Pub. 8 2019-2020 Issue 3

20 San Diego Dealer THE EVER-CHANGING EMPLOYMENT LAW LANDSCAPE UNDER COVID-19 F rom leaves to loans to local orders to layoffs, in the months since Governor Newsom first issued his executive order requiring all Californians stay at home, there have been a variety of new laws at the federal, state, and local levels impacting dealership employers. While there could always be additional changes, below are some of the key laws Dealership employers should be aware of as we navigate this spring’s COVID-19 outbreak. Employee Leaves Paid Sick Leave. For the past several years, California and the City of San Diego have required employers provide paid sick leave to prevent and treat the illnesses and injuries of employees and their family members. This couldmake time offwork to prevent contracting COVID-19 a qualified reason to take paid sick leave. Additionally, the City of San Diego allows paid sick leave to be used when the employee’s workplace or their child’s school or child care provider is closed by a public official due to a Public Health Emergency. Families First Coronavirus Response Act. Effective April 1, 2020, this federal law entitles employees of companies with fewer than 500 employees to emergency paid sick leave as well as expanded family and medical leave for certain absences that occur between April 1, 2020 and December 31, 2020. • Emergency Paid Sick Leave allows employees up to 80 additional hours of paid sick leave specifically for COVID-19-related absences. When the employee is absent for their own illness or isolation order, the law requires pay at the employee’s regular rate of pay, up to a maximum of $511 per day or $5,110 over the entire paid sick leave period. When the absence is related to care of a family member, the employee should be paid 2/3 of their regular rate of pay, up to a maximum of $200 per day or $2,000 over the entire paid sick leave period. • Expanded Family andMedical Leave allows employees up to twelve weeks of paid leave—the first two weeks unpaid and the last ten at the greater of $200 per day or 2/3 the employee’s regular rate of pay for the hours they would have been scheduled to work—for absences related to care of a child whose school was closed due to COVID-19. The employee may elect to use paid leave for the first ten workdays under the employer’s existing paid leave plans or Emergency Paid Sick Leave. Additionally, employers can elect to allow employees to use their paid leave to supplement their pay for the last ten weeks of leave. Employers who are required to provide these leaves may seek tax credits for reimbursement for costs of these leaves. However, certain dealerships may not be required to provide the leaves—and thus not potentially eligible for the tax credit—if they would be considered a joint employer with another entity under the Fair Labor Standards Act (FLSA) or part of an integrated employer under the Family Medical Leave Act (FMLA) and the total number of employees between the multiple entities is greater than 500. The tests for joint employment and integrated enterprises depends on multiple factors. Dealerships should consult with their lawyer to identify the likelihood that they would be considered a joint employer or integrated employer. Loans The federal CARES Act, passed in late March, created several incentives for employers to retain or rehire employees in spring 2020, including the Payroll Protection Program. The PPP is a small business loan to cover payroll costs up to $100,000 per employee and other overhead costs. These loans are eligible for forgiveness for employers that retain or rehire its employees. Partial forgiveness is also available based on headcount and/or wage retention. Generally, loans under this program are only available to employers with 500 or fewer employees; however,