What the Orders Say
To mitigate the impact of COVID-19 and protect the capacity of New Jersey’s health care system, on March 21, 2020, Governor Phil Murphy signed Executive Orders No. 107 and 108, directing all residents to stay at home until further notice. The Executive Order No. 107 provides for certain exceptions, such as obtaining essential goods or services, seeking medical attention, visiting family or close friends, reporting to work, or engaging in outdoor activities.
Executive Order 107 further directs the closure of all non-essential retail businesses to the public, with the exceptions of:
- Grocery stores, farmer’s markets and farms that sell directly to customers, and other food stores, including retailers that offer a varied assortment of foods comparable to what exists at a grocery store;
- Pharmacies and medical marijuana dispensaries;
- Medical supply stores;
- Gas stations;
- Convenience stores;
- Ancillary stores within healthcare facilities;
- Hardware and home improvement stores;
- Banks and other financial institutions;
- Laundromats and dry-cleaning services;
- Stores that principally sell supplies for children under five years;
- Pet stores;
- Liquor stores;
- Car dealerships, but only for auto maintenance and repair, and auto mechanics;
- Printing and office supply shops;
- Mail and delivery stores.
Additionally, Executive Order 107 mandates that all businesses or non-profits, wherever practicable, must accommodate their workforce for telework or work-from-home arrangements. To the extent a business or non-profit has employees that cannot perform their functions via telework or work-from-home arrangements, the business or non-profit should make best efforts to reduce staff on site to the minimal number necessary to ensure that essential operations can continue. The Gordon & Rees New Jersey attorneys are working remotely and are available to respond to your questions and concerns, and to guide you and your companies through the myriad of employment issues arising under the Governor’s Orders and the National Emergency.
The Order continues existing bans on recreational and entertainment businesses, requirements that all restaurants operate by delivery and takeout only.
Over the past two weeks, several municipalities enacted restrictions to curtail movement of citizens that reside or work in their respective localities. In Teaneck, New Jersey, one of the hotspots for the outbreak, Mayor Mohammed Hameeduddin asked all of the township’s 40,000 residents to self-quarantine themselves, only leaving their homes for food and medicine. On March 18, 2020, Mayor Ras Barakas of Newark ordered that non-essential retail, such as liquor stores, close until further notice. However, also on March 21, 2020, Governor Murphy signed Executive Order No. 108, which invalidates any county or municipal restriction that in any way will or might conflict with any of the provisions of Executive Order No. 107. Municipalities or counties cannot 1) make any additions to or deletions from the list of essential retail businesses; 2) impose any additional limitations on businesses beyond the Governor’s Order; 3) impose any additional density or social distancing requirements; or 4) impose any additional restrictions on freedom of movement. The only exceptions are two categories over which municipalities or counties may impose any additional restrictions: 1) online marketplaces for arranging or offering lodging and 2) municipal or county parks.
Changes to Your Workforce
Whether or not your business is deemed “essential," you may be considering changes to your workforce for employee safety and in response to the undeniable economic impact of the pandemic. Such changes may include furloughing employees, laying off employees, or reducing an employee’s rate of pay/hours.
In New Jersey, an employer is only required to advise an employee, in writing, if it is reducing its rate of pay/hours; an employer does not need to provide an employee notice of a furlough or layoff (unless the layoff is subject to the New Jersey WARN Act, as described below). However, some employers may decide to provide written notice to employees of their decision, the reason and assurance that these measures are only being taken in response to the pandemic and with the ultimate goal of returning to business as usual in the near future. We suggest you consider all available options carefully before making any decision, and refer to the following chart for an overview.
§ Advise employees they must not work during the furlough period and consider keeping employer issued mobile devices and limiting or cutting off email access.
§ Employee receipt of continuation of health benefits dependent on health insurance policies, plan documents and other policies or agreements with employees.
§ Employee may be entitled to state sick pay under the New Jersey Paid Sick Leave (“NJ PSL”).
§ Employee is entitled to federal sick pay under the Families First Coronavirus Response Act “FFCRA” if employer has 500 or fewer employees.
§ See below regarding more detail on the NJ PSL and the FFCRA.
A layoff is the removal of an employee from the workforce, without any guarantee of returning to work.
§ Final pay due must be made no later than the next regular pay day (which may not be more than 10 days from the end of the work period for which such wages were earned). Unused vacation or PTO may need to be paid out depending on company policy.
§ You not need to pay accrued paid sick leave at time of termination or layoff.
§ If you layoff or terminate a salaried employee, you need only pay them through the final day’s work.
Reduction in Pay
Reducing an employee’s hourly rate or prospective salary
§ Ensure you pay hourly, non-exempt, non-tipped employees minimum wage. The statewide minimum wage is $11 per hour; however, municipalities may have higher minimum wages (there are also differently hourly rates for workers in the fast food industry and those who receive tips).
Reduction in Hours
Reduce hours for non-exempt employees and pay only the hours worked.
§ Take care not to reduce hours in a way that appears discriminatory – such as only for higher paid (and generally older) workers.
Work From Home
An employee is permitted to work remotely (out of the office), generally by accessing employer files through a virtual desktop.
§ There are no laws governing reimbursing employees for expenses when working from home in New Jersey. However, employers may want to consider reimbursement to their employees for such expenses as home internet, cell phone usage, printer ink, paper, and other relevant supplies. Demand proof of incurred expenses.
New Jersey Warn Act
If you are an individual or private business establishment that has been in operation in the State of New Jersey for longer than three years and you employ 100 or more full-time employees, you must comply with the NJ WARN Act if you anticipate a "mass layoff." A “mass layoff” means a reduction in force which is not the result of a transfer or termination of operations and which results in the termination of employment at an establishment during any 30-day period for 500 or more full-time employees or for 50 or more of the full-time employees representing one third or more of the full-time employees at the establishment.
Before the first termination of employment occurs, an employer must provide no less than 60 days advance notice in writing to the following entities:
- Commissioner of Labor and Workforce Development;
- The chief elected official of the municipality where the establishment is located;
- Each employee whose employment is to be terminated; and
- Any collective bargaining unit of employees at the establishment.
A severance must be provided to each full-time terminated employee to whom the employer provides less than the number of days of notification. Calculation is equal to one week of pay for each full year of employment and is in addition to any other severance paid for any reason. Back pay provided by the employer to conform to the WARN law is credited towards meeting this severance pay criteria.
On January 21, 2020, Governor Murphy signed Senate Bill 3170 into law effective July 19, 2020, amending the NJ WARN Act. The amendments, when they take effect, will dramatically alter the landscape for businesses instituting a large-scale reduction in force in New Jersey. As one of the changes, the July 2020 law will make New Jersey the first state in the Country mandating severance pay for mass lay-offs even if timely notice is given, which has increased from 60 to 90 days.
Other Laws to Keep in Mind
New Jersey Paid Sick Leave (PSL)
Under New Jersey’s Paid Sick Leave, an employee is entitled to up to five (5) days of paid leave to be used in any of the following instances:
- A person who has COVID-19, or symptoms of COVID-19;
- A worker was unable to work because of school or daycare closed for a public health reason;
- A worker was exposed and quarantined and his employer remains open;
- A person who is out of work because employer was ordered closed;
- An employer stays open in defiance of public health urging to close, and worker refuses to work;
- A worker is afraid of gathering in a group and refuses to go to work (self-distancing);
- A worker is immune-compromised and advised by healthcare provider to self-quarantine;
- A health care worker exposed at work and self-quarantine; or
- A worker is caring for a sick family member
New Jersey Unemployment Insurance
If an employee’s hours are reduced, but not completely cut, he/she may be able to collect Unemployment Insurance Benefits. Specifically, to be eligible for partial unemployment benefits, the person cannot work more that 80% of the hours normally worked. For example, if a person normally works 40 hours a week, they cannot work more than 32 hours in a week to be eligible. Additionally, if the person earns 20% or less of their weekly benefit rate, the person would receive the full weekly benefit. For earnings greater than the 20%, the weekly benefit would be reduced.
New Jersey Shared Work Program
New Jersey’s Shared Work Program lets businesses temporarily reduce the hours of their employees, instead of laying them off during economic downturns.
The Shared Work Program benefits both businesses and workers as businesses retain their trained workforce, for easy recall to full-time work when economic conditions improve, while workers keep their jobs instead of being laid off, and collect reduced unemployment benefits to partially replace their lost wages.
Specifically, in New Jersey, an employer who has not less than 10 employees, who are each employed for not less than 1,500 hours per year, may apply to the of Unemployment and Temporary Disability Insurance of the Department of Labor and Workforce Development for approval to provide a shared work program, the purpose of which is to stabilize the employer’s work force during a period of economic disruption by permitting the sharing of the work remaining after a reduction in total hours of work. An individual who is employed by an employer with a shared work program approved by the Division shall be eligible for short-time benefits during a week if:
a. The individual works for the employer at an affected unit less than the individual’s usual weekly hours of work, and the employer has reduced the individual’s weekly hours of work pursuant to a shared work program in effect during that week;
b. The percentage of the reduction of the individual’s work hours below the individual’s usual weekly hours of work is not less than 10% and not more than 60%, with a corresponding reduction of wages;
c. The individual would be eligible for unemployment benefits other than short-time benefits during the week, if the individual was entirely unemployed during that week and applied for unemployment benefits other than short-time benefits; and
d. During the week, the individual is able to work and is available for the individual’s usual weekly hours of work with the shared work employer.
The amount of short-time benefits paid to an eligible individual shall, for any week, be equal to the individual’s weekly benefit rate multiplied by the percentage of reduction of his wages resulting from reduced hours of work.
New Federal Sick Leave Law
The Families First Coronavirus Response Act (“FFCRA”) is effective April 2, 2020. Employers of up to 500 employees are required to provide Emergency Paid Sick Leave (EPSL) to their employees without regard for eligibility or time worked requirements. Please note, if you allow an employee to go on leave (whether paid or unpaid) or furlough an employee (as opposed to a layoff), then your employees are entitled to this EPSL.
Reasons for leave:
- The employee is subject to a Federal, State, or local quarantine or isolation order related to COVID-19 – note this would include any employee subject to a shelter in place order provided they do not work for a business providing an essential service. If your employees are working because they are providing an essential service, then the employee could not use EPSL to take time off for this particular reason. The following reasons may still apply.
- The employee has been advised by a healthcare provider to self-quarantine due to concerns related to COVID-19.
- The employee is experiencing symptoms of COVID-19 and seeking a medical diagnosis.
- The employee is caring for an individual who is subject to an order as described in subparagraph 1 above or has been advised as described in paragraph 2 above.
- The employee is caring for a son or daughter of such employee if the school or place of care of the son or daughter has been closed, or the childcare provider of such son or daughter is unavailable, due to COVID-19 precautions.
- The employee is experiencing any other substantially similar condition specified by the Secretary of Health and Human Services in consultation with the Secretary of the Treasury and the Secretary of Labor.
Hours of paid leave:
- Full Time – 80 hours
- Part Time – average hours for a 2-week period.
If you intend to have employees remain on staff who would be eligible for EPSL, contact one of our attorneys so we can guide you through how much to pay. Your business may be entitled to tax credit for providing this type of leave.
As this law applies to employers with up to 500 employees, you may have questions about how this total is calculated. If under the FMLA, your company and subsidiaries are considered integrated then it is true for FFCRA. FMLA follows Title VII guidance for whether subsidiaries are integrated. The factors to consider are:
§ interrelation of operations, i.e., common offices, common record keeping, shared bank accounts and equipment;
§ common management, common directors and boards;
§ centralized control of labor relations and personnel, i.e., hire and fire employees; and,
§ common ownership and financial control.
The factors are not evaluated as stand-alone. The entire relationship is to be reviewed in its totality.
The link to details on the FFCRA can be found here.
The full text of the act is here. The Emergency Paid Sick Leave act begins at page 46.