Pay Obligations if Business Chooses or Must Close Operations
KFP understands that businesses are making very difficult decisions regarding whether to continue operating during this ongoing public health crisis.
If a business decides to shut down during the crisis, generally, the business would still be responsible to continue to pay benefits for anyone who was an employee on the date of closure.
Below is a further clarification of businesses responsibilities:
Would a business have to continue to provide FMLA benefits to an employee?Yes, but only for those who have already been quarantined (because they have the symptoms or self-quarantine)(at this stage, stay at home orders do not qualify) or those who have already taken leave to take care of children under 18 due to school closure or child care closure.
What are the businesses responsibilities if it is confirmed that an employee has coronavirus and had contact with the entire staff requiring the business to shut down because every employee must be quarantined? Assuming the business has fewer than 100 employees, the dealer must pay 80 hours of sick pay for full-time employees and the average number of hours worked by part-time employees over a 2-week period under the federal paid sick leave law.
Is the business required to pay out accrued sick, vacation and personal leave to employees?Yes, if the business closes and employees are laid off during the COVID-19 pandemic, the business would be obligated to pay the benefits described above. In addition, companies should pay accrued but unused sick pay. Companies may be obligated under a CBA or their own policies to pay out accrued but unused vacation, personal days.
Are businesses required to provide specific notices to employees if the dealer decides to cease operations during the State of Emergency?Yes. Companies must provide a COBRA notice and WARN Act Notices if the dealership is eliminating at least 25 employees AND 33% of its workforce. The COBRA Notice must be provided within 30 days of the closure and WARN Notices must be sent as soon as is practical following the closure. Sample WARN Notices can be found on NYS DOL website in the Coronavirus section.
A chart showing numerous scenarios and the variety of COVID-19 related state and federal leaves has been prepared by James E. McGrath, III, Esq. of Putney, Twombly, Hall and Hirson can be found here.
As always, we thank you for giving us the opportunity to work with you.
Sincerely,Your Accountantand the Team at KFP