A complex paid sick and family and medical leave law enacted in response to the coronavirus pandemic will likely lead to increased litigation against employers, say experts.
The federal Families First Coronavirus Response Act, which took effect April 1 and is set to expire on Dec. 31, requires employers to give employees paid emergency family and medical leave and emergency paid sick leave. It covers private employers with fewer than 500 employees and certain public employers (see box). Employers are given a payroll tax credit for paid leave provided under the act.
The new law has already led to litigation (see related story) and more is expected, say many experts, who recommend employers establish a clear policy on dealing with the law and communicating the policy to workers.
Employment practices liability insurance will likely respond to related claims, if claims include allegations of discrimination or retaliation, experts say.
The basic concept behind the law “sounds really nice and really easy,” but requires paying attention to difficult technical issues “and it’s easy to miss one,” said Jason E. Reisman, a partner with Blank Rome LLP in Philadelphia, who is co-chairman of the law firm’s labor and employment practice group.
Many experts say problems may arise due to the relative haste with which the legislation was introduced and enacted, which was at a time when workplaces were in turmoil.
“The challenging thing about the FFCRA leave law” is it was “announced and enacted within days” rather than the typical legislative process, where employers have at least a year to prepare how to manage a new law, said Lisa Malloy, Atlanta-based senior associate consultant at EPIC National Employer Consulting, a division of EPIC Insurance Brokers and Consultants.
“There’s a lot of moving parts,” said George Katsoudas, senior vice president, compliance counsel, with Arthur J. Gallagher & Co.’s benefits and HR consulting division in Rolling Meadows, Illinois.
In addition, the law applies to employers with fewer than 500 workers, and firms of that size may not have the internal legal and human resources personnel to deal with its nuances, said Tom Hams, Chicago-based managing director and national employment practices liability insurance practice leader at Aon PLC.
The law prohibits retaliation for those who take advantage of the law, said Kelly Thoerig, Richmond, Virginia-based U.S. employment practices liability product leader for Marsh LLC. Retaliation claims are easy for employees to bring, but “are hugely problematic for employers,”
she said.
Many believe the law will lead to more litigation. “Absolutely, we can expect to see a spike in litigation,” said Jeff Nowak, a shareholder with Littler Mendelson P.C. in Chicago, who represents employers in employment law matters.
“These are times unlike anything we’ve ever seen, and millions of people have lost their jobs, so a decent number of them will resort to litigation,” he said.
“I think we will see in the coming months a raft of litigation arising from alleged noncompliance with the FFCRA,” said James F. Hermon, a member of Dykema Gossett PLLC in Detroit, who focuses on the defense and trial of employment cases.
These types of leaves are “very amorphous and tough to administer,” and could cause problems in creating the right to take them when employers may need their workers to be on the job, said Paul E. Starkman, a member of law firm Clark Hill PLC in Chicago, who represents employers.
Class-action lawsuits alleging breaches of the law are likely to be more attractive than individual lawsuits to plaintiff attorneys because of the money awards they can generate, said T. Christopher Bailey, an officer with Greensfelder Hemker & Gale P.C. in St. Louis, who represents employers.
Coverage under employment practices liability insurance may be available, say observers.
“To trigger the EPL policy, you have to have a claim that’s alleging an employment practice wrongful act,” such as discrimination or wrongful termination, said Talene Carter, New York-based national employment practices liability product leader for FINEX North America at Willis Towers Watson PLC.
A “lot of policies don’t provide coverage just for violation of the FMLA or other leave laws,” if it is a straight claim, she said.
Employers should make sure leave requests come to “a single point of contact” to “decrease the opportunity of giving wrong answers,” Ms. Malloy said.
“Employees talking to someone within the company who doesn’t know all the rules” is probably the biggest potential liability under the law, she said.
