Important Issues for Employers Amid the COVID-19 Pandemic

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News related to the COVID-19 pandemic (also known as the coronavirus) is rapidly evolving and new guidance and restrictions for both consumers and businesses are being announced almost daily.  As employers, credit unions need to be focused on the safety and well-being of its employees, as well as continuing services to its members, while fulfilling their purposes as financial institutions and complying with applicable laws and regulations.  This is a heavy burden to bear amid this time of anxious uncertainty, so this article is intended to address some of the issues that credit unions are facing as employers. This information is current as of the date of publication, but credit unions are encouraged to regularly check the resources listed at the bottom of the article for updates.

Employee leave/compensation:  For those employees who become ill, are caring for ill family members, or who are responding to voluntary or mandatory preventative measures, credit unions should be discussing with their employees what leaves may be available to them.

            Paid Sick Leave: An employee may choose to use any accrued paid sick leave if they become ill with the coronavirus, or if a family member becomes ill and the employee must care for them.  Moreover, paid sick leave may be used for self or family preventative care where civil authorities recommend a quarantine.  Paid sick leave may not be used if an employee needs to stay home for other reasons such as because their children’s school has closed, but the employee may have other leaves available.  Note that an employer may not require an employee to exhaust paid sick leave if the employee stays home due to illness or quarantine, use of this leave is the employee’s choice,  However, if an employee does choose to use their paid sick leave, an employer may require that a minimum of two hours of that leave be used at a time. A federal bill is currently pending in the Senate to expand paid sick leave benefits related to the coronavirus.

            Paid Time Off/Vacation: If an employee has accrued paid time off or vacation time, they may use this leave if their paid sick leave has been exhausted, or for any other reason provided that the terms of the paid time off or vacation policy provide for leave under those circumstances.  An employer may require an employee to use any paid time off or vacation benefits (not paid sick leave) before resorting to unpaid leave.

            Family Leave/State Disability Insurance:  If applicable to your credit union, employees may request leave under the Family and Medical Leave Act (FMLA), provided that they otherwise meet the eligibility requirements.  While FMLA is generally an unpaid job-protected leave of absence, employees may use accrued and available paid sick leave and/or vacation/PTO when applicable. The federal bill currently pending in the Senate would expand FMLA protections related to the coronavirus.

California’s paid family leave (PFL) and state disability insurance (SDI) benefits have also been expanded in response to the coronavirus.  PFL is available to an eligible employee who is caring for a family member who is ill or quarantined with COVID-19.  An employee who is unable to work due to having or being exposed to COVID-19 may be eligible for SDI benefits, subject to providing the necessary medical documentation. Moreover, an employee who is affected by a reduction of work hours or mandatory office closures can file a claim for State Unemployment Insurance (UI) benefits.

            School Activities/Emergency Leave:  In California, employers with 25 or more employees working at the same location must permit employees to take time off for certain child-related activities, including school closures, or child-care unavailability.  This time off may be paid or unpaid depending on the employer’s policies, and the employer may require that paid time off be used for this purpose.  Generally, the employee may take up to 40 hours per year, 8 hours per month for child-related activities.  However, during an emergency (such as this COVID-19 pandemic), these limitations do not apply.  As such, an employee may use all 40 hours continuously during this pandemic if they must remain at home due to their child’s school closing, or childcare becoming unavailable. In some cases, an employee may be eligible for UI benefits during this time.

Telecommuting:  Some credit unions may already have in place a telecommuting (remote working) policy and those that don’t may consider implementing one.  While not all jobs are conducive to telecommuting, to the extent feasible, this option allows for an employee to continue performing their job functions with compensation while adhering to government guidance to limit person-to-person contact and self-isolate.  Keep in mind that consideration will need to be given to necessary tools and equipment, such as laptops and mobile or office phones, logistics for expense reimbursements, as well as well as how productivity will be managed.  If not already set forth in a written policy, the credit union may use a telecommuting agreement to address these issues. Be careful to apply this policy consistently.  The decision to allow or not allow an employee to work remotely should be based on a legitimate business reason and not on any basis that may be considered discriminatory or result in a disparate impact. Please note that this also tends to set a precedent for telecommuting when considering reasonable accommodations for an employee with a disability that might prevent the employee from coming into the workplace.

Temporary Closure:  There are no federal or state rules governing credit unions that would prevent a temporary branch closure in an emergency. The NCUA just issued a Letter to Credit Unions addressing this issue (20-CU-02).  If a credit union must temporarily close one or more of its branches, you will need to give your members as much advance notice, in as many forms, as possible.  NCUA regulations require a federal credit union, or a state chartered federally insured credit union, to file a report in the event of a catastrophic act that interferes with a credit union’s ability to provide a “vital member service” exceeding two (2) days.  In that case, a credit union has five (5) days to notify their regional director. The California DBO requests that a credit union notify it of any business-related events that may “draw the attention of the media or otherwise subject the institution to public scrutiny.”  This would include the temporary closure of a branch.  In such a case, notice should be given to the Assistant Deputy Commissioner who oversees the institution. Special consideration should be given to how any resulting furlough may impact employee status and benefits.

More information for employers can be found in the Frequently Asked Questions page of the DLSE website and the EDD’s Coronavirus 2019 (COVID-19) webpage.

New guidance and rules are being announced continuously, making this a very fluid situation.  In that regard, you should consult your legal counsel to discuss your specific situation prior to taking action.  

Article by Haydee Garbero Hooten, attorney with Moore Brewer Wolfe Jones Tyler & North.

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