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Paid-Leave Promise Turns ‘Mirage’ for Most Workers in Pandemic

May 27, 2020, 10:01 AM

Attempts to enforce a new paid-leave law for workers affected by the coronavirus are colliding with the reality that the majority of the workforce isn’t eligible for the benefits.

The wide array of exemptions written into the law and subsequent regulations the Department of Labor issued have left few options for thousands of workers who have called the department, lawyers, or advocacy groups for help, according to interviews with a dozen government employees, worker advocates, and private attorneys.

Up to 80% of the workforce may not be eligible, according to an analysis by the left-leaning think tank Center for American Progress. The challenges in enforcing the law and disputes about coverage will likely be tested more frequently as employers call back employees who may still have Covid-19 symptoms or need to care for their children.

“It looks like the policy for paid sick leave and paid family leave is a mirage for most restaurant workers. It’s there, it’s on paper, but in fine print they’re actually not covered,” said Anthony Advincula, national policy director for Restaurant Opportunities Centers United.

The Families First Coronavirus Response Act that Congress swiftly passed in March included a temporary 12-week paid-leave provision. It gives workers up to two weeks of paid sick leave at their regular earnings if they’ve been diagnosed with the virus, are experiencing symptoms, or are subject to a government quarantine order. Up to 10 additional weeks of family leave, paid at two-thirds of the typical salary, are available to employees who need to care for a child whose school or place of care is closed due to the virus.

But there are exemptions for companies with at least 500 workers, virtually the entire health-care sector, and certain businesses with fewer than 50 workers. The Labor Department’s implementing regulation further narrowed the provision’s reach by allowing employers to deny leave to furloughed employees or when there’s no work available.

The agency’s Wage and Hour Division has concluded more than 700 cases under the FFCRA as of May 26—mostly involving one worker at a time—with hundreds more underway, a DOL official said in an interview. In some cases, the agency recovered back pay for workers who were denied leave or the employer agreed to begin providing leave; in others, the division found the employers weren’t in violation, said the official.

These cases account for a sliver of the approximately 200,000 phone calls the WHD has received since the law was enacted, he added. Many calls are referred to other agencies because the worker seeking to file a complaint is deemed ineligible. Frequently, the workers had been laid off before the rule took effect.

Fred Plevin, founder of management-side firm Paul, Plevin, Sullivan & Connaughton in San Diego, said businesses are trying to err on the side of generosity. “I think most employers that I’ve been talking to are inclined to grant the leave,” Plevin said.

Other businesses in financial distress can’t afford to wait for the dollar-for-dollar tax credits the law promised them for paying sick and family leave. Also, there are ambiguities in the DOL rule that are causing employers to ring their attorneys with questions, such as whether a child’s summer camp closure would qualify the parent for paid family leave, Plevin said.

Douglas Werman, a plaintiff lawyer in Chicago, said he expected the law to be a boon for litigation against unscrupulous employers. But despite fielding hundreds of phone calls from employees seeking access to paid leave, he’s yet to find a single viable claim.

“It’s just horrible. Most of the time we’re spending on the phone is in the role of counselor or therapist,” Werman said. “There’s real carnage in the workplace and we have not been given the tools by Congress to help.”

No Accountability

The DOL, in its paid-leave rule, estimated that up to 61 million Americans—47% of the workforce—qualified for benefits. But the agency said that’s just based on the number of workers at firms with fewer than 500 employees. It acknowledged the number is lower with the exclusions for small businesses and health care.

“The law addressed a meaningful need, and we know that because of the number of people who have called. But also it was imperfect—in both the protections that it afforded and its enforcement of those protections,” said Cara Greene, an Outten & Golden partner in New York, whose plaintiff firm receives dozens of calls per week from employees thinking they’ve been wrongly denied leave benefits.

“There’s no mechanism to immediately hold employers accountable and to immediately avail employees of the protections of the law if the employer is refusing to provide those protections,” she added.

Some attorneys have predicted an onslaught of litigation from workers, but that’s a trend that can take months to materialize. A few complaints have been filed alleging companies such as Kroger and Eastern Airlines LLC fired employees for requesting leave under the new law. The fired Kroger employee reached an out-of-court agreement with the company, while Eastern’s attorney, Mark Saloman, hasn’t filed an initial response and declined to comment when reached by phone.

Legal Aid at Work in San Francisco and A Better Balance in New York say they’ve each received more than 1,000 worker calls since mid-March. Essential workers, such as a hospital cafe cashier and a nursing home janitor, have learned they’re out of luck, said Sharon Terman, a senior staff attorney at Legal Aid at Work.

“Unfortunately and sadly, the majority of the workers are not covered,” said Sherry Leiwant, co-president of A Better Balance.

Calls Flood Wage Division

The roughly 700 cases concluded by the Wage and Hour Division include an $800 recovery from a Hawaii retailer found to have illegally denied leave to a worker who needed to care for a child whose school was closed; and $1,600 recouped from an Arizona electrical company that didn’t offer paid sick leave when a worker presented a doctor’s note ordering him to quarantine.

The division continues to announce agreements in which a phone call to an employer denying leave has quickly recovered benefits for workers.

“Within days of the paid leave requirements going into effect, wage and hour investigators across the country swiftly and capably responded to worker complaints and brought employers into compliance under this new law—a truly amazing feat, given that prior to March 2020, federal law had never broadly required private employers to provide paid leave,” Deputy Labor Secretary Patrick Pizzella wrote in a May 26 op-ed in Newsweek.

But these cases don’t yield a high return on enforcement investment, relative to the agency’s traditional practice of recovering minimum wage and overtime pay for multiple workers at a single work-site.

After the initial focus on getting the paid sick-leave program running, it took on less importance within a few weeks because so many jobs had disappeared, Labor Secretary Eugene Scalia said during a May 11 webinar. Expanding unemployment insurance and, more recently, workplace-safety guidance, became higher priorities, Scalia said.

“There’s no shortage of work for the Wage and Hour Division to do, now and in the coming months. I don’t think we’re going to see a heavy enforcement push on the paid leave issues. I think we’re more likely to see those issues come up in the context of other investigations,” said Paul DeCamp, a management attorney at Epstein Becker Green in Washington who ran the WHD under President George W. Bush.

The DOL official said enforcing the paid leave law will remain a top priority for 2020 and into 2021.

NY Lawsuit Looms

A pending lawsuit from the New York attorney general accuses Scalia of defying congressional intent by excluding the health-care sector and giving employers leverage to deny leave when work isn’t available.

At oral arguments on May 12, a federal judge in Manhattan called it “a little troubling” that DOL permits employers to reject leave requests when work isn’t available. The judge later asked the Trump administration attorney, “Isn’t it perverse that the statute sweeps” lower-earning nursing assistants “into the exclusion, potentially?”

That lawsuit doesn’t affect the 500-employee cutoff. Changing that would require congressional action.

With the leave provision in effect until Dec. 31, another spike in leave requests is likely on the horizon as small and midsize companies that have survived the pandemic make plans to resume operations before some of their employees are ready.

“These protections really need to apply to everyone so workers can stay healthy and stay safe,” said Terman, from Legal Aid at Work. “They’re also meaningless if people don’t know about them, if they’re not vigorously enforced.”

To contact the reporter on this story: Ben Penn in Washington at bpenn@bloomberglaw.com

To contact the editors responsible for this story: Bernie Kohn at bkohn@bloomberglaw.com; John Lauinger at jlauinger@bloomberglaw.com

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