What employers “recovering” from COVID-19 need to know about bringing employees back to work. Brian Cressman

Brian Cressman is an associate at MacDonald Illig and a member of the Business Transactions, Trusts & Estates, Real Estate, and Education Law Practice Groups.

Businesses nationwide were, and continue to be, faced with unprecedented challenges brought on by the COVID-19 pandemic. To mitigate the spread of coronavirus, Governor Wolf closed many businesses, which resulted in mass layoffs. Further, essential businesses, although permitted to remain open, were not insulated from the impact of the national economic slowdown, resulting in layoffs. In response, the Pennsylvania Legislature and Congress have enacted legislation in an effort to help businesses and their employees restore their health, including the Families First Coronavirus Response Act (“FFCRA”) and the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”). While these acts implemented programs aimed to cure COVID-19 symptoms suffered by both employers and employees, they

also might have unintended side effects. For example, two such initiatives passed in response to the pandemic establish new paid leave rights for employees and expand the scope and benefits of unemployment for those out of work. One such unintended consequence of these provisions may be incentivizing employees to delay returning to work. The FFCRA created Expanded Family and Medical Leave (“EFML”), under which an employee who cannot work because he/she has to stay at home to care for a child whose school or childcare has been closed pursuant to a government order related to COVID-19 is entitled to paid EFML for up to 12 weeks at two-thirds of his/her normal rate. Pennsylvania closed all schools for the academic year, which undoubtedly increased the number of people requesting EFML. Unfortunately, the childcare issue is not resolved with the conclusion of the academic year. If the employee does not have childcare available during the summer months, the employee may continue on EFML and possibly not be able to return to work even after his/her leave has been expended. Additionally, the CARES Act expanded unemployment to cover individuals that would not typically qualify, extended the benefit period to 39 weeks in most instances, and provided an additional $600 of Federal Pandemic Unemployment Compensation on top of a person’s weekly benefit. As a result, Pennsylvania employees who make less than approximately $61,000 per year will make more each week collecting unemployment than they did in their paychecks while working full time. The practical business problems arising from the pandemic (for example, allaying employee fears, re-engineering operations to comply with social distancing, maintaining morale and assuring workplace safety) and the incentive structure provided by the expanded employee benefits discussed above have been and remain potential barriers to smooth operations for employers. Employers must be cognizant of guidance from a variety of state and federal agencies bearing on a variety of issues in recalling employees and operating during the pandemic, including anti-discrimination laws and workplace safety rules, all while managing employee concerns. Additionally, if an employer obtained a Paycheck Protection Program (“PPP”) Loan, the PPP forgiveness amount may be impacted by the return of its workforce. In order to avoid reduction to the forgiveness amount of a PPP loan, an employer must restore its workforce and wages by June 30, 2020, or document that the employer made qualifying offers to employees to return and the employees rejected those offers. Just like the onset of COVID-19 presented unforeseen challenges for businesses, so will the recovery process. State and federal guidance changes frequently, and often is only advisory. Do not wait until the last minute. Consult with your attorney, accountant and banker, as applicable, to proactively address issues. Plan for the challenges ahead as best you can, and our attorneys are here to provide guidance in the process. For more information, contact Brian Cressman at bcressman@mijb.com or call 814/870-7600.