The Connecticut Commission on Human Rights and Opportunities (“CHRO”) recently extended the deadline for employers to provide sexual harassment training for their employees, from October 1, 2020, to January 1, 2021, due to the COVID-19 pandemic. The CHRO announcement is available here.

The CHRO website states that this is a blanket extension, and employers do not need to make a request to obtain the extension. Previously, the CHRO announced a 90-day extension for employers, under limited circumstances, which required employers to make a written request to the CHRO seeking an extension and to provide the reasons why an extension was necessary.

The “Act Combatting Sexual Assault and Sexual Harassment” (“Act”), which took effect on October 1, 2019, and which we reported about in detail here, significantly expanded the obligations of employers to provide training and education regarding sexual harassment and available remedies. Pursuant to the Act, employers of three or more employees are now required to provide two hours of such training to all employees. Employers with less than three employees must provide two hours of sexual harassment prevention training to supervisors only. Previously, only employers with 50 or more employees were required to provide supervisors with two hours of training on state and federal sexual harassment laws.

Outside of the United States, terminating employees can be difficult even in “normal” times.  The concept of “at-will” employment is uniquely American, and generally, employers in non-US jurisdictions only may terminate employment for “cause” or for other statutorily permitted reasons.  Moreover, terminated employees in many countries are entitled to statutory notice, severance and other benefits, which is far more the exception than the rule for US employees.

Because of the COVID-19 pandemic, many countries have increased employee job protections even further, making terminations – even for serious underperformers – ever more difficult, if not impossible.  Argentina and Luxembourg illustrate the challenges that international employers may face in dismissing non-US employees during the current crisis.

Argentina 

Since March 31, 2020, employers in Argentina have been prohibited from dismissing employees without cause.  Although the restriction is set to be lifted on September 26, 2020, the expectation is that the ban will be extended.  To deal with this constraint, employers may choose to follow the country’s two-step approval process for termination upon mutual agreement of the parties.  Under the procedure, employers approach an employee with a termination proposal, which the employee may accept, thereby consenting to the termination of employment.  Then, if accepted, execution of a preliminary termination agreement must be witnessed at the Labor Ministry, employment courts or in the presence of a notary who will issue a notary deed that confirms the termination.  Most mutual agreements are being executed by way of notary deeds because the pandemic has closed the courts and hearings before the Labor Ministry are being scheduled months in advance.  After the parties agree upon the economic terms, a formal termination document must be executed before a notary.  This last step usually can be done immediately, as the parties need only coordinate a day and time to execute the agreement before the notary.

In considering termination upon mutual consent, Argentina employers need to take the country’s mandated severance into account, which applies to employees who have completed a three-month “trial period.”  Emergency Decree 34/2019, enacted on December 13, 2019, doubled the amount of required severance that must be paid to terminating employees.  The decree, which has been extended once, currently is set to expire on December 7, 2020.  Thus, to accomplish a termination upon mutual consent, it is likely that employees will insist upon severance in excess of the double amount currently in effect.

Of note, the double severance requirement, does not apply to employees hired after the enactment of Emergency Decree 34/2019 (i.e., after December 13, 2019).  Employees hired after December 13, 2019 but before July 29, 2020, are protected by the without cause dismissal prohibition. Employees hired after July 29, 2020 may be dismissed without cause and without severance, as long as they are in their trial period (i.e., first three months of employment) and provided that they have been provided with 15 days’ notice.

Luxembourg

Since before the COVID-19 pandemic, Luxembourg employees absent from work because of incapacity, have been protected from dismissal for up to 26-weeks.  During this “sickness period,” employers are prohibited from classifying the absence as “unjustified” and from deducting the absences from employees’ annual holiday allowance, provided the employee has followed required notification and documentation procedures.

The COVID-19 pandemic has expanded this protection.  Now, employers are prohibited from counting sick time between March 18, 2020 and June 24, 2020 as part of the 26-week protected period.  In addition, the law protects Luxembourg employees from dismissal beyond the 26th week until their sickness is over.

In sum, multinational employers must be aware of newly enacted regulations and guidance that may restrict their ability to terminate employees during the COVID-19 pandemic and that increase termination benefits owed to employees.  Although employers should always carefully consider any termination prior to taking dismissal action, they should be particularly vigilant and should consult with legal counsel prior to dismissing employees during the ongoing COVID-19 crisis.

Epstein Becker & Green continues to monitor workforce management issues in the US and abroad.

 

 

On September 17, 2020, California Governor Gavin Newsom signed Senate Bill 1383 (“SB 1383“), expanding job-protected family leave for employees of companies with five or more employees. Previously, only employees of companies with 20 or more employees were entitled to these protections. According to the Governor’s office, this law, which becomes effective January 1, 2021, will expand job-protected family leave to nearly six million additional Californians.

Existing Law

The California Family Rights Act (“CFRA”) currently makes it any an unlawful employment practice for a government employer or any employer with 50 or more employees to refuse to grant a request by an employee, who has at least 1,250 hours of service with the employer during the previous 12-month period, to take up to 12 workweeks of unpaid protected leave during any 12-month period to bond with a new child of the employee or to care for themselves, a child, a parent, or a spouse. Qualifying employers must also provide reinstatement to the same or a comparable position upon the employee’s exhaustion of covered leave.

The CFRA authorizes an employer to refuse to grant a leave request if the employer employs fewer than 50 employees within 75 miles of the worksite where the employee is employed or if the employee is a salaried employee who is among the highest-paid 10% of the employer’s employees.

The New Parent Leave Act (“NPLA”) makes it an unlawful employment practice for any employer to refuse to grant a request by an employee to take up to 12 workweeks of unpaid protected leave during any 12-month period to bond with a new child. The NPLA defines “employee” as a parent who has more than 12 months of service with the employer, who has at least 1,250 hours of service with the employer during the previous 12-month period, and who works at a worksite in which the employer employs at least 20 employees within 75 miles.

Under both the CFRA and NPLA, if both parents of a child are employed by the same employer, the employer is only required to grant both employees a combined total of 12 workweeks of unpaid protected leave during the 12-month period.

Expansions Under The New Law

SB 1383 expands the CRFA and NPLA to make it an unlawful employment practice for any employer with five or more employees to refuse to grant a request by an employee to take up to 12 workweeks of unpaid protected leave during any 12-month period to bond with a new child of the employee or to care for themselves or a child, parent, grandparent, grandchild, sibling, spouse, or domestic partner. Qualifying employers must also provide a guarantee of employment in the same or a comparable position upon the termination of the leave.

The law eliminates the 75-mile radius for purposes of counting employees but keeps the requirement that to be eligible for leave the employee must have at least 1,250 hours of service with the employer during the previous 12-month period.

In addition, the law requires an employer who employs both parents of a child to grant leave to each employee.

The law also makes it an unlawful employment practice for a covered employer to refuse to grant a request by an employee to take up to 12 workweeks of unpaid protected leave during any 12-month period due to a qualifying exigency related to covered active duty or call to covered active duty of an employee’s spouse, domestic partner, child, or parent in the Armed Forces of the United States.

Small employers should review their policies and leave procedures, or if necessary, prepare a new policy, to ensure they will be ready when the law becomes effective in the New Year.

On September 9, 2020, California Governor Gavin Newsom signed Assembly Bill 1867 (“AB 1867”), mandating supplemental paid sick leave for employees of companies with 500 or more employees. AB 1867 fills gaps left open by the federal Families First Coronavirus Response Act (“FFCRA”) (previously discussed here) and the Executive Order signed by Newson on April 22, 2020, which only applied to essential food workers (previously discussed here).

The sick leave portions of the law are effective immediately and covered employers must make the leave available no later than September 19, 2020.

Who Does The Law Apply To?

The law covers all employees of private entities that have 500 or more employees in the United States. Employees are counted the same way as in the FFCRA, 29 C.F.R. § 826.40.

AB 1867 also covers employees of public entities that employ health care providers or emergency responders and that have elected to exclude such employees from emergency paid sick leave under the FFCRA.

The covered employee must leave their home or other place of residence to perform work for the employer.

What Benefits Must Be Provided?

The worker is entitled to supplemental paid sick leave at an hourly rate equal to the highest of:

  • the worker’s regular rate of pay for the last pay period;
  • the state minimum wage; or
  • the local minimum wage

An employer does not have to pay supplemental paid sick leave of more than $511 per day and $5,110 in aggregate total–matching the maximum benefits under federal law.

AB 1867 prohibits an employer from requiring an employee to use other paid or unpaid leave, paid time off, or vacation time in lieu of, or before, the employee uses COVID-19 supplemental paid sick leave.

How Much Leave Must Be Provided?

  • Full-time employees or employees scheduled to work an average of at least 40 hours per week in the two weeks before the leave is taken are entitled to 80 hours of supplemental paid sick leave under this new law.
  • Part-time employees with normal a weekly schedule are entitled to supplemental paid sick leave equal to the total number of hours the employee is normally scheduled to work for the employer over two weeks.
  • Part-time employees who have variable hours may take fourteen times the average number of hours the employees worked each day in the six months preceding the date of the supplemental paid sick leave. For part-time employees that have worked for the employer for fewer than six months but more than fourteen days, the number of hours is calculated over the entire period that the worker has worked for the employer.
  • If the part-time employee works variable hours and has worked for the employer over a period of 14 days or fewer, the employee is entitled to sick leave in an amount equal to the total number of hours worked.

If an employer already provided supplemental paid leave dating back to March 4, 2020, for the reasons listed in the law, but did not pay the worker at least the amount provided for in the law, the employer may retroactively provide supplemental pay to the employee. If an employer does this, the prior sick leave will count towards the total number of hours of supplemental paid sick leave to which the employee is entitled.

If an employer already provided an employee with a supplemental benefit, such as supplemental paid leave, for the reasons and in an amount outlined in the law, those hours count towards the total number of hours of supplemental paid sick leave to which the employee is entitled.

When Benefits Be Provided

Immediately upon oral or written request, a covered employer must provide an employee supplemental paid sick leave if the worker cannot work, because:

  • the worker is subject to a federal, state, or local quarantine or isolation order related to COVID-19;
  • the worker is advised by a health care provider to self-quarantine or self-isolate due to concerns related to COVID-19; or
  • the worker is prohibited from working by the worker’s employer due to health concerns related to the potential transmission of COVID-19.

The requirement to provide COVID-19 supplemental paid sick expires on December 31, 2020, or upon the expiration of federal sick leave provided for in the FFCRA, whichever is later. A worker taking supplemental paid sick leave when the law expires can take the full amount of COVID-19 supplemental paid sick leave to which the worker is entitled.

Updated Wage Statements

Employers will need to update their wage statements to reflect the amount of paid sick leave – including supplemental paid sick leave, available to an employee. The wage statement requirement is not enforceable until the next full pay period following September 9, 2020.

Food Sector Employees

The law also essentially codifies the Executive Order N-51-20, by requiring hiring entities to provide food sector workers supplemental sick leave if they are unable to work due to COVID-19. It also requires any operation that stores, prepares, packages, serves, vends, or otherwise provides food for human consumption at the retail level to permit workers to wash their hands every 30 minutes and additionally as needed. Our write up on Executive Order N-51-20 is here.

Notice Requirements

Hiring entities must display a poster in a conspicuous place that contains information about supplemental paid sick leave under the law. If an employer’s workers do not frequent a workplace, the employer may satisfy the notice requirement by disseminating notice by electronic means. The Labor Commissioner will provide additional guidance on notice requirements.

As we approach the last quarter of 2020 and the business community begins to plan ahead for 2021, New York employers should be aware of the changes coming to the New York Paid Family Leave (“NYPFL”) program. On January 1, 2021, the amount of employee contributions, the number of weeks of leave and benefits, and the amount of weekly benefits granted under the program are scheduled to increase. This will be the last of three annual increases in weekly benefits.

The NYPFL program, which took effect in 2018, provides partially-paid, job-protected leave for bonding with a new baby, caring for a seriously ill family member, and matters related to a family member who is deployed abroad on active military duty. The length of permissible leave began at eight weeks, is currently at 10 weeks, and will increase to 12 weeks of leave beginning on and after January 1, 2021.

The maximum amount of benefits an employee is entitled to receive while on leave is based on the employee’s average weekly wage (“AWW”) and the State’s average weekly wage (“SAWW”). Effective January 1, 2021, the maximum amount of benefits will be calculated based on 67% of an employee’s AWW, up to a cap set at 67% of the SAWW, The SAWW for 2021 is $1,450.17. The maximum weekly benefit in 2021 will be $971.61 per week.

To ensure sufficient funds to cover the increased benefits, the employee payroll contribution toward NYPFL also will be adjusted on January 1, 2021 to 0.511% of an employee’s gross wages each pay period, capped at a maximum annual contribution of $385.34.

The following chart sets forth the current status of, and coming changes to, the NYPFL program.

Date

Length of Paid Leave

Within a 52-Week

Period

Calculation of Benefit Payments State Average Weekly Wage Maximum Weekly Benefit Payments
January 1, 2020 Up to 10 weeks 60% of AWW, not to exceed 60% of the SAWW $1,401.17 $840.70
January 1, 2021 Up to 12 weeks 67% of AWW, not to exceed 67% of the SAWW $1450.17 $971.61

Employers should review their policies and leave procedures to ensure employees are being offered the appropriate leaves of absence. Further, employers should review their payroll practices to reflect the new employee contributions.

 

 

Part 6 of a series featuring our video Rules of the Road: Return to Work in the Time of COVID-19.

Simple in theory. Challenging in practice.

While we all intuitively know that we should stay home when we are feeling unwell, a fall 2019 survey suggests just the opposite—that approximately 90% of workers generally “push through” and come to work anyway. The reality is that employees come to work when they are sick for a myriad of reasons: to stay atop long to-do lists, meet production goals, because they think the business would crumble without them, or that somehow taking a sick day and staying home might be a sign of weakness. Given the current environment, there is also the very real financial reality and concern of missing a day’s worth of pay, particularly for those in economically vulnerable positions.

Taken together, this pandemic and the resultant new normal requires us all to recognize and encourage the duty to stay home when sick—now more than ever—while balancing human nature and the economic realities of the moment.

To be sure, the most effective way to contain a disease is to prevent it from spreading to others. Rule #6 is based on this straightforward principle, but its execution is proving to be a challenge. Moreover, the risk profile of this challenge will soon be magnified as we enter an unprecedented and likely daunting period when COVID-19 meets flu season.

How Do You Get the Workforce Back In? Keep Sick Colleagues Out.

Short of an effective vaccine being developed and distributed en masse, THE major hurdle in returning to the workplace and getting back to business is fear: generalized employee concern, if not anxiety, that their presence in the physical workplace itself will unduly expose them to contracting COVID. Leaving accommodation issues to the side for a moment (to be addressed in a later blog post), that concern is reasonable if employees fear that sick coworkers will not adhere to health and safety plans and protocols, health screenings, and basic common sense of staying home when feeling unwell.

Getting the workforce back requires building trust and confidence from the employee population in not just health and safety protocols, but also enforcement of those policies and protocols, coupled with training and education to encourage and keep sick employees out of the workplace.

Encourage Responsible Behaviors through Sick Leave Policy, Education, and Culture

Employees are more likely to stay home when they are under the weather if they feel comfortable doing so. This means employers need to make sure employees are not pressured to come into work. Although shifts to company culture do not happen overnight, employers can affect the workplace environment by educating the workforce about non-punitive leave policies, by instructing supervisors to encourage sick workers to stay home, and cross-training employees so that any one individual’s absence does not materially impact production.

An employer’s policies, informed by evolving law, can reduce the pressure on employees to work when ill. For example, employers can implement a non-punitive sick leave policy and, importantly, actually encourage employees to use it. The sick leave policy may not need to provide paid leave (although employers should be aware of federal, state and local paid time off laws, related to COVID-19 and otherwise, that might apply), but it should be flexible, clearly written, and consistent with public health guidance. A flexible sick leave policy is one that allows employees to stay home to care for a sick family member or tend to children whose schools or childcare is closed. It may also mitigate the economic impact of the decision to stay at home, thereby encouraging usage. Importantly, the sick leave policy should not require employees to offer unnecessary details or personal health information to their supervisors. Additionally, because doctors and health care professionals are busier than ever, employers should consider waiving requirements for workers to provide a doctor’s note to validate their illness, qualify for sick leave, or return to work, if possible.

Educate Your Employees about COVID-19

Navigating this pandemic and returning to work from it requires a team effort. Employees need to be on the alert for signs that they or a close contact may have COVID-19. COVID-19 safety training is now required in several states (including NY and CA) before permitting reentry to the workplace, and as part of that training, employers should ensure their workers know how to recognize COVID-19 symptoms so that they can self-isolate as needed, as well as understand the health and safety plans in place to build trust and confidence in their ability to return to work safely. Additionally, employees should know that COVID-19 and the common flu have similar symptoms and spread in similar ways.

Daily Employee Health Screening

Given the ongoing threat COVID-19 poses to workforces, employers need to be proactive and identify who should stay home. As we discussed in Rule 5: Yes, My Employer Can Do That, employers are permitted to screen employees in accordance with federal and local health guidelines and bar entry to those who show signs of COVID-19. Since daily testing may not be practical or possible, employers should follow CDC recommendations and conduct daily in-person or virtual health checks of employees who are working on-site and physically interacting with coworkers or others before they enter the workplace.

Symptom and temperature screenings can be conducted by employees at home or upon their arrival to the workplace. While there are numerous apps that assist at-home screenings, employers can also provide a simple questionnaire that employees must e-mail to their supervisors before their arrival. Of course, employers should rely on the CDC, other public health authorities, and reputable medical sources for guidance on emerging symptoms associated with the virus when creating their own COVID-19 screening questionnaires.

Employers who opt to implement in-person health screenings should establish protocols to make sure the tests are conducted safety and respectfully. Specifically, the CDC recommends screeners wear personal protective equipment (“PPE”), practice social distancing, and conduct the survey from behind a barrier to minimize the risk of infection. The health screening should also take place in a location and manner that follows social distancing guidelines. Setting up screening stations at multiple entrances or in large areas can help to reduce congestion and keeping the employee health screenings as private as possible may avoid stigma and encourage participation.

Handling Sick or Uncooperative Workers

Knowing whether a worker may be sick is useful, but health screenings serve little purpose if the individual is permitted to enter or remain at the workplace. Fortunately, the EEOC has clarified that employers may take steps to protect workers consistent with CDC guidance, including requiring workers to stay home “when necessary to address the direct threat of spreading COVID-19 to others.” Employees who have symptoms when they arrive at work or become sick during the day should immediately be separated from other workers, customers, and visitors and sent home.

Additionally, employers should bar entry to employees who refuse to have their temperature taken or participate in the employer’s health screening protocols. However, employers should inquire as to the reasons for the refusal, and if a reasonable accommodation is requested, engage in the same interactive process they would for any other request for accommodation under the ADA, Rehabilitation Act, or Title VII (if the request is made based on the individual’s religion).

Finally, communicating expectations to the broader employee population will build trust and confidence that the employer has and will do everything in its power to create a safe and healthy physical workplace as employer reopen for business.

Conclusion

Among other key takeaways, the ongoing COVID-19 pandemic has demonstrated how much our individual choices can affect those around us.

Going to work when sick is not heroic and should not be applauded. Quite the opposite.

Daily health screenings for on-site workers and sending home those who show symptoms or refuse to adhere to workplace safety protocols can help protect a workforce from infection, but creating a workplace culture where employees feel comfortable staying home when they are sick will help protect your workforce now, and even long after this pandemic is over.

Updates to USCIS Policy on New Forms, Premium Processing, and Filing Fee Increases Take Effect on October 2, 2020

As previously reported in Epstein Becker Green’s August 2020 Immigration Alert, U.S. Citizenship and Immigration Services (“USCIS”) announced that it will increase filing fees effective October 2, 2020.  In line with the announcement, USCIS has updated its Policy Manual and the Federal Register with the following changes:

  • USCIS will revise the edition date of certain forms. As a result, any affected form filed on or after October 2, 2020, that does not possess the 10/02/2020 edition date will not be accepted.  The forms affected by this change include H-1B, H-1B1, H-2A, H-2B, L, O, E, TN, H-3, P, Q, and R petitions (Form I-129); a Request for Action on Approved Form (Form I-600/600A); the Application for Employment Authorization (Form I-765); and the Request for Fee Waiver (Form I-912).
  • Premium processing adjudications will move from 15 calendar days to 15 business days, excluding weekends and holidays.
  • If USCIS is not able to complete premium processing within 15 business days, the agency will refund premium processing fees and may thereafter adjudicate the case under normal processing times.
  • Premium processing fees may be subject to increases based on inflationary rates under the Consumer Price Index.
  • I-485 application fees for minors under 14 years of age will increase to the I-485 application fee for adults.
  • USCIS may require that permanent resident cards (i.e., green cards), EAD work authorization cards, advance parole or reentry permit travel permission documents, or certificates of naturalization (i.e., U.S. citizenship certificates) not be delivered by the post office unless they are delivered with a signature confirmation.

Homeland Security Further Extends Special Flexibility for Verifying Forms I-9

Back on March 20, 2020, Epstein Becker Green posted a Special Immigration Alert indicating that, due to the COVID-19 pandemic, the Department of Homeland Security (“DHS”) is allowing special flexibility to verify Form I-9 documents without requiring viewing the actual original documents. To benefit from this remote Form I-9 verification process, an employer had to adhere to specific requirements, which are set forth here. Although originally meant to be in place for 60 calendar days, this special flexibility has been extended several times by DHS.

DHS has once more extended this special flexibility up to November 19, 2020.  Unless extended again, all employers must revert back to the pre-COVID-19 requirement to complete I-9 verification of new hires after that date lapses.  We will advise if this special flexibility is again extended.

USCIS Settles Class Action Lawsuit Due to Delayed EAD Work Permit Issuance

On July 22, 2020, a class action lawsuit (Subramanya v. USCIS) was filed with the U.S. District Court for the Southern District of Ohio compelling USCIS to issue EAD cards that were approved but not yet sent to the foreign nationals.  Approximately 75,000 applicants joined the class because USCIS approved their applications, but did not send the actual EAD work permit cards months after approving their applications.  On August 21, 2020, the court entered a Consent Order and Final Statement requiring USCIS to produce the EAD cards immediately.

Since producing and sending out 75,000 EAD cards immediately would be an operational impossibility, the plaintiffs in the class action agreed to work with USCIS to settle on how USCIS could comply with the Consent Order. As a result, the settlement provides the following:

Sub-class 1: There were over 27,000 applicants in this group to whom USCIS sent an EAD approval notice and the production of the EAD card has been ordered but not completed.  All EAD cards for this group were required to be produced and mailed by August 28, 2020.

Sub-class 2: There were over 17,000 applicants in this group to whom USCIS sent an EAD approval notice, but not their EAD cards was not ordered by USCIS. USCIS explained that these EAD cards were not ordered because the applicants’ biometrics have not been completed. The EAD cards for this sub-class will be produced and mailed within seven business days of capturing their biometrics.

As for the other approximately 30,000 applicants involved in the class action, USCIS issued and mailed out their EAD cards between the date the complaint was filed (July 22, 2020) and the date the class list was prepared (August 20, 2020).

USCIS Allows EAD Approval Notices as Temporary Forms of Work Authorization in Lieu of the Actual EAD Card

USCIS reported that because of the COVID-19 pandemic, the production of EAD cards is delayed.  Accordingly, USCIS updated its policy to allow the use of a Form I-797 Notice of Action (“Approval Notice”) approved between December 1, 2019, and August 20, 2020, as interim proof of work authorization for EAD applications (Forms I-765). This interim policy is valid until December 1, 2020.

As a result, employees in receipt of an Approval Notice during the qualifying period stated above may present to their employer the Approval Notice as a Form I-9, Employment Eligibility Verification, document to establish employment authorization, even though Form I-797 specifically states that it is not evidence of employment authorization.  The Approval Notice may be presented to an employer as a List C document for Form I-9 purposes until December 1, 2020.  The Approval Notice, however, may not be used as a List B document to establish identity.

Employers that accept an Approval Notice to complete a Form I-9 are advised to re-verify the employees’ work authorization on or before December 1, 2020.

USCIS Provides Memorandum Updating DACA After Supreme Court Decision

On August 21, 2020, the USCIS issued a memorandum following last month’s U.S. Supreme Court decision upholding the Deferred Action for Childhood Arrivals (“DACA”) program.  In summary, USCIS will reject new or first-time DACA requests from applicants. USCIS will accept DACA requests only from applicants who were previously granted DACA status.  USCIS will also accept requests for advance parole travel permits for DACA applicants that are properly submitted.

For approvable DACA renewal requests, USCIS will limit EAD work authorization cards to a period of no more than one year.  USCIS will also reject any DACA renewal requests received more than 150 days before the current DACA granted period expires. Therefore, DACA applicants should plan to submit DACA renewal requests between 120 and 150 days before their current DACA expiration date.

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If you have any questions or wish further guidance on these or any other immigration issues, please contact one of the authors or your Epstein Becker Green attorney.

On August 13, 2020, 11 years after the enactment of the Fair Work Act 2009 (Cth) (the “FW Act”), Australian employers received guidance from the High Court regarding how to count the entitlement to “10 days” of personal leave per year of employment, as required under Section 96 of the FW Act.

The High Court determined that employees’ leave entitlement is equivalent to the average of employees’ “ordinary hours” of work over the course of a two-week period (i.e., 1/26th of the ordinary hours of work in a year) and not 10 “working days” of paid leave per year. This decision likely will have far-reaching implications for all Australian employers, particularly those with a workforce that works outside the parameters of the ordinary 9-to-5 workday, five days per week.

Until this decision, uncertainty about how to count employees’ “ordinary hours” of work led to inconsistent practices when calculating the leave entitlement, particularly across different industries where employees work flexible schedules.

Statutory Context

Section 96 of the FW Act provides the amount of leave to which employees are entitled. Specifically, Section 96 provides that “[f]or each year of service with his or her employer, an employee is entitled to 10 days of paid personal/carer’s leave.” The leave entitlement “accrues progressively during a year of service according to the employee’s ordinary hours of work, and accumulates from year to year.” This leave is intended to protect employees against loss of earnings by reference to ordinary hours of work when they are incapacitated by illness, injury, or need to provide care to family.

Factual Background & Procedural History

Two Mondelez Australia Pty Ltd. (“Mondelez”) employees worked 36 hours per week. These employees worked 12-hour shifts, three days per week. Mondelez provided these employees with 96 hours of personal leave per year of service, equivalent to eight 12-hour days of personal leave.

In August 2019, the Full Federal Court determined that these employees were entitled to 120 hours of personal leave per year (i.e., 12-hour working days multiplied by 10 days per year). Under this approach to calculating the personal leave entitlement, full-time employees working 7.6-hour shifts five days per week would have received less personal leave (76 hours of personal leave (i.e., 7.6-hour working days multiplied by 10 days per year) than employees who worked longer shifts across three days.

The Full Federal Court’s decision followed a “working day” interpretation (i.e., accounting for the hours worked in each individual day) rather than a “notional day” interpretation (i.e., the average daily ordinary hours based upon a five-day workweek) of the FW Act. Following the Full Federal Court decision, the High Court granted the parties leave to appeal the decision.

High Court of Australia’s Decision

The High Court overturned the Full Federal Court’s decision and rejected the 10 “working day” construction of the FW Act. For the purposes of calculating “10 days” of leave entitlement, the High Court provided that a “day” or “10 days” must be calculated by reference to employees’ ordinary hours of work in two standard five-day workweeks. One “day” refers to a “notional day,” consisting of 1/10th of the equivalent of employees’ ordinary hours of work in a two-week period. Because work patterns do not always follow two-week cycles, the entitlement to “10 days” of paid personal/carer’s leave can be calculated as 1/26th of employees’ ordinary hours of work in a year.

The High Court stated that the “working day” interpretation of the FW Act was inconsistent with the FW Act’s objectives and language. The High Court emphasized that the purpose of the FW Act is to provide “fairness, flexibility, certainty, and stability” for both employers and employees. The principle of fairness also applies between employees. The High Court stated that the “notional day” interpretation meets the FW Act’s objective of protecting employees against loss of wages by guaranteeing that employees’ accrued leave entitlement does not vary based upon the pattern of hours of work. Therefore, employees who work 36 hours per week are entitled to 72 hours of personal leave, regardless of how many days the employees actually worked that week. In addition, the “notional day” interpretation helps to ensure that part-time employees do not accrue more personal leave than those working full-time.

Looking Ahead: Implications for Employers

The High Court’s decision clarifies how employers, particularly those with a workforce consisting of part-time employees and shift workers, may comply with the FW Act. Employers should review and update payroll systems as necessary, especially if current payroll systems are based upon the previous Full Federal Court interpretation of a “day.” In addition, employers should review their current accrual levels to ensure that they are correct. If accrual levels are incorrect, this could lead to employees’ having accrued less or more personal/carer’s leave than they are entitled to and/or receiving the wrong amount of pay when on personal/carer’s leave.

Although the High Court did not address annual leave in detail, it is likely that the FW Act’s annual leave provisions (provided for in Section 87) that entitle employees to “4 weeks” of annual leave should be calculated similarly, based on employees’ “ordinary hours” of work.

The High Court’s decision, however, will not affect employees covered by enterprise agreements or contracts of employment that provide for a different leave entitlement under the FW Act, depending on the language of such contracts.

As we have previously highlighted, many countries have introduced creative new approaches to address the economic realities of the COVID-19 pandemic.  As employees continue to work from home and employers reconsider whether employees must return to the workplace at all, some jurisdictions are implementing measures to accommodate the needs and interests of both employers and employees in the ever-changing and evolving employment environment.  Luxembourg is yet another example of a country that has sought to develop solutions with its neighboring nations to ease the economic burden of the COVID-19 pandemic on workers.

Cross-Border Tax Implications

At the beginning of the COVID-19 pandemic, the Luxembourg authorities worked with their counterparts in Belgium, France and Germany to develop measures to minimize the tax impact of the COVID-19 pandemic.  The four European governments recognized that telework would be required to accommodate many cross-border workers and determined that applicable tax convention requirements would need to be relaxed in the COVID-19 world.  These earlier tax conventions provided that cross-border workers may telework from their home country for up to a certain number of days (e.g., 19 days for German workers, 24 days for Belgian workers and 29 days for French workers who work remotely in their home country for the benefit of their Luxembourg employers) without the related remuneration being taxed in their home country.

The Luxembourg government agreed with its three neighbors that, because the COVID-19 pandemic is a case of force majeure, days that workers work remotely are not taken into account for the purposes of taxing remuneration in their home country.  Put differently, these new agreements avoid double taxation and prevent fiscal evasion with respect to taxes on income and capital.  Currently, the Luxembourg government’s agreements with the governments of Belgium, France and Germany either remain in force indefinitely or continue to be extended.

Cross-Border Social Security Implications

In addition to double taxation concerns, working from home in a neighboring country can affect workers’ social security standing.  To protect against this risk, Luxembourg entered into amicable agreements with Belgium, France and Germany regarding social security affiliation for cross-border workers who are teleworking.  Under the relevant agreements, days that workers telework due to the COVID-19 crisis are not taken into account when determining the social security legislation applicable to cross-border workers in these countries.  As such, teleworking will not influence workers’ social security standing in these four jurisdictions.  Luxembourg’s social security affiliation agreements with Belgium, Germany and France are in effect until December 31, 2020.

Epstein Becker & Green continues to monitor workforce management issues in the US and abroad.