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Some companies are in the midst of rehiring employees laid off due to the pandemic, and for others that’s still in the future. Either way, as you make plans to protect your employees’ health, be sure you know how to protect your business too. In this post we’ll talk about two important ways you must follow the law and best practices as you continue or begin the rehiring process.
Avoid Discrimination Claims
Any time you lay off an employee and later refill the position, the potential exists for a discrimination claim if you offer the job to someone else or end up hiring a different person. It’s critical to understand what may constitute discrimination so you can avoid it.

Of course, your policies should state explicitly that your hiring practices do not discriminate on the basis of race, color, religion, sex (including pregnancy, sexual orientation, or gender identity), national origin, age (40 or older), disability and genetic information (including family medical history), or protected veteran status. But in the age of COVID-19 extra caution is warranted.

According to the Centers for Disease Control and Prevention (CDC), some people are especially vulnerable to severe COVID-19 disease and complications, including people over 60, those with underlying medical conditions, pregnant women, and others. But these do not count as valid reasons to not rehire an employee. Even if you have your employees’ best interests and health in mind, it can still be construed as age or other discrimination. One option may be to discuss plans for a delayed start or work from home if possible; however, the employer should make the final decision whether to accept this kind of arrangement.
You can also avoid claims of discrimination by using the same considerations for making both layoff/furlough and rehiring decisions. For example, if a business laid off employees based on seniority, then seniority could be the main factor considered when deciding who to bring back to the active workforce.
But there are valid reasons to not rehire someone, or to delay a return-to-work temporarily, as long as it is not discriminatory, based on objective criteria, and well-documented. Some examples include, but are not limited to:

• documented past poor performance
• significant changes to the job that make the person no longer qualified
• newly added job duties that the person cannot perform (for non-discriminatory reasons)
• diagnosis of COVID-19 in the employee, a family member, or person the employee is caring for
• current doctor’s orders to self-quarantine
• inability to obtain childcare (or dependent care) due to school or care center closure due to COVID-19

Always make rehiring decisions on a case-by-case basis, taking care that you are able to document the legitimate non-discriminatory reasons for making such decisions.  If you are uncertain, consult with an attorney or employment specialist.
Document Offers to Return to Work
It is always the best practice to make a formal, written offer of employment. This helps document the actions that an employer took. Retain records of any response, or document a lack of response from any employee as well. Because many employers have taken out PPP loans, they may wonder how rehiring impacts loan forgiveness. It is unlikely the SBA will penalize employers in the loan forgiveness calculation if the employer can show that they made a good faith, written offer of rehire, and can document the employee’s rejection of that offer. Letters should include a return-to-work date, an overview of what’s changed and what hasn’t, the status of their benefits, a summary of new health and safety procedures for reassurance, a deadline to accept or decline the offer, and a job offer to return an employee to “suitable work.” Exact definitions vary from state to state, but in general, suitable work means a job that offers wages comparable to recent employment and work duties that correspond to education level and previous work experience.
Just because you offer suitable work, however, does not guarantee it will be accepted. Those collecting unemployment are usually required to certify weekly that they are attempting to find employment (though some states have suspended this requirement due to the unique circumstances of many COVID-19 layoffs). It’s implied that offers of employment must be accepted except if there is “good cause” to reject it, such as a change to the nature of the work, reduced pay or salary, a new duty location, for example. When an employee refuses an offer to return to work and is collecting unemployment compensation benefits, a final determination of whether good cause exists must be made by an administrative law judge.
Two reasons that do not qualify as “good cause” are fear of contracting COVID-19 (as long as you are following safe practices and taking reasonable precautions for worker and customer safety during the pandemic) or the fact that the person is earning more from unemployment benefits than the offered wages or salary. Depending on your state’s requirements, you may be required to report these types of refusals.
For example, in Ohio, “employees are expected to return to their previous employment if asked to do so and if there is not otherwise good cause for refusing to return to work.” Refusing to return to work without good cause makes an individual ineligible for further unemployment benefits. Employers can notify the agency by filing the “Eligibility Notice/Refusal to Return to Work Form. https://secure.jfs.ohio.gov/covid-19-return-to-work/.
Employers are eager to get back to business as usual. They need to follow health and safety precautions to continue opening the economy, but it is also important to take steps to protect company’s legitimate business interests when rehiring employees. If you have any questions regarding how to handle reopening your business and COVID-19, or for any other employment and labor law matters, please contact Matthew Stokely at mstokely@pselaw.com or Kristina Curry at kcurry@pselaw.com, or call (937) 223-1130.

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In response to the COVID-19 health emergency, Congress passed the Families First Coronavirus Response Act (FFCRA). The FFCRA mandates two (2) weeks of Expanded Paid Sick Leave (EPSL) and up to 10 weeks of Expanded Family Medical Leave (EFMLA) be available to employees of businesses with fewer than 500 employees. One of the goals of the FFCRA was to provide paid leave for employees whose children no longer had a “place of care” to attend during the work day due to COVID-19.
Most children were in the midst of finishing the 2020 spring academic semester when the COVID-19 health emergency began. This timing meant that it was easy to determine if a child belonged to a specific “place of care” that had closed due to COVID-19, because it was likely the school or daycare that child had been attending since the 2019-2020 academic school year began – i.e. before the pandemic.
Now that summer is here, parents and employers are faced with the new challenge of identifying what constitutes as a “place of care” under the FFCRA. Many summer camps and programs were closed down before children were able to attend – or even enroll. Such camps and programs therefore would not have been “places of care” of any child at the time they closed. So how are parents to prove that their intentions were to enroll their child in a specific camp or program that has since shut its doors?
In the Field Assistance Bulletin No. 2020-4, the U.S. Department of Labor (“The Department”) further explains in the FFCRA the definition of a “place of care”, as well as other ways of satisfying the requirement of naming the summer camp or program that a child would have attended. A “place of care” is defined as a physical location in which care is provided for the employee’s child while the employee works and includes summer camps and summer enrichment programs. The Department noted that, among others, the following steps may satisfy the requirement of naming a specific “place of care” for a child;

• If the camp or program had an application process, submission of an application prior to the camp’s closure;
• Submission of a deposit prior to the camp’s closure;
• Recent prior attendance, such as attendance during the summer of 2018 or 2019, so long as other eligibility requirements are satisfied;
• Acceptance to a wait list for the camp or program;

As noted in the FFCRA, there may be other circumstances that show an employee’s child’s enrollment or planned enrollment in a summer camp or program. It would be impossible to address every potential circumstance under which an employee may satisfy these requirements. Therefore, the Department recognized in its guidance that there can be no one-size-fits-all rule.
When determining whether to approve or deny FFCRA leave to an employee based on the closure of a summer camp or program, employers should consider whether there is evidence of a plan for the child to attend the camp or program or, short of a “plan,” whether it is still more likely than not that the child would have attended the camp or program had it not closed due to COVID-19. If you need assistance regarding the approval or denial of FFCRA leave, or other employment law matters, please contact Kristina Curry or Matt Stokely or call (937) 223-1130.

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Here is a summary of the new provisions in the Paycheck Protection Flexibility Act:

• Extends the minimum repayment time of PPP loans to five years. This applies to any PPP loan made on or after June 5, 2020. Borrowers and lenders are free to negotiate a longer term of repayment at 1% interest.

• Extends the covered period for using PPP loan proceeds from June 30, 2020, to December 31, 2020.

• Extends the covered period for PPP loan forgiveness from eight weeks from the date of origination to the earlier of 24 weeks from the origination date or December 31, 2020. A borrower who received a loan before the bill’s enactment could elect to continue using the 8-week covered period set forth in the Coronavirus Aid, Relief, and Economic Security (CARES) Act.

• Extends the deadline for the safe harbors for FTE levels and salary reductions from June 30, 2020, to December 31, 2020.

• Provides that the amount of loan forgiveness will not be reduced by a reduction in the number of full-time equivalent employees, if, with respect to the period February 15, 2020, to December 31, 2020, the borrower is able to document in good faith that it was unable to rehire employees or unable to return to the same level of business activity due to an inability to comply with governmental standards related to sanitation, social distancing, or other safety requirements due to coronavirus.

• Provides that at least 60 percent of PPP loan proceeds should be used for payroll costs to receive loan forgiveness (overturning the 75 percent standard set forth by the Small Business Administration (SBA) and U.S. Treasury Department).

• Eliminates the six-month deferral of payments due under PPP loans and replacing it with a longer 10-month deferral as long as the borrower applies for forgiveness within 10 months of the end of the covered period. The covered period is the earlier of 24 weeks from loan origination or December 31, 2020.

• Allows for all employers to take advantage of the CARES Act deferral of the employer portion of social security payroll taxes, regardless of whether they have had a PPP loan.

 
Additional guidance from the Small Business Administration and the U.S. Treasury Department is expected within the coming weeks.  The attorneys at Pickrel, Schaeffer and Ebeling advise clients on all aspects of post-pandemic planning and legal compliance.  If you need assistance with planning for these changes, modifying your existing PPP loan forgiveness plan, or other strategies to return to business safely, please contact Kristina Curry or Matt Stokely at kcurry@pselaw.com or mstokely@pselaw.com, or call (937)223-1130.
 
You may also be interested in the following article:  https://www.pselaw.com/returning-to-business-and-ppp-loan-forgiveness/
 

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The loan forgiveness portion of the Paycheck Protection Program (PPP) Small Business Administration (SBA) loans will permit Employers who borrowed during the Covid-19 crisis to have up to 100% of the balance of a loan forgiven if the employer-borrower meets certain criteria.  Generally, these criteria require that the business maintain or restore the level of Full-Time Equivalents (FTE’s) that they employ, as well as the individual salaries of their employees, to pre-Covid-19 levels.  But what if employees who are able to work refuse to return?

A new Interim Final Rule (IFR) published by the SBA/Treasury Department on June 1, 2020 gives specific guidance to employers regarding what they must do in order to take advantage of the “safe harbor” on PPP loan forgiveness calculations when employees decline an offer to return to work.  If the employer borrower has offered to rehire an employee and followed the steps below, they will be permitted to exclude these employees from their loan forgiveness calculations.
In order to take advantage of the safe harbor provision, employer borrowers may exclude any reduction in full-time equivalent employee headcount or reduction in an individual’s salary that is attributable to an individual employee if:

1. The borrower made a good faith, written offer to rehire such employee (or, if applicable, restore the reduced hours of such employee) during the covered period or the alternative payroll covered period;
2. the offer was for the same salary or wages and same number of hours as earned by such employee in the last pay period prior to the separation or reduction in hours;
3. the offer was rejected by such employee;
4. the borrower has maintained records documenting the offer and its rejection; and
5. the borrower informed the applicable state unemployment insurance office of such employee’s rejected offer of reemployment within 30 days of the employee’s rejection of the offer.

 The federal CARES Act that created the PPP loan framework reduces the amount of the PPP loan that may be forgiven if the employer borrower reduces the number of FTE’s or the amount of individual employee salaries. This reduction is waived if the employer borrower eliminates the reduction in full-time equivalent employees and salaries.
In Ohio, informing the state unemployment insurance office involves notifying the Ohio Department of Job and Family Services (ODJFS).  Currently, ODJFS is revising the forms that it may provide for this purpose.  However, ODJFS provided an email address where employers may notify ODJFS of the employee’s refusal to return to work.  We recommend that employers email the names of the employees, along with the offer letters and documentation of the employee’s refusal to return, to the following email address:  UIReturntoWork@jfs.ohio.gov
Pickrel, Schaeffer and Ebeling is here to help with all issues regarding employee’s safe return to work.  If you need legal guidance on how to return employees to work safely, PPP loan forgiveness issues or complying with local, state and federal Covid-19 regulations, please contact Kristina Curry or Matt Stokely in the Labor and Employment Department at kcurry@pselaw.com or mstokely@pselaw.com, or call (937)223-1130.

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Companies that were not eligible to take the loan, because they were large companies with other forms of liquidity that they could draw upon, may return the funds by May 14, 2020 with “no questions asked.” 

The U.S. Treasury and the SBA issued frequently asked questions (FAQs) on PPP loans. One question asks whether businesses owned by large companies with adequate sources of liquidity to support their ongoing operations qualify for PPP loans. According to the SBA FAQ, all borrowers must evaluate their economic need for a loan under the standards in effect at the time of the loan application. The standards are set by the Coronavirus Aid, Relief and Economic Security (CARES) Act, which established the PPP, as well as subsequent regulations.  Borrowers must certify that their PPP loan request is necessary due to “current economic uncertainty” that made the loan necessary to support ongoing operations. The certification must be made in good faith, taking into account the borrower’s current business activity and ability to access other sources of liquidity in a way that’s not “significantly detrimental” to the business.

Treasury Secretary Steven Mnuchin has stated that PPP loans of $2M or more will be scheduled for audit. The loan application notes that making a false statement to obtain a guaranteed loan from the SBA is punishable by imprisonment of up to five years and/or a fine of up to $250,000.  The federal False Claims Act (FCA) permits treble damages, or triple the amount of the government’s actual damages, as well as civil penalties, imprisonment up to five years and a fine up to $250,000 for criminal liability.  Further guidance is expected from the SBA and Treasury within the coming days.  Please contact Kristina Curry at kcurry@pselaw.com, or one of our attorneys who are prepared to assist you if you have questions regarding your PPP loan, loan forgiveness, or whether you should consider any responses to the repayment deadline date on May 14, 2020. 

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• Record keeping requirements for PPP What is FTE?
• Loan Forgiveness Unemployment What are the important dates to keep in mind?
• How do I bring back employees if they have been laid off? 
• Should I be concerned about employees not returning when I can bring them back to work?
• Are there other options to consider as an employer if I didn’t get a PPP loan?

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FirstLight was founded by a team of professionals and caregivers with over 105 years of experience in operating successful health care and elder care service organizations. They provide Home Care services wherever home is – a private residence, a nursing home, assisted living facility, retirement community or hospice. Providing first-class personal service to help you or a loved one maintain independence and quality of life.

Now FirstLight Home Care is offering health screenings to assist companies that may not have the staff to do the suggested CDC health checks. FirstLight has a fully trained and insured staff that will work with employers on specific guidelines and protocols for reporting and documenting all employee temperatures as well as those who decline to have their temperatures taken. FirstLight is able to manage various shifts from very few hours to 24 hours. To learn more, please call 937-836-9624, visit their website at www.NWDayton.FirstLightHomeCare.com or email mmoyer@firstlighthomecare.com.

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