Potential Federal & State COVID-19 Economic Relief for Vermont

Note that all Sheehey guidance regarding COVID-19 is subject to change, as the legal landscape is evolving rapidly. Please note the date of publication for this bulletin, and be aware that things may have changed since then. Please check our COVID-19 landing page for the most up-to-date posts and contact us with any questions.

Updated March 19, 2020

In response to the COVID-19 Pandemic, Congress passed, and the President signed, the Families First Coronavirus Response Act (the “Federal Law”) into law. Additionally, the Vermont House of Representatives passed a bill to address and ameliorate the economic impact on businesses and workers from the Pandemic. The Vermont Bill has not been addressed by the State Senate and is not law. It is uncertain when the bill will be passed into law or what the final version will include.

Below is a summary of how the Federal Law and Vermont Bill address the following issues and areas.

SICK LEAVE BENEFITS 

What is immediately available to employees during the COVID-19 Pandemic?

The new Federal Law creates two new paid sick leave options. The first option expands the current Family Medical Leave Act (“FMLA”) requirement for 12 weeks of leave for certain medical issues. This expansion requires employers with 500 or fewer employees to provide an employee with leave if that employee is unable to work or telework because the employee must care for their child (under the age of 18) whose school closed or child care provider is unavailable due to the COVID-19 public health emergency. (“Emergency FMLA”). Although employers with more than 500 employees are exempt from the new Emergency FMLA, they are still otherwise required to comply with the pre-existing provisions of the FMLA.

The first ten days of this Emergency FMLA leave are unpaid. Subsequent days must be paid to the employee at a rate reflecting two-thirds of the employee’s regular rate, not to exceed $200 a day and $10,000 in total. The Secretary of Labor is authorized to exempt businesses with fewer than 50 employees if the Emergency FMLA provisions would jeopardize the business’s viability. The Secretary of Labor may also issue rules exempting healthcare providers and emergency responders from the definition of employees who are allowed to take Emergency FMLA. Under Emergency FMLA, employers with 25 or more employees have the same obligation to rehire the employee to the same or equivalent position when they are ready to return to work. Smaller employers are excluded from this requirement if they meet certain requirements.

The Federal Law also creates an additional and more employee friendly Emergency Paid Sick Leave Benefit. Under this provision, an employee may take Paid Sick Leave if they are 1) subject to a quarantine or isolation order; 2) advised to self-quarantine by a medical professional; 3) experiencing COVID-19 symptoms and seeking medical care; 4) caring for another person subject to a quarantine or isolation order or self-quarantine; 5) caring for an employee’s child if school/child care provider is closed due to a public health emergency; or 6) experiencing any other condition substantially similar and designated by the appropriate government official. This leave also applies to employers with fewer than 500 employees. the employer must provide full time employees with 80 hours of paid sick leave days for COVID-19 related leave and part-time employees with paid sick time equal to the number of hours the employee would work over a standard two-week period. This paid sick leave is immediately available to employees regardless of how long they have been employed. Employers must provide paid leave at the employee’s full wage rate if the employee is sick or under quarantine (subject to the limitation that the daily amount shall not exceed $511), and at two thirds (2/3) pay if the employee is taking COVID-19 related leave to care for a family member or child (limited to a maximum of $200 per day). The law provides that subsequent regulations could permit certain exemptions for employers of fewer than 50 people.

The provisions of the Emergency FMLA and the Emergency Paid Sick Leave go into effect on April 2, 2020 and expire on December 31, 2020.

What if I already offer paid sick leave or other benefits to my employees?

The above paid benefits are meant to be a minimum and complement state and employer programs that are more generous—not replace them entirely. The general rule is that employees will have the option to take the more generous leave available to them, and an employer cannot require an employee to use other time the employee may have accrued in place of the paid sick leave required under the new Federal Law if they are eligible for it. Employees who have accrued paid time off of any kind may use it for the first 10 days of Emergency FMLA before qualifying for the paid sick leave under the Emergency FMLA.

UNEMPLOYMENT BENEFIT

What unemployment benefits are available to employees who are affected by COVID-19?

The Vermont Bill expands eligibility for State Unemployment Compensation to employees who voluntarily leave their jobs to take care of a parent, spouse, child, or other qualified relative. That relative must be diagnosed with COVID-19 to make the employee eligible for unemployment compensation benefits. This eligibility is still subject to the other requirements and limits of Vermont Unemployment Compensation. To be clear, this provision is not yet a law.

Additionally, the Federal Law expands funding for unemployment compensation. It is unclear at this time how this expanded funding will translate to benefits in Vermont.

What if an employee claiming unemployment compensation already took paid sick leave?

An employee will not be eligible for unemployment benefits for any week that they received paid sick leave.

Will these expanded unemployment benefits hurt my Experience Rating and increase my unemployment taxes?

The Vermont Bill would adjust the Experience Rating calculation to ignore payments made in relation to COVID-19 in three scenarios.

For one, if the employee leaves their job to care for a qualified relative, then all the unemployment benefits paid to that employee will be excluded from the Experience Rating.

Additionally, there are two scenarios in which unemployment compensation payments for up to four (4) weeks will be excluded from the Experience Rating. If (1) an employer must temporarily close their business due to COVID-19 or (2) an individual is advised to isolate or quarantine themselves, then unemployment compensation payments made to affected employees will not be counted. However, in both circumstances, the employer must rehire the affected employee(s).

BENEFITS TO HEALTH CARE PROVIDERS

Health Care Workers Are in Critical Need Right Now, Do They Qualify for Paid Leave?

Health care providers may qualify for an exemption from the expanded leave requirements, including the mandatory paid leave, required by the Federal Law. It appears that health care employers may be able seek an exemption, but that it is not automatic. Further clarification may be provided when regulations implementing the Federal Law are promulgated.

What if a healthcare facility has lower revenues because people are isolating themselves?

The Vermont Bill empowers the Department of Human Services to “provide payments” to healthcare providers to cover lower revenues. These payments are meant to enable the provider to provide services during and after the Pandemic outbreak. It is unclear how much or in what manner these payments will be made. Again, this proposal has not been passed by the Vermont House.

Additionally, the Vermont Bill allows certain Medicaid providers to apply for advance payments upon proof of financial need and payments at the end of 2020 to the extent their Medicaid encounters in 2020 are less than 98% of their 2019 encounters. Again, it is unclear how these payments will be calculated or administered.

Will assessments to hospitals, nursing homes, and other covered providers be affected?

The Vermont Bill grants the Secretary of Human Services the authority to (a) modify or postpone hospital assessments and (b) waive, modify, or postpone assessments to intermediate care facilities for developmental disabilities, nursing homes, home health agencies, and pharmacies.

OTHER ECONOMIC BENEFITS AND SUPPORTS TO EMPLOYEES

The Federal Tax Payment Deadline has been extended to July 15, 2020 but Congress has not yet passed an extension to the Federal Tax Return Filing Deadline. Taxpayers who wish to extend payment should file a 6 month extension request by the April 15 deadline. The State of Vermont has not advised on any extension.

The Federal Law and Vermont Bill expand healthcare coverage to require insurers to cover the cost of COVID-19 testing. The Vermont Bill requires dental and health insurance plans to cover telemedicine.

The Vermont Legislature is working on other bills to protect housing renters and to restrict utility shutoffs to homes, as well as extend Vermont family leave laws to include COVID-19 related absences. Many Vermont utilities have already announced a suspension in shutoffs for non-payment.

OTHER SUPPORTS FOR EMPLOYERS

The Federal Law includes a payroll tax credit equal to 100% of the qualified sick leave wages paid by the employer as well as any FMLA paid leave benefits paid by the employer.

Small businesses may qualify for certain exemptions to the paid leave portions of the Federal Law, which will depend on particular circumstances and which may be further clarified by regulations and guidance which are yet to be issued.

The Vermont Agency of Commerce and Community Development is also asking Vermont businesses impacted by the response to the COVID-19 virus to share these impacts with the Agency through a dedicated email address: commerce.covid19@vermont.gov. This data gathering will help support the need for federal disaster aid. The Agency is looking for data on impacts in the following areas:

  1. Economic Injury
  2. Supply Chain
  3. Workforce (Including that caused by lack of childcare)
  4. Business Travel
  5. Visitor Travel and Tourism Activities
  6. Remote Work Capabilities

The Agency has also established a hotline so that businesses may call to report impacts and be directed to resources: (802) 461-5143. The hotline will be staffed Monday through Friday, 7:45 a.m. – 4:30 p.m.