Pay Obligations if Dealer Chooses or Must Close Operations

GNYADA understands that dealers are making very difficult decisions regarding whether to continue operating during this ongoing public health crisis.  

If a dealer decides to shut down during the crisis, generally, the dealer 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 dealer’s responsibilities:

Would a dealer 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 dealer’s responsibilities if it is confirmed that an employee has coronavirus and had contact with the entire staff requiring the dealership to shut down because every employee must be quarantined?  
Assuming the dealer 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 dealer required to pay out accrued sick, vacation and personal leave to employees?
Yes, if the dealership closes and employees are laid off during the COVID-19 pandemic the dealer would be obligated to pay the benefits described above.  In addition, dealers should pay accrued but unused sick pay.  Dealers may be obligated under a CBA or their own policies to pay out accrued but unused vacation, personal days.

Are dealers required to provide specific notices to employees if the dealer decides to cease operations during the State of Emergency?
Yes. Dealers 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 GNYADA’s 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.

The federal government is providing several relief packages for employers, we will keep dealers updated on any new programs or requirements as they become effective.