of Executive Order 2020-04D can be found here.
Deferring Health Insurance Payments
The Ohio Department of Insurance issued an order that allowed certain employers to defer health insurance premium payments for up to two months from their original due date. Employer and Employee eligibility can be found here.
Deferring Workers’ Compensation Insurance Premium Payments
The Ohio Bureau of Workers’ Compensation has amended their policy to allow private and public employers to defer their workers’ compensation premium payments for March, April, and May through June 1, 2020. This is an automatic deferral, meaning no application is required. All penalties are waived and coverage will not lapse. Information on the BWC’s changes in policy and answers to frequently asked questions can be foun