Business of Well-being

The Impact of COVID-19 on Employment Law


The coronavirus pandemic shook up the corporate world for nearly all of the year. The global health restrictions during the pandemic led to an unprecedented downturn for businesses that will alter the way businesses are done going forward. In April 2020, for example, US unemployment rates hit unprecedented levels not seen since data collection began in 1948. Every state in the US also reported record unemployment rates, higher than the figures they had during the Great Recession. For those still employed, they either faced furloughs, pay cuts, or were burdened by the perceived job insecurity and health risks of going to work.

In response to these dire circumstances, employers remodeled their businesses to adjust to the pandemic-induced “new normal” while employees upped their expectations and demands for a safe and healthy workplace. More than nine months into the health crisis, many of these changes are gradually being drafted into law, as several states are revising their employment laws to reflect the needed changes to the workplace in the months and years to come.

Changes to Federal Regulations

The federal government implemented several changes to existing laws on employee health, unemployment insurance, taxes, and workplace benefits to minimize the impact of the health crisis on workers and their employers and prepare the workforce for future pandemics. The pandemic led lawmakers to reinforce and stiffen existing laws that empower employers to protect their workforce. For instance, laws regarding COVID-19 testing and vaccination in the workplace have been tightened to help employers protect their employers and secure their businesses.

On December 16, 2020, the US Equal Employment Opportunity Commission (EEOC) updated its guidance to reaffirm that employers can impose a vaccine mandate as a condition to return to work or as a prerequisite for employment. Likewise, the EEOC allows employers to mandate COVID-19 testing as a precondition to returning to work.

However, this rule remains limited by the Americans with Disabilities Act (ADA) that allows employers to accommodate employees who cannot comply with these mandates because of a disability or a sincerely held religious belief, as long as such accommodation does not jeopardize the viability of the business.

New federal laws were also issued to protect employees who may be unavailable to work if they develop symptoms of COVID-19 or have to be away for other reasons still related to COVID-19.

In March 2020, Congress passed the Federal Family First Coronavirus Response Act (FFCRA) to provide paid sick leave benefits for workers in private-owned businesses with less than 500 employees and government-owned companies with more than one employee, as part of the COVID-19 stimulus package.

The FFCRA allows eligible employees up to two weeks (or 80 hours) of paid sick leave at the employee’s regular pay rate if the employee is unable to work because he or she is quarantined or experiencing COVID-19 symptoms and seeking treatment. The Act also provides that covered workers receive up to two weeks (or 80 hours) of paid sick leave at two-thirds the employee’s regular pay rate because he or she is taking care of an individual subject to quarantine or a child whose child care provider or school is closed due to COVID-19-related reasons.

Further, FFCRA allows up to an additional 10 weeks of paid expanded family and medical leave at two-thirds the employee’s regular rate of pay for an eligible employee. In this case, the employee must have been employed in the business for at least 30 calendar days and is unable to work because they have to care for a child whose school is closed or child care provider is unavailable for COVID-19-related reasons.

The Act, which is administered and enforced by the US Department of Labor’s Wages and Hour Division (WHD), was issued as a temporary ruling due to sunset on December 31, 2020. Congress, however, did not extend the rule. This now leaves the decision to provide such paid leave benefits at the discretion of the employer.

Consequently, employers will not be required to provide the leave benefits from January 1, 2021, but will still enjoy the FFCRA tax credits on the paid leave benefits through March 31, 2021. However, the qualifying reasons for which covered employees may take leave, as well as the cap on the amounts paid, and the leave duration remain unchanged. Further, an employer cannot get federal reimbursements for leave taken by an employee in the first quarter of 2021 if the employee has exhausted their leave bank in 2020 or has taken leave from a previous employer.

Existing and Expanded State Employment Laws

Several states also issued regulations to protect employers from the spread of the coronavirus in the workplace and protect businesses from the harsh economic realities induced by the pandemic.

Following the issuance of the FFRCA, states like California and New York issued paid sick leave laws that required employers to provide eligible workers with paid leaves for reasons related to COVID-19. New York State issued a regulation that required business owners to provide at least five days of job-protected, paid sick leave to workers who need to be away from work because they are under mandatory quarantine order or isolation due to COVID-19 infection.

Colorado also issued a paid COVID-19 sick leave that will expire on December 31, 2020. The rule requires all private employers in the state to provide paid leave to employees for COVID-19-related absences. However, new sick leave requirements under the Healthy Families and Workplaces Act (HFWA) will take effect from January 1, 2021, requiring employers with at least 16 employees to offer paid sick leave to their employees. The HFWA will impose sick leave requirements on all Colorado employers beginning January 1, 2022. The state’s COVID-19 sick leave rules subsets on December 31, 2020, unless extended by additional legislation.

Effective this week, California issued AB-1867 that requires that employers with at least 500 employees nationwide provide up to 80 hours of COVID-19 supplemental paid sick leave (SPSL) to employees who commute to work.

Valid reasons to be eligible for SPSL include being in a federal, state, or local quarantine for COVID-19 or having health concerns related to COVID-19. The amount payable by the employer depends on the covered workers’ schedule.

The state also issued SB-1159, or the COVID-19 Workers’ Compensation Program, which will take effect immediately through January 1, 2023. The program creates a rebuttable presumption that any COVID-19-related illness an employee has is from their workplace, making an employee eligible for compensation benefits.

California’s lawmakers also enacted laws that require employers to take responsibility for their employees’ safety at work. On November 30, 2020, California’s Office of Administrative Law (OAL) approved the state’s Division of Occupational Safety and Health Administration’s proposed emergency regulations, which require employers to implement stringent restrictions to combat COVID-19 transmission in the workplace.

The Emergency Temporary Standards (ETS) apply to all California employers except those with only one employee, those whose employees work remotely, or whose employees are covered by the Aerosol Transmissible Diseases Regulation. The regulation requires all covered employers to implement a COVID-19 prevention program that includes strategies to identify, monitor, and eliminate COVID-19 workplace hazards, as well as preventive measures, such as the use of face masks, contact tracing, and social distancing.

The Bottom Line

As the coronavirus pandemic has disrupted the corporate landscape, it is also slowly changing the laws that define the business world. In the months and years to come, employees and business owners would readapt to new, stricter regulations to safeguard workplace safety and protect them from the economic implications of the pandemic.

Learn about how you can become a Certified Corporate Wellness Specialist→