On March 19, 2020, in an effort to slow the spread of COVID-19, Pennsylvania Governor Tom Wolf issued an order directing all non-life-sustaining businesses to close their physical locations effective March 19 at 8 p.m. The order provides a process for applying for a waiver, but, due to the high volume of waiver requests, enforcement was delayed until Monday, March 23, 2020, at 8 a.m.
Companies can check this list to see whether they are on the list of life-sustaining businesses, or they can email Department of Community and Economic Development (DCED) customer service at email@example.com, or call 1-877-PA-HEALTH and select option 1 to reach DCED staff. Companies that are designated non-life-sustaining, but would like to seek a waiver, can apply via the online waiver application. Reed Smith attorneys are available to help you determine whether your company is designated life-sustaining or not and assist with the waiver process.
Q – What does it mean for my employees that my company is one that must shut down under Governor Wolf’s order?
A – It depends. The order does allow remote work, so if employees can work from home, they are permitted to do so. In the event your company cannot conduct operations remotely and must close, you may need to make some decisions about your workforce, including whether to furlough employees or lay them off. Under Pennsylvania unemployment compensation law, an eligible worker can collect unemployment benefits for a reduction in work, furlough, or layoff.
Q – What is the difference between “furlough” and “layoff”?
A – As used here, a furlough (sometimes referred to as a temporary layoff) is an unpaid leave of absence with the intention that an employee will be recalled to work, usually within six months. Depending on your benefit plan, the employee may be eligible to continue company health benefit coverage. A layoff is a termination of the employment relationship with the employee due to lack of work. Note that if your employees are represented by a union or are covered by a collective bargaining agreement, these terms may be defined by that agreement.
Q – When can my employees apply for unemployment compensation benefits?
A – According to Pennsylvania’s unemployment site, employees should file an application for unemployment benefits immediately upon becoming unemployed, being furloughed, or having their hours reduced. The seven-day waiting period has been waived. In Pennsylvania, if employees’ hours of work have been reduced or if they otherwise continue to work less than their normal full-time work week, or if the employees have been furloughed, they may be eligible for partial benefits, and employees should apply for these benefits upon learning of such employment decision.
Q – What is considered the “last day worked”?
A – In Pennsylvania, the “last day worked” for employees is the last day for which they were paid (or paid their full rate where the employee is seeking unemployment due to a reduction in hours).
Q – Do I have to provide notice to my employees if they are being furloughed or laid off? (What are my obligations under the WARN Act and related municipal ordinances?)
A – It depends. If you know that your employees will return to work within six months, you do not need to comply with the WARN Act. If, however, you decide to furlough your employees and you anticipate that the furlough will be for more than six months, or if you decide to permanently lay off your employees, you most likely will have to follow the required obligations under the federal WARN Act. You should consult with your trusted labor and employment counsel for specific information.
Q – Am I required to pay my employees severance?
A – Neither federal nor Pennsylvania law currently require an employer to provide severance pay. However, if you have a company severance plan or policy, you likely will have to comply with its terms.
Q – How do I handle PTO and vacation time?
A – If you permanently lay off your employees, you may be required to pay out earned unused PTO and vacation time, depending on what your company’s policy or practice is. An employee who has been furloughed (but remains employed) can use PTO or vacation time if your policy permits it. You may be able to restrict the use of PTO and vacation time in order to ensure that employees have it available when they return to work or to preserve cash. However, this will be policy dependent and may also depend on local ordinances. For example, employees in Philadelphia may be eligible to use PTO under that city’s ordinances.
Q – Under what circumstances am I required to provide paid sick leave?
A – If you are an employer with fewer than 500 employees (which includes part-time employees, but exempts certain health care providers and emergency responders; the Department of Labor has the authority to exempt small employers with fewer than 50 employees, where the added expense would jeopardize the business), you may be required to provide leave under the Emergency Paid Sick Leave Act (effective April 2, 2020). Full-time employees are entitled to 80 hours of paid leave; part-time employees are entitled to an amount equal to their average weekly hours over a two-week period.
In addition, employers in Philadelphia and Pittsburgh may have to comply with the paid sick leave laws in those cities.