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Alerts and Updates

Laws and Tax Incentives Fill COVID-19 Paid Leave Void as Vaccinations Increase and More Employers Return to In-Person Work

April 28, 2021

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April 2021 has seen two similar laws go into effect in Philadelphia and Chicago, as well as action by the federal government to provide tax credits to employers who elect to provide paid leave for certain COVID-19-related reasons.

Soon after the COVID-19 pandemic hit the United States with full force in March 2020, Congress acted by passing the Families First Coronavirus Response Act (FFCRA), which required private employers with fewer than 500 employees to provide paid leave to employees unable to work for a variety of reasons related to COVID-19, while also offering tax credits for employers providing such paid leave. Following enactment of the FFCRA, some state and local governments supplemented the FFCRA’s coverage, including to provide comparable paid leave benefits to employees of larger employers.

However, the FFCRA expired at the end of 2020 and was not renewed or extended by Congress. Similarly, many state and local laws passed to supplement the FFCRA expired at the end of 2020. Recently, however, numerous state and local governments have stepped in to fill the COVID-19 paid leave void left following expiration of those laws, including employee leave related to COVID-19 vaccination. In prior Alerts, we discussed two such laws passed in March 2021 in New York and California. April 2021 has seen two similar laws go into effect in Philadelphia and Chicago, as well as action by the federal government to provide tax credits to employers who elect to provide paid leave for certain COVID-19-related reasons.

Philadelphia Public Health Emergency Leave Ordinance

Effective March 29, 2021, Philadelphia’s latest Public Health Emergency Leave (PHEL) ordinance replaced and expanded the city’s earlier COVID-19 leave law, which expired on December 31, 2020. The expanded PHEL ordinance covers all employers with 50 or more employees and permits covered employees to take leave for various COVID-19 related reasons, including to receive the COVID-19 vaccine and to recover from injury or illness related to the vaccination.

Qualifying Reasons for PHEL

Under the ordinance, employers with 50 or more employees must provide public health emergency leave when a covered employee is unable to work due to one or more of the following seven reasons:

  • A determination by a public official or public health authority, a healthcare provider or an employer that the employee’s presence on the job or in the community would jeopardize the health of others because of the employee’s exposure to COVID-19 or because the employee is exhibiting symptoms that might jeopardize the health of others, regardless of whether the employee has been diagnosed with COVID-19;
  • To care for a family member of the employee due to a determination by a public official or health authority, a healthcare provider or the family member’s employer that the presence of the family member on the job or in the community would jeopardize the health of others because of the family member’s exposure to COVID-19 or a determination by the employer that the employee is a danger to the health of others because they are exhibiting symptoms that might jeopardize the health of others, regardless of whether the family member has been diagnosed with COVID-19;
  • An employee’s need to: (i) self-isolate and care for oneself because the employee is diagnosed with COVID-19; (ii) self-isolate and care for oneself because the employee is experiencing symptoms of COVID-19; or (iii) seek or obtain medical diagnosis, care or treatment if experiencing symptoms of an illness related to COVID-19;
  • To care for a family member who: (i) is self-isolating due to being diagnosed with COVID-19; (ii) is self-isolating due to experiencing symptoms of COVID-19; or (iii) needs medical diagnosis, care or treatment if experiencing symptoms of an illness related to COVID-19;
  • To care for a child if the school or place of care of the child has been closed, or the child care provider of such child is unavailable, due to precautions taken in accordance with the public health emergency response;
  • An employee’s need to obtain immunization (vaccination) related to COVID-19; and/or
  • An employee’s need to recover from any injury, disability, illness or condition related to such vaccination.

PHEL Coverage and Use

To qualify for leave under the PHEL ordinance, an employee must have worked for a covered employer for at least 90 days and meet one of the following criteria: (1) work within the city of Philadelphia; (2) normally work in Philadelphia but currently telework from another location due to COVID-19; or (3) work for a covered employer from multiple locations or from mobile locations, provided that 51 percent or more of the employee’s work time is spent within Philadelphia.

The coverage of the new PHEL ordinance is narrower than the PHEL ordinance that expired at the end of 2020 in two key respects: (1) the new ordinance does not expand coverage beyond employers to “hiring entities” as had the prior ordinance; and (2) the new ordinance only covers employees of covered employers, and does not cover other categories of nonemployee workers (e.g., gig-based workers and domestic workers) that were covered under the prior ordinance.

Employees who work 40 or more hours per week are eligible for 80 hours of leave under the PHEL ordinance. Employees exempt from overtime under the Fair Labor Standards Act are assumed to work 40 hours in each week. Employees who work fewer than 40 hours per week are eligible for an amount equal to the time the employee is scheduled to work or actually works on average in a 14-day period. If an employee’s schedule varies from week to week, leave eligibility is calculated by taking the average number of hours the employee was scheduled to work over the past 90 days multiplied by 14.

Eligible employees can use all or a portion of their leave at any time during and for up to one week following the conclusion of a public health emergency. Employees must be able to take public health emergency leave immediately upon hire, without any waiting period or accrual requirements. Employers cannot reduce leave under the ordinance by the amount of paid leave an employee has received previously.

Notably, however, an employer is not required to provide additional public health emergency leave to employees performing in-person work if the employer’s existing paid time off (PTO) policy provides 160 hours or more of PTO in 2021 and permits the same uses as set forth under the PHEL ordinance. Employers also are not required to provide additional paid leave to teleworking employees if the employer’s existing PTO policy provides 80 hours or more of PTO in 2021 and permits the same uses as set forth under the PHEL ordinance.

Notice Requirements

The ordinance required covered employers to provide notice of the PHEL ordinance to employees by April 13, 2021. The notice must state that employees are entitled to leave, the amount of leave available and terms of use, as well as the prohibition against retaliation. Employers satisfy the notice requirement by either (a) supplying employees with a notice or (b) displaying a poster in a conspicuous and accessible place. If an employee does not maintain a physical workplace or teleworks, the employer must send an electronic communication or conspicuously post the notice in a web-based platform. To the extent an employer has not provided the required notice, it should do so immediately.

An employee seeking public health emergency leave is required to provide his or her employer with notice of the need for leave “as practicable and as soon as feasible.” Employers may request the individual provide a “self-certified statement” asserting the leave was used in accordance with the ordinance.

Job Restoration and Prohibition on Retaliation

Employers must restore employees who take public health emergency leave to the position held when their leave began. Employers also cannot retaliate against an individual who exercises or attempts to exercise his or her right to public health emergency leave under the ordinance.

Chicago COVID-19 Vaccination Rights Ordinance

On April 21, 2021, the Chicago City Council passed a COVID-19 Vaccination Rights Ordinance, which makes it unlawful for a Chicago employer to (a) take any adverse action against employees for taking time off to obtain a COVID-19 vaccination during their scheduled work hours or (b) require employees to schedule vaccinations exclusively during nonworking hours. The ordinance also provides different time-off requirements for employers that mandate COVID-19 vaccinations for employees and those that do not. Additionally, the new ordinance expands the COVID-19 anti-retaliation protections provided to employees under prior city ordinances.

Under the ordinance, Chicago employers that mandate COVID-19 vaccinations for employees must provide them with up to four hours of paid time off―at the employee’s regular rate of pay―per injection if the appointment falls during the employee’s scheduled work hours. Employers that mandate vaccinations may not compel employees to utilize paid sick leave or other PTO to fund those hours. Employers that do not mandate employee COVID-19 vaccinations must provide them with time off for vaccinations scheduled during work hours and must permit employees to use any available accrued paid sick leave or PTO for time off related to getting vaccinated.

An employer who fails to provide employees with the required time off for vaccination appointments or who retaliates against an employee for taking time off will be subject to a variety of possible penalties, including: (1) administrative and civil proceedings brought against them by the commissioner of Business Affairs and Consumer Protection, or alternatively the director of Labor Standards; (2) private civil actions by affected employees, with available recovery including reinstatement to the same or equivalent position, compensatory damages equal to three times the full amount of wages the employee would have received absent the retaliatory action and an additional amount for any actual damages, and attorneys’ fees and costs; and (3) potential civil penalty fines ranging between $1,000 and $5,000 per violation. The ordinance took effect immediately and will be in effect through the date that the commissioner of the Department of Public Health issues a determination that the risks posed by COVID-19 have diminished and the ordinance may be repealed. There are no notice or posting requirements for employers under the ordinance. The commissioner of Public Health has the power to issue rules related to enforcement of the ordinance, but none have been issued to date.

Federal Government Tax Credit

The March 2020 Families First Coronavirus Response Act required employers with fewer than 500 employees to provide two types of leave to employees unable to work for various COVID-19 related reasons: (1) up to 80 hours of emergency paid sick leave and (2) up to 12 weeks of expanded family leave (the last 10 weeks of which were required to be paid). Employers providing paid leave under the FFCRA were eligible for tax credits to offset the cost of such leave. The FFCRA’s paid leave mandate expired on December 31, 2020, but it was extended as a voluntary program through March 31, 2021, where the tax credit for providing FFCRA-covered leave remained. Previous Alerts from March and April 2020 discuss the FFCRA in-depth.

As a reminder, the FFCRA provided for emergency paid sick leave for the following six COVID-related reasons:

  1. The employee is subject to a federal, state or local quarantine or isolation order related to COVID-19;
  2. The employee has been advised by a healthcare provider to self-quarantine for reasons related to COVID-19;
  3. The employee is experiencing COVID-19 symptoms and is seeking a medical diagnosis;
  4. The employee is caring for an individual subject to a quarantine or isolation order;
  5. The employee is caring for a child whose school or place of care is closed (or whose child care provider is unavailable) for reasons related to COVID-19; or
  6. The employee is experiencing any other substantially-similar condition specified by the Secretary of Health and Human Services in consultation with the Secretaries of Labor and Treasury.

The employee would be eligible for expanded family leave only for reason No. 5 above (i.e., to care for a child whose school or place of care is closed, or whose child care provider is unavailable, for reasons related to COVID-19).

The American Rescue Plan Act (ARPA), signed into law by President Joe Biden on March 11, 2021, further extends employee paid leave for COVID-19-related reasons for employers covered by the FFCRA on a voluntary basis, and as a continued inducement to provide such leave, also extends the tax credit available to employers who provide such paid leave.

Importantly, in addition to the existing six reasons for covered paid sick leave under the FFCRA coverage, the ARPA added three new reasons for paid sick leave:

  1. Obtaining a COVID-19 vaccination;
  2. Recovering from an injury, disability, illness or condition related to a COVID-19 vaccination; and
  3. Seeking or awaiting the result of a COVID-19 test or diagnosis when the employee has been exposed to COVID-19 or the employer has requested the test or diagnosis.

There are other key changes in the ARPA’s extension of the FFCRA. The law provides for a new 80-hour bank of paid sick leave for all nine of the FFCRA/ARPA-covered reasons for leave, for use between April 1 and September 30, 2021. In other words, even if an employee used his or her FFCRA leave allotment during 2020 and/or the first three months of 2021, employers can receive a tax credit for providing up to an additional 80 hours of paid leave for covered reasons.

Additionally, the extension set forth in the ARPA allows an employer to receive a tax credit for providing up to 12 weeks of paid family leave for any of the nine covered reasons for leave. Previously, employers could only receive the tax credit for paid family leave provided to employees for reason No. 5 listed above (leave to care for a child whose school or place of care had been closed, or whose child care provider is unavailable, due to COVID-19 precautions). At this time, it is unclear whether expanded family leave for these additional reasons will run concurrently with an employee’s leave allotment under the FMLA, as it did for mandatory leave under the FFCRA in 2020.

IRS has issued guidance for employers seeking to claim a tax credit for ARPA/FFCRA leave provided to employees between April 1 and September 30, 2021.

What This Means for Employers

Although there is light on the horizon for pandemic-weary employers, these new laws serve both to remind employers that the COVID-19 pandemic is not over and that vaccination will be key to ending the pandemic and returning to a semblance of pre-pandemic “normal.” Smaller employers (those with fewer than 500 employees) nationwide should take note of the available tax credits under the ARPA as they continue to grapple with employee absences necessitated by the COVID-19 pandemic and consider the role that vaccination will play into efforts to return to in-person work. Similarly, employers in New York, California, Philadelphia and Chicago―and likely other state and local jurisdictions in the coming weeks and months―must become familiar with paid leave and other requirements relating to COVID-19 and the COVID-19 vaccine to ensure that they are in compliance with applicable law. The myriad requirements under these laws are complex and intertwined, and employers should consult with counsel both to minimize risk and to maximize opportunities that may exist in a COVID-19 employment law landscape that continues to evolve.

About Duane Morris

Duane Morris has created a COVID-19 Strategy Team to help employers plan, respond to and address this fast-moving situation. Contact your Duane Morris attorney for more information. Prior Alerts on the topic are available on the team’s webpage.

For More Information

If you have any questions about this Alert, please contact Christopher D. Durham, Jonathan A. Segal, Daniel O. Canales, Jennifer Long, any of the attorneys in our Employment, Labor, Benefits and Immigration Practice Group, any member of the COVID-19 Strategy Team or the attorney in the firm with whom you are regularly in contact.

Disclaimer: This Alert has been prepared and published for informational purposes only and is not offered, nor should be construed, as legal advice. For more information, please see the firm's full disclaimer.