In response to the COVID‑19 pandemic, federal laws and a State executive order have been passed, which will dramatically affect Michiganders over the next few months. First, and probably most significantly, with a large portion of the population placed into social isolation and not able to work, the unemployment spicket has been opened up to full throttle to accommodate workers and provide sustenance. Novel in this approach is the provision for wage replacement benefits for those traditionally not afforded unemployment benefits.

Additionally, with regard to those who are mandated as essential, but otherwise cannot work because of a COVID-related reason, there are new sick leave allowances and pay owed from what are regarded as small to midsize employers.

Generally, both the expanded unemployment benefits and mandatory sick time and pay will ultimately be funded by the State and federal governments though tax credits and simply not charging these payments to employer unemployment accounts.

Unemployment Provisions

Unemployment benefits have been expanded in scope, amount and length of benefits. Leaves that would traditionally have not qualified for benefits will now qualify. Gone now as well is the requirement for job search as it is now presumed that COVID‑19 has eliminated suitable work. Workers may now apply further retroactively and qualify for 26 weeks of State benefits, extended even further federally. Employers’ unemployment accounts will not be charged for benefits.

The federal government will expand the traditional maximum State benefit of $362 by $600. These benefits will be available for up to 4 months. Workers that have not traditionally qualified for unemployment benefits (self-employed workers, independent contractors, low-wage workers and those with a limited work history) will now qualify if they are unable to otherwise work because of any COVID-related reason and not receiving sick pay. Currently the State Unemployment Insurance Agency is setting up its application system to accommodate this new class of worker and advises to wait to file for benefits.

The Michigan Unemployment Insurance Agency has not traditionally had the best of reputation for being consistent, efficient or even accurate. It will be interesting to see how it handles the sheer mass of claims and the new orders and laws it will be administratively interpreting.

Key Provisions of Governor’s Executive Order 2020-24 (Temporary expansions in unemployment eligibility and cost-sharing)

Strict compliance with subdivision (a) of subsection (1) of section 29 of the Michigan Employment Security Act, MCL 421.29(1)(a) is temporarily suspended in two ways. Normally, to be qualified for unemployment the worker must have been terminated involuntarily or left the job for good cause that was attributable to the employer. If they had left involuntarily for a medical reason they would have to, “secure[] a statement from a medical professional that continuing in the individual’s current job would be harmful to the individual’s physical or mental health; unsuccessfully attempt[ ] to secure alternative work with the employer; and unsuccessfully attempt[] to be placed on a leave of absence with the employer to last until the individual’s mental or physical health would no longer be harmed by the current job.”

Counter to this, Paragraph 1 of Executive Order 2020-24 dictates that:

  1. An individual must be considered to have left work involuntarily for medical reasons if they leave work because of self-isolation or self-quarantine in response to elevated risk from COVID‑19 due to:
    1. being immunocompromised;
    2. displaying the symptoms of COVID‑19;
    3. having contact in the last 14 days with someone with a confirmed diagnosis of COVID‑19;
    4. the need to care for someone with a confirmed diagnosis of COVID‑19;
    5. a family care responsibility as a result of a government directive.
  2. An individual may be deemed laid off if they became unemployed because of self-isolation or self-quarantine in response to elevated risk from COVID‑19 due to:
    1. being immunocompromised;
    2. displaying the symptoms of COVID‑19;
    3. having contact in the last 14 days with someone with a confirmed diagnosis of COVID‑19;
    4. the need to care for someone with a confirmed diagnosis of COVID‑19;
    5. a family care responsibility as a result of a government directive.

Normally, employees that go on a voluntary leave of absence, either at their own volition or per agreement with their employer, are not considered eligible for unemployment. Paragraph 2 of Executive Order 2020-24 suspends this provision within the MESC, MCL 421.48(3), and mandates that the employee must be considered unemployed unless the individual is already on sick leave or receives a disability benefit as of the time of the Order (March 16, 2020). Specifically, Paragraph 2 of Executive Order 2020-24, mandates the following are qualified:

  1. An individual on a leave of absence because of self-isolation or self-quarantine in response to elevated risk from COVID‑19 due to:
    1. being immunocompromised;
    2. displaying the symptoms of COVID‑19;
    3. having contact in the last 14 days with someone with a confirmed diagnosis of COVID‑19;
    4. the need to care for someone with a confirmed diagnosis of COVID‑19;
    5. a family care responsibility as a result of a government directive.

Notably, Paragraph 2 of Executive Order 2020-24 leaves intact MCL 421.48(1), and (2). Subsection 1 mandates that job reduction (e.g., job-sharing) does not qualify the employee for unemployment unless his or her hours have been reduced to less than 1 and ½ times his or her weekly benefit rate. The maximum benefit rate is $362 per workweek. Earning more than $543 per week will per se disqualify one from benefits. Further, even if the employee earned less than $543 per workweek, that pay would still be used to reduce benefits. Benefits are reduced by 50 cents on the dollar for all wages earned.

Likewise Subsection 2 mandates that vacation and holiday pay, amounts paid in the form of retroactive pay, pay in lieu of notice, severance payments, salary continuation, or other remuneration intended by the employing unit as continuing wages or other monetary consideration as the result of the separation constitutes remuneration and will, as such, reduce benefit payment.

Paragraph 3 of Executive Order 2020-24 doubles the amount of days a worker may retroactively claim benefits; from 14 days to 28 days.

Paragraph 4 of Executive Order 2020-24 increases the number of possible eligible weeks of benefits from 20 to 26 weeks payable in a benefit year.

Paragraph 5 of Executive Order 2020-24 allows the UIA to approve a job-sharing plan without the plan necessarily meeting the requirements of the law. Generally, the employer desiring a job-sharing plan will have to be up-to-date on all filings and payments to the UIA, have a positive account reserve and experience rating in excess of 1 year.

Paragraph 6 of Executive Order 2020-24 suspends charging benefits to employer accounts, with exception for employers that misclassify employees.

Paragraph 7 of Executive Order 2020-24 suspends the requirement of seeking suitable work as generally would otherwise be mandated by MCL 421.28. Suitable work is presumed unavailable because of COVID‑19. This satisfies the work search requirement of the Act. I would presume, however, that remuneration received must continue to be reported.

Executive Order 2020-24 currently is in effect until April 22, 2020.

CARES ACT – Title II(A) – “Relief for Workers Affected by Coronavirus Act”

There are largely two relevant sections to CARES ACT Title II(A) for most people. These include benefits for traditionally unemployed workers, and a novel program for self-employed workers, independent contractors, low-wage workers and those with a limited work history (all of whom would not traditionally receive unemployment compensation).

Sections 2104 and 2107 of the Act will provide workers that traditionally have been eligible to realize a boost in the cash amount and eligibility weeks of their unemployment benefits. Weekly benefits for all unemployed workers will be increased by $600 a week for up to four months. This applies to workers already in the unemployment system and eligible employees about to apply.

Section 2102 of the Act provides workers that usually are not eligible to claim eligibility to a State benefits a yet undisclosed State benefit (which currently appears as if Michigan is going to pay up to $362 a week) plus a federal payment of $600 per week for up to four months. This will apply to all except those that are able to tele-work or those that are receiving paid sick leave.

Paid Sick Leave

For those employees that work in an essential industry, and are thus not deprived of work, there are sick leave benefits available. Unlike other leave statutes, the Families First Coronavirus Response Act has an employee cap of 500 employees. Essentially, except for those that are able to tele-work while being under quarantine/self-isolation, the benefits are available to all that are unable to work for a COVID-related reason.

Families First Coronavirus Response Act

The FFCRA amends the Family and Medical Leave Act for the period of April 2, 2020 through December 31, 2020 and requires employers with less than 500 employees to provide their employees with paid sick leave or expanded family and medical leave for reasons related to COVID‑19. Small businesses with fewer than 50 employees may qualify for an exemption from the requirement to provide leave due to school closings or child care unavailability if the leave requirements would jeopardize the viability of the business as a going concern.

Generally, the Act provides that covered employers must provide to all employees:

  • Two weeks (up to 80 hours) of paid sick leave at the employee’s regular rate of pay where the employee is unable to work because the employee is quarantined (pursuant to Federal, State, or local government order or advice of a health care provider), and/or experiencing COVID‑19 symptoms and seeking a medical diagnosis; or
  • Two weeks (up to 80 hours) of paid sick leave at two-thirds the employee’s regular rate of pay because the employee is unable to work because of a bona fide need to care for an individual subject to quarantine (pursuant to Federal, State, or local government order or advice of a health care provider), or care for a child (under 18 years of age) whose school or child care provider is closed or unavailable for reasons related to COVID‑19, and/or the employee is experiencing a substantially similar condition as specified by the Secretary of Health and Human Services, in consultation with the Secretaries of the Treasury and Labor.

A covered employer must provide to employees that it has employed for at least 30 days:

  • Up to an additional 10 weeks of paid expanded family and medical leave at two-thirds the employee’s regular rate of pay where an employee is unable to work due to a bona fide need for leave to care for a child whose school or child care provider is closed or unavailable for reasons related to COVID‑19.

Under the FFCRA, an employee qualifies for paid sick time if the employee is unable to work (or unable to tele-work) due to a need for leave because the employee:

  1. is subject to a Federal, State, or local quarantine or isolation order related to COVID‑19;
  2. has been advised by a health care provider to self-quarantine related to COVID‑19;
  3. is experiencing COVID‑19 symptoms and is seeking a medical diagnosis;
  4. is caring for an individual subject to an order described in (1) or self-quarantine as described in (2);
  5. is caring for a child whose school or place of care is closed (or child care provider is unavailable) for reasons related to COVID‑19; or
  6. is experiencing any other substantially-similar condition specified by the Secretary of Health and Human Services, in consultation with the Secretaries of Labor and Treasury.

Under the FFCRA, an employee qualifies for expanded family leave if the employee is caring for a child whose school or place of care is closed (or child care provider is unavailable) for reasons related to COVID‑19.

Duration of Leave:

For reasons (1)-(4) and (6): A full-time employee is eligible for up to 80 hours of leave, and a part-time employee is eligible for the number of hours of leave that the employee works on average over a two-week period.

For reason (5): A full-time employee is eligible for up to 12 weeks of leave at 40 hours a week, and a part-time employee is eligible for leave for the number of hours that the employee is normally scheduled to work over that period.

Calculation of Pay:

For leave reasons (1), (2), or (3): employees taking leave shall be paid at either their regular rate or the applicable minimum wage, whichever is higher, up to $511 per day and $5,110 in the aggregate (over a 2-week period).

For leave reasons (4) or (6): employees taking leave shall be paid at 2/3 their regular rate or 2/3 the applicable minimum wage, whichever is higher, up to $200 per day and $2,000 in the aggregate (over a 2-week period).

For leave reason (5): employees taking leave shall be paid at 2/3 their regular rate or 2/3 the applicable minimum wage, whichever is higher, up to $200 per day and $12,000 in the aggregate (over a 12-week period—two weeks of paid sick leave followed by up to 10 weeks of paid expanded family and medical leave).

Tax Credits: Covered employers qualify for dollar-for-dollar reimbursement through tax credits for all qualifying wages paid under the FFCRA. Qualifying wages are those paid to an employee who takes leave under the Act for a qualifying reason, up to the appropriate per diem and aggregate payment caps. Applicable tax credits also extend to amounts paid or incurred to maintain health insurance coverage. For more information, please see the Department of the Treasury’s website.

Employer Notice: Each covered employer must post in a conspicuous place on its premises a notice of FFCRA requirements.

Prohibitions: Employers may not discharge, discipline, or otherwise discriminate against any employee who takes paid sick leave under the FFCRA and files a complaint or institutes a proceeding under or related to the FFCRA.

Penalties and Enforcement: Employers in violation of the first two weeks’ paid sick time or unlawful termination provisions of the FFCRA will be subject to the penalties and enforcement described in Sections 16 and 17 of the Fair Labor Standards Act. 29 U.S.C. 216; 217, which generally includes wage loss, liquidated damages, compensatory damages and attorneys’ fees. Employers in violation of the provisions providing for up to an additional 10 weeks of paid leave to care for a child whose school or place of care is closed (or child care provider is unavailable) are subject to the enforcement provisions of the Family and Medical Leave Act. There will be a temporary period of non-enforcement for the first 30 days after the Act takes effect, so long as the employer has acted reasonably and in good faith to comply with the Act. For purposes of this non-enforcement position, “good faith” exists when violations are remedied and the employee is made whole as soon as practicable by the employer, the violations were not willful, and there is a written commitment from the employer to comply with the Act in the future.

Employment Law
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