Clearing The Air
Employment Practices Committee Discusses Common HR Issues Related To Pandemic
As companies grapple with the multitude of issues associated with working conditions brought about by the COVID-19 Pandemic, many are turning to legal and human resource specialists for answers.
One such group that monitors and tackles human relations issues and labor-related practices within the commercial construction industry is right here at AGC Houston: the Employment Practices Committee, which meets on a quarterly or as-needed basis.
Early morning on Thursday, April 2, 2020, 30 AGC Houston members, representing legal, HR and financial specialists, met virtually for a one-hour discussion on hot topics as they relate to the pandemic.
Led by Committee Co-Chair Audra Bateman-Athey, Cherry Companies, as well as Tony Stergio, Andrews Myers, PC and Shannon Gatlin, Cokinos | Young, discussions focused on:
- Impact of COVID-19 and Construction
- CARES Act - CARES includes Paycheck Protection Program, Economic Injury Disaster Loans, and Payroll Tax Credit
- Families First Coronavirus Relief Act (FFCRA) - FFCRA provides Paid sick leave and emergency FMLA
The CARES and FFCRA Acts
As the new "normal" is anything but normal, Stergio explained how the Families First Coronavirus Relief Act and Coronavirus Aid, Relief, and Economic Security Act (CARES) apply to the construction industry. As part of the CARES law, the Paycheck Protection Program was enacted to allow small businesses to borrow money to help keep their businesses in operation.
"The two Acts work hand-in-hand; the Emergency Paid Sick Leave provides for full regular rate if an employee is quarantined by the government from working at the advice of a health provider or for a diagnosed treatment of COVID-19; this is for 10 days of paid leave. It covers two thirds of the salary, if you are caring for a quarantined individual, a parent, or a child due to the unavailability of school or child care.
"After the 10-day period, the 10-Week Act comes into effect due to school or daycare closures. So, you have 10 days of pay under one Act and 10 weeks of benefits to take care of a child after that.” He underscored that this applies to companies with less than 500 employees. The 500 count number is measured at the time from when employee leave is taken. “This is different from the CARES Act, which has a “picture of time” taken between February and June, and you measure the number of employees during that time frame.”
To complicate things even further, companies that have less than 500 employees could reach into the “above the 500” limitation: “If you are in a Joint Employer situation and you have integrated enterprises under common ownership and common equipment usage, then the total employees of those additional divisions could count,” Stergio explained. He also said that because the Acts were voted on so quickly, there are a lot of unanswered questions brought about by individuals and employers, which the Department of Labor is continuously addressing.
Gatlin followed up on a point, which addresses the number of qualifying employees for a company regarding Paid Sick Leave. “We have run into an issue that a general contractor company is currently facing: they have fewer than 500 employees however, they have a side business that supplies them a lot of materials. Because the general contractor makes up a large percentage of the supplier’s revenue, that now falls under the Small Business Administration’s Affiliate Rules. They have to comply with the Paid Sick Leave and FMLA but, they cannot qualify for the SBA loan in place under the CARES Act, which is a great lifeline for businesses.”
Small Business Administration Loans Explained Under The CARES Act
Late on Tuesday, March 31, 2020, the Department of Treasury set some guidance to financial lenders and banking institutions that will be implementing the SBA loans, beginning April 3.
Businesses with fewer than 500 employees, 501c (3) organizations, sole proprietors and freelancers are eligible for the Paycheck Protection Program.
The PPA loans are backed by the SBA but provided by lenders and can be forgiven if the funds are used for operational expenses, payroll expenses, mortgage payments, rent and utility costs. Gatlin encouraged businesses with fewer than 500 employees to contact their existing bank, which will give their customers priority to process the special loans under the CARES Act.
“They can provide you with a brief fact sheet that goes over the Acts, the details of the “forgiveness loans” and the qualifications to apply. The loans have a .5 percent interest rate, which you will never get better than that! The SBA is encouraging businesses to apply as soon as possible because while $349 billion dollars - which was approved - sounds like a lot, they fully expect the funds to run out.”
Workers who were laid off can apply for benefits and receive payments of up to 39 weeks. This also includes those who have to care for someone with the Coronavirus and individuals who have the virus and cannot work as well.
Another question that Stergio answered related to employees who choose not to work because they are scared of contracting the virus and if they qualify for benefits? “There is an exception to unemployment that if you voluntarily quit your employment due to health reasons, you can still qualify for benefits,” he said.
“The question is going to be: are they quitting because of health reasons? I have a feeling that the Texas Workforce Commission is going to be fairly liberal during this crisis.” Gatlin chimed in, agreeing and added: “I think that the TWC will also be very liberal with benefits, and in particular, will waive the “charge back” to employers during this period.”
Other subjects that closed out the meeting included COVID-19 being a recordable incident by OSHA; paid leave; tax credits and an explanation by Brann on the new regulations regarding early withdrawals, and loan limitations from 401(k) accounts.
“For all of us who manage HR and benefits for companies, this group of experts provides valuable advice as we try to navigate the best options for ourselves and our companies. We work under strenuous times and understanding these new regulations is critical,” said Bateman-Athey.