Workforce and Unemployment Information
On March 20, 2020, Governor Ducey issued Executive Order 2020-11 which makes several changes to the unemployment program in Arizona. These changes were pushed for by the Arizona Restaurant Association to help support the industry’s employees.
The changes made by the the Governor’s order includes:
- Allows employees that have seen their hours reduced or eliminated to qualify for unemployment benefits.
- Allows employees who are unable to work due to a quarantine and are out of paid leave to qualify for unemployment benefits.
- Allows employees who leave employment due to a risk of exposure or infection, or to care for a family member to qualify for unemployment benefits.
- Waives the one-week waiting period for receiving unemployment benefits.
- Waives the job search requirement for unemployment benefits.
- Prohibits the Department of Economic Security from using unemployment benefits grant due to COVID-19 to calculate the employer contribution rate.
- Applies the order retroactive to March 11, 2020.
The Arizona Department of Economic Security (AZDES) has set up a resource page for bushiness and employees impacted by COVID-19 which can be found by visiting
Families First Coronavirus Response Act (AKA Phase-II)
On March 18, 2020 President Trump signed the Families First Coronavirus Act (FFCRA), also know as the phase-II bill. The act aims to provide paid sick leave and expanded family and medical leave for COVID-19 related reasons and creates the refundable paid sick leave credit and the paid child-care leave credit for eligible employers. Eligible employers are businesses and tax-exempt organizations with fewer than 500 employees that are required to provide emergency paid sick leave and emergency paid family and medical leave under the act. Eligible employers will be able to claim these credits based on qualifying leave they provide between the effective date and Dec. 31, 2020. Equivalent credits are available to self-employed individuals based on similar circumstances.
The Arizona Restaurant Association and the National Restaurant Association are still waiting for guidance from the U.S. Department of Labor on the provisions of FFCRA as many critical questions still remain unanswered surrounding the paid sick leave and expanded family and medical leave portions of the bill. On March 20, 2020, the National Restaurant Association sent a letter to the Secretary of the Department of Labor, Eugene Scalia asking for clarification on a series of questions.
On March 24, 2020, the Department of Labor published a Question & Answer page which provides additional guidance. We encourage all businesses owners and operators to read the entire Q&A document (linked below), but some key points we think are important is outlined below:
- Key provisions:
- Two weeks (up to 80 hours) of paid sick leave at the employee’s regular rate of pay where the employee is unable to work because the employee is quarantined (pursuant to Federal, State, or local government order or advice of a health care provider), and/or experiencing COVID-19 symptoms and seeking a medical diagnosis.
- Two weeks (up to 80 hours) of paid sick leave at two-thirds the employee’s regular rate of pay because the employee is unable to work because of a bona fide need to care for an individual subject to quarantine (pursuant to Federal, State, or local government order or advice of a health care provider), or care for a child (under 18 years of age) whose school or child care provider is closed or unavailable for reasons related to COVID-19, and/or the employee is experiencing a substantially similar condition as specified by the Secretary of Health and Human Services, in consultation with the Secretaries of the Treasury and Labor.
- Effective Date: the paid leave provisions of the FFCRA is April 1, 2020.
- Employers impacted: employers with 500 or more employees, including employees across all separate establishments and divisions of a corporation.
- Reasons for leave:
- An employee is subject to a Federal, State, or local quarantine or isolation order related to COVID-19, or is caring for someone subject to the order.
- An employee has been advised by a health care provider to self-quarantine related to COVID-19, or is caring for someone subject to a self-quarantine.
- An employee is experiencing COVID-19 symptoms and is seeking a medical diagnosis.
- An employee is caring for a child whose school or place of care is closed (or child care provider is unavailable) for reasons related to COVID-19.
- Other reasons specified by the Secretary of Health and Human Services – Note: not other reasons have been identified at this time.
- Duration of Leave: A full-time employee is eligible for up to 80 hours of leave, and a part-time employee is eligible for the number of hours of leave that the employee works on average over a two-week period. Except an employee, caring for child whose school or place of care is closed, is eligible for up to 12 weeks of leave at 40 hours a week for full-time employees and a part-time employee is eligible for leave for the number of hours that the employee is normally scheduled to work over that period.
- Calculation of Pay:
- Employees subject to a quarantine, self-quarantine or are experiencing symptoms of COVID-19 shall be paid at either their regular rate or the applicable minimum wage, whichever is higher, up to $511 per day and $5,110 in the aggregate (over a 2-week period).
- Employees caring for an individual that is subject to a quarantine or self-quarantine shall be paid at 2/3 their regular rate or 2/3 the applicable minimum wage, whichever is higher, up to $200 per day and $2,000 in the aggregate (over a 2-week period).
- Employees taking leave to care for a child whose school or place of care is closed shall be paid at 2/3 their regular rate or 2/3 the applicable minimum wage, whichever is higher, up to $200 per day and $12,000 in the aggregate (over a 12-week period—two weeks of paid sick leave followed by up to 10 weeks of paid expanded family and medical leave).
Key Questions Answered by DOL
- As an employer, how do I know if my business is under the 500-employee threshold and therefore must provide paid sick leave or expanded family and medical leave? You have fewer than 500 employees if, at the time your employee’s leave is to be taken, you employ fewer than 500 full-time and part-time employees within the United States, which includes any State of the United States, the District of Columbia, or any Territory or possession of the United States. In making this determination, you should include employees on leave; temporary employees who are jointly employed by you and another employer, and day laborers. Typically, a corporation (including its separate establishments or divisions) is considered to be a single employer and its employees must each be counted towards the 500-employee threshold.
- If I am a private sector employer and have 500 or more employees, do the Acts apply to me? No. Private sector employers are only required to comply with the Acts if they have fewer than 500 employees.
- If providing child care-related paid sick leave and expanded family and medical leave at my business with fewer than 50 employees would jeopardize the viability of my business as a going concern, how do I take advantage of the small business exemption? To elect this small business exemption, you should document why your business with fewer than 50 employees meets the criteria set forth by the Department, which will be addressed in more detail in forthcoming regulations. You should not send any materials to the Department of Labor when seeking a small business exemption for paid sick leave and expanded family and medical leave.
The ARA is still analyzing how the Phase-III relieve measure will impact these provisions. Once more information is available, we will provide an update.
Essential Service Designation
With many States and cities around the country issuing shelter-in-place orders and only allowing movement for essential services or to access essential services, many restaurants may be wondering what a shelter-in-place order might look like in Arizona. Fortunately, Arizona restaurants have two layers of protections in such a scenario. First, on March 19, 2020 The U.S. Department of Homeland Security’s Cybersecurity and Infrastructure Security Agency (CISA) issued a memorandum identifying essential industries and workers during the COVID-19 response, which includes restaurant workers and operations. Additionally, Governor Ducey issued an Executive Order on March 23, 2020 identifying Arizona’s essential industries and preempting cities form taking any actions that impact those functions. In Governor Ducey’s order, restaurants operations for delivery and takeout are listed as essential.