many of the laws that existed before the COVID-19 pandemichave been relaxed and, simultaneously, many new laws have popped upin response to this unprecedented global crisis. (Photo:Shutterstock)

For businesses of all sizes and types, the impact of COVID-19 onthe workforce is a chief concern. Employers must balance thechallenges of increased unemployment claims and employmentreductions while addressing bottom lines and other businessconcerns. They must also follow federal and state laws. While statelaw cannot be directly contrary to federal law, states can imposeadditional requirements or protections for their constituents andchoose what to implement where federal law is permissive.

Related: Employer compliance beyond CARES and FFRCA: Don'tforget the basics

For instance, the recently enacted federal stimulus package,specifically the Coronavirus Aid, Relief and Economic Security(CARES) Act affords states "significant flexibility…to amend theirlaws to provide [Unemployment Insurance] benefits in multiplescenarios related to COVID-19…[F]ederal law allows states to paybenefits where (1) An employee temporarily ceases operations due toCOVID-19, preventing employees from coming to work; (2) Anindividual is quarantined with the expectation of returning to workafter the quarantine is over; and (3) an individual leavesemployment due to a risk of exposure or infection or to care for afamily member."

However, many states have expanded the unemployment eligibilityto include only one or two of these. As such, there is noone-size-fits-all decision for employers. This article provides abrief overview of some employment issues related to COVID-19.

Notice requirements and the WARN Act

Some states, such as Pennsylvania and South Carolina, haveenacted new laws requiring employers to provide notice to employeesabout availability or entitlement to unemployment compensationbenefits either at the time of separation from employment or whenan employee's work hours are reduced. States with theserequirements generally also specify the timing and method ofdelivery for these notices. Employers should consult their localdepartment of labor (DOL).

Employers must also navigate federal notice requirementsregarding the layoff itself. The Worker Adjustment and RetrainingNotification (WARN) Act requires covered employers with 100 or morefull-time workers (or 100 full- and part-time workers who work atleast a combined 4,000 hours per week) to provide written notice toprotected employees at least 60 calendar days in advance of coveredemployment losses, such as plant closings and mass layoffs. Alayoff of less than six months does not trigger the federal WARNAct, but employers are expected to issue notice when it becomesforeseeable that the layoff or closing will last more than sixmonths. As with other laws discussed, some states have WARN lawsthat expand covered employers by reducing the minimum size/numberof employees.

A WARN notice is typically triggered in plant closings and masslayoffs, including a plant shutdown resulting in an employment lossof 50 or more employees during any 30-day period, layoffs of 500 ormore employees during any 30-day period or layoffs of 50-499employees that totals 33% of the total active workforce. Anemployer is also required to provide WARN notice when it reducesthe work hours of 50 or more workers by 50% or more for each monthin any six-month period.

Additionally, an employer is required to give WARN notice if ithas a series of small, separate and related terminations or layoffsover a 90-day period that would not be covered individually,otherwise known as the "aggregation" rule.

While there are exceptions to the 60-day requirement, noticemust still be provided as soon as practicable, and the employermust provide a statement of the reason for reducing the noticerequirement in addition to fulfilling the other noticerequirements. The three exceptions are a faltering company,unforeseeable business circumstances or a natural disaster.

Employers face uncertainty regarding whether the COVID-19pandemic would qualify as an exception to the 60-day noticerequirement. Because the natural disaster exception requires adirect relationship between the disaster and plant closing or masslayoff, the unforeseeable business circumstances exception is moreapplicable to decisions made due to COVID-19. However, the argumentweakens with time, as the unforeseeable aspect diminishes.

Additionally, employers should be mindful of state laws. NewYork's DOL has announced that its state WARN notice requirementsare not suspended by the COVID-19 pandemic. California created an"unforeseen business circumstance" exception to its state WARNAct.

Verifying employment information and IRCA

The Immigration Reform and Control Act (IRCA) of 1986 generallymakes it unlawful for a person or entity to knowingly hire(including subcontractors), recruit, refer for a fee for U.S.employment or continue to employee any alien who is unauthorized towork. The Act also requires employers to verify the work status ofan individual and complete Form I-9, Employment EligibilityVerification. Form I-9 requires prospective employees to attestthey are authorized to work and provide proof of identity andemployment eligibility. Employers must then physically examine eachdocument in the presence of the employee to determine if itreasonably appears to be genuine and relates to the employee.

The federal government recently implemented a temporary policypermitting employers taking physical proximity precautions relatedto COVID-19 to defer the physical presence requirements associatedwith the Form I-9, including reverification. An employer may alsodesignate an authorized representative to act on their behalf tocomplete and sign the Form I-9, but the employer is liable for anyviolations in connection with the form or the verification process.In addition, employers served with a Notice of I-9 Inspectionduring March 2020 were granted an automatic extension until May 18,2020. Beginning on May 1, identity documents found in List B ofForm I-9 set to expire on or after March 1, 2020, and not otherwiseextended by the issuing authority, can be treated as if theemployee presented a valid receipt for an acceptable document forForm I-9 purposes.

Employers that elect to defer the physical presence requirementsmust remotely inspect the documents provided (via video conference,email, fax, etc.). They must also obtain, inspect and retain copiesof the documents within three business days and note "COVID-19" asthe reason for the physical inspection delay. Once normaloperations resume, all employees onboarded using remoteverification must report to their employer within three businessdays for in-person verification of identity and employmenteligibility documentation. Once the documents have been physicallyinspected, the employer should add "documents physically examined"with the date of inspection to the additional information field onthe Form I-9 or to section 3 as appropriate.

Employers should note this option applies only to employersworking remotely with no employees physically present at the worklocation, and the employer must provide written documentation oftheir remote onboarding and telework policy for each employee.There are no exceptions, but if newly hired employees or existingemployees are subject to COVID-19 quarantine or lockdown protocols,the Department of Homeland Security (DHS) will evaluate the issueon a case-by-case basis.

Unemployment and the CARES Act

The CARES Act was signed into law on March 27, 2020. While theAct expands states' flexibility in determining eligibility andadministering unemployment insurance, unemployment insurance isstill governed by state law, meaning states ultimately choose howto implement the CARES Act.

Future unemployment insurance costs

The federal programs established by the CARES Act are fullyfunded by the federal government, and states are prohibited fromcharging an employer.

With respect to employer filed (partial) claims, laws vary. Somestates have short-term compensation programs to provideunemployment benefits. Others, like Georgia, do not have such aprogram. Instead, Georgia enacted an emergency rule requiringemployers to file partial claims on behalf of their employees whenemployees' hours are reduced, with employers not being charged ontheir DOL account. Employers found in violation of this rule willbe required to reimburse the DOL for the full amount ofunemployment insurance benefits paid.

Important employee classificationconsiderations

The Pandemic Unemployment Assistance (PUA) program under the Actprovides 29 weeks of benefits and eligibility for self-employedindividuals, independent contractors, gig workers and otherindividuals who otherwise would not qualify for unemploymentbenefits under state or federal law. To be eligible, among otherrequirements, individuals must demonstrate they are otherwise ableto work and available for work within the meaning of applicablestate law, except that they are unemployed, partially unemployed orunable or unavailable to work due to COVID-19.

Employers should make sure to understand an employee'sclassification because it determines who files for unemployment.Employers may be required to file on behalf of their employees,while individual contractors or self-paid individuals file onbehalf of themselves or their company. Additionally, failure tofile for an employee could have consequences in certain states,such as Georgia.

Federal relief options

For qualified individuals, the Federal Pandemic UnemploymentCompensation (FPUC) program under the Act provides an additional$600 benefit per week. The Pandemic Emergency UnemploymentCompensation (PEUC) program extends the length of time anindividual may receive unemployment compensation to 13 weeks afterthey exhaust their regular state unemployment. It also mandatesstates offer flexibility in meeting eligibility requirementsrelated to "actively seeking work" if an applicant's ability to doso is impacted by COVID-19. These benefits can, and often, paybetter than an employee's regular job, so employers should not besurprised if employees request to be laid off. However, despite anemployee's incentive to receive increased unemployment benefits,some employers are incentivized to keep employees working or atleast on their payroll.

For qualifying small businesses, the Small BusinessAdministration (SBA) and U.S. Department of the Treasury haveimplemented the Paycheck Protection Program (PPP) through the CARESAct to incentivize employers to keep workers on the payroll.Neither the government nor lenders will charge fees and nocollateral or personal guarantees are required. The loan will befully forgiven if all employees are kept on the payroll for eightweeks and the employer uses the funds for payroll costs, intereston mortgages, rent and utilities. At least 75% of the forgivenamount must have been used for payroll.

Any reduction in the number of full-time equivalent employees isdeducted on a pro-rata basis. Likewise, any reductions in salarygreater than 25% during the eight-week covered period are totaledand deducted on a dollar-for-dollar basis from the loan amountforgiven.

Essentially, the advice for human resources managers is tomaintain a relationship with local employment counsel and monitorstate laws. Assume both state and federal laws will continue toevolve — as they have for the last several weeks and months, inresponse to new economic and public health data. On the whole, manyof the laws that existed before the COVID-19 pandemic have beenrelaxed and, simultaneously, many new laws have popped up inresponse to this unprecedented global crisis. Know that these lawsare a new frontier for everyone from legislators to CEOs, and youare not alone in trying to make sense of them all.CrystalMcElrath ([email protected]) is apartner at Swift, Currie, McGhee & Hiers, LLP. She practicesworkers' compensation defense, as well as employment law defenseand counseling, specializing in disability and leave laws.

NicholeNovosel ([email protected]) is anattorney for Swift, Currie, McGhee & Hiers, LLP, practicingworkers' compensation defense, as well as employment law defenseand counseling. Her clients include employers and insurancecarriers.  

Anandhi Rajan([email protected]) is a partner atSwift, Currie, McGhee & Hiers, LLP. She represents managementin employment matters and counsels businesses and individuals inmatters of potential liability arising from their businessoperations or actions.

Read more: 

• COVID-19: Employment law update and guidance foremployers
• 6 categories of employment lawsuits to expect inthe wake of COVID-19
• Here's what the EEOC says employers can ask anddisclose about COVID-19