Daily Labor Report®

Punching In: School’s Out Means Paid Leave’s in for Some Workers

June 1, 2020, 10:00 AM

Monday morning musings for workplace watchers

Summer Leave| Let’s Make a Deal| Rubio’s Late PPP Push

Ben Penn: Workplace policy tensions developed rapidly over the first three months of the Covid-19 era—from a focus on WARN Act notices and unemployment benefits, and then occupational safety liability. Now, as states and localities relax stay-at-home orders, we’re re-entering a period in which paid leave coverage takes on greater significance.

Sure, Congress only extended paid sick and family leave benefits to workers at companies with fewer than 500 employees, and the new coverage doesn’t apply to the millions of workers laid off or furloughed over the past few months. But a tricky issue looms once schools close for the summer for as many as 61 million people still eligible for paid leave under the program.

Parents of children whose schools or day-cares were closed due to the virus have been eligible for up to 10 weeks of family leave paid at two-thirds of their regular rate. But when remote-learning sessions end over the next few weeks, parents will no longer qualify for leave, the Labor Department’s Wage and Hour Division clarified.

However, if Covid-19 causes the closure of “a camp or other programs in which the employee’s child is enrolled,” then that parent “may be able to take leave,” DOL said in the guidance.

Yet there’s still gray area involving parents who didn’t have a child enrolled in camp, perhaps after they gave up trying to find one that would be open, and must stay home to provide care this summer, said San Diego-based, management-side attorney Fred Plevin.

Employers have been dealing with that situation and other paid-leave eligibility ambiguities by contemplating what’s the bigger risk: a lawsuit from a worker if they deny coverage, or an audit from the IRS for being overly generous in granting federally reimbursed benefits?

“We’ve had questions from employers—'How likely is the IRS to audit us, including audit the specific reasons we decided to grant the leave,” said Plevin, incoming chair of the Wage and Hour Defense Institute.

Workers also must make difficult decisions when called back to work. Many are afraid that asking for paid leave could render them jobless.

Advocates fielding calls from workers across the country told me this fear of retaliation was common when workers contemplated requesting leave before the pandemic. The virus-induced economic crisis compounds this concern because everyone is desperate for income.

“Fear of retaliation for exercising their rights is always a concern. That’s another reason why the Department of Labor should make crystal clear to employers and employees that they’re going to vigorously enforce this law,” said Sharon Terman, a senior staff attorney at Legal Aid at Work in San Francisco.

Chris Opfer: This is my last time punching in at “Punching In.”

Instead of taking my talents (and multi-color quarantine beard) to South Beach, I’m moving across the virtual Bloomberg Law news desk to lead our legal industry coverage. Check in with me at our Business of Law page, where all content is currently free. Legal news junkies also can get their fix sent to their inboxes by signing up here.

As I transitioned roles, I spoke with a pair of management lawyers about what the pandemic’s impact on the courts could mean for labor and employment litigation.

Virus-related shutdowns have slowed activity in courts across the country. Although courtrooms are gradually starting to reopen and judges and lawyers are tinkering with telephone conferences, virtual depositions, and video hearings, it’s safe to say that many court battles will take longer to resolve if they go all the way to trial. That’s particularly true in places where courts are prioritizing criminal cases.

The crawling pace of litigation and the financial squeeze the pandemic has put on millions of workers seem to give companies newfound leverage in employment-related lawsuits. The plaintiff side may be willing to settle for less instead of fighting it out in court in the hope of a better deal.

“Settlement becomes probably more attractive to plaintiffs because there is not that timeline to get to trial,” said Elena Baca, global chair of the Paul Hastings employment law department. “But, they will also have to keep expectations lower because many employers have seen a downturn during the pandemic.”

Jason Schwartz, who co-leads Gibson Dunn’s labor and employment practice group, also said the circumstances probably give corporate defendants a leg up in settlement talks. But he added that some companies will jump at the chance to “clear the deck” by resolving cases via negotiation.

“Everyone is incentivized to make a deal,” Schwartz said.

Ian Kullgren: A prominent Senate Republican wants changes to the bill revising the Paycheck Protection Program (H.R. 7010) before it comes to the floor as early as this week. Last week, the House voted to lower the threshold, from 75% to 60%, that businesses must spend on payroll costs in order to have a loan under the program forgiven.

Sen. Marco Rubio (R-Fla.) says the measure removes the partial payment option from the PPP system, meaning businesses would have to pay back the entire loan if they don’t meet the 60% payroll requirement.

That “could create an unintended disincentive to rehiring and create new and serious burdens for PPP borrowers in terms of forgiveness,” Rubio said. He wants to make sure that “necessary changes to increase flexibility do not inadvertently harm business owners and employees in the process.”

Unions blasted House Speaker Nancy Pelosi (D-Calif.) and Senate Minority Leader Chuck Schumer (D-N.Y.) for entertaining an earlier version of the measure that would have nixed the payroll requirement altogether, calling it “a massive retreat on paycheck protection and employee retention.”

Unite Here President D. Taylor wasn’t satisfied with the change to the threshold, either. “Democrats always appear to be negotiating something farther away from what workers need and business keeps getting what it wants,” Taylor said in an interview.

Jaclyn Diaz: It remains to be seen how Rubio’s concerns could affect the bill’s prospects in the Senate. Rubio, who appears to be the main Senate detractor on H.R. 7010, was also one of the PPP’s biggest fans in recent weeks.

Rubio’s late criticism of the bill is seen by some on Capitol Hill as the Floridian trying to save face. Rubio is chairman of the Senate Committee on Small Business and Entrepreneurship, which has jurisdiction over the program. A fast approval by the chamber without his thumbprint may raise some eyebrows.

The bill’s prospects could get a boost from the lack of partisan disagreement in the House, where it passed by a vote of 417-1. Rep. Thomas Massie (R-Ky.) was the sole “no” vote.

House Majority Leader Steny Hoyer (D-Md.) said the House and Senate should be able to quickly agree on possible changes, though with the chamber operating under an abbreviated legislative calendar this month it may be some time before the House votes on a renegotiated version.

On tap this week: The Senate Health, Education, Labor, and Pensions Committee on Wednesday will consider two NLRB nominees—former Democratic member Lauren McFerran and current Republican member Marvin Kaplan—along with three EEOC picks: Democratic nominee Jocelyn Samuels and Republican nominees Andrea Lucas and Keith Sonderling.

The committee also will take up the nominations of Julie Hocker, to be assistant secretary of labor for disability employment policy, and Richard Giacolone, to be director of the Federal Mediation and Conciliation Service.

To contact the reporters on this story: Jaclyn Diaz in Washington at jdiaz@bloomberglaw.com; Ian Kullgren in Washington at ikullgren@bloombergindustry.com; Chris Opfer in New York at copfer@bloomberglaw.com; Ben Penn in Washington at bpenn@bloomberglaw.com

To contact the editor responsible for this story: John Lauinger at jlauinger@bloomberglaw.com

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