On March 14, 2020 the United States House of Representatives passed sweeping legislation known as the Families First Coronavirus Response Act to address the COVID-19 (coronavirus) outbreak. The proposed legislation would, among other things, provide for an expansion of the federal Family and Medical Leave Act (FMLA), as well as include provisions for employer-mandated paid sick leave. The bill (H.R. 6201) was subsequently passed by the Senate and then signed into law by President Trump on March 18 and takes effect 15 days post signing, on April 2.
What are the provisions of the Act?
The Act provides for two separate components: Emergency Family and Medical Leave and Emergency Paid Sick Leave. Each are summarized below.
Emergency Family and Medical Leave Act would provide eligible employees up to 12 weeks of job-protected leave for “a qualifying need related to a public health emergency.”
What employers are covered?
Private employers with less than 500 employees and most public employers.
Note: Some small businesses (defined as those with fewer than 50 employees) may be exempt from providing Emergency Family and Medical Leave if the required leave would jeopardize the viability of the business.
Who is an eligible employee? Eligible employees are those who have been on the employer’s payroll for at least 30 calendar days. This includes both full-time and part-time employees.
Note: Employers may exclude health care providers and emergency responders from this emergency leave entitlement.
What Leave is Provided and For What Purpose?
Eligible employees may take up to 12 weeks of job-protected leave when the employee is unable to work (either at the employer’s place of business or remotely) due to a need to care for a minor child if the child’s school or place of childcare has been closed or is unavailable due to a public health emergency. The term ‘‘public health emergency’’ means an emergency with respect to COVID-19 declared by a federal, state, or local authority.
Is Emergency Family and Medical Leave Paid or Unpaid? The first 10 days of Emergency Family and Medical Leave can be unpaid, although an employee may elect to substitute available paid time off (e.g., vacation, personal or sick time, including emergency paid sick leave, described below), however, an employer may not mandate the use of such time.
Following the first 10 days of Emergency Family and Medical Leave employers must pay employees two-thirds of the employee’s regular rate, for the number of hours the employee would otherwise be scheduled to work, up to a maximum of $200 per day/$10,000 total leave payments.
In the case of an employee whose schedule varies from week-to-week, the employee must be paid based on the average number of hours the employee worked for the six months prior to taking Emergency Family and Medical Leave. Employees who have worked for less than six months prior to leave are entitled to the employee’s reasonable expectation at hiring of the average number of hours the employee would normally be scheduled to work.
Do employees have to provide notice of leave? Where the need for leave is foreseeable, the employee must provide the employer “with such notice of leave as is practicable.”
Must an employee be returned to their same position following leave? Generally, yes. Emergency Family and Medical Leave is a job-protected leave and as such, covered employers must restore eligible employees to the same or equivalent position they had prior to the leave (mirrors FMLA provisions). However, there is an exception to the job restoration requirement for employers with less than 25 employees, if the employee’s position no longer exists following leave due to operational changes caused by a public health emergency (e.g., a dramatic downturn in business caused by the COVID-19 pandemic), subject to certain conditions. The exclusion is subject to the employer making reasonable attempts to contact the employee and return them should an equivalent position becomes available within the one year period that begins on the earlier of (a) the date on which the qualifying need related to the public health emergency concludes; or (b) the date that is 12 weeks following the date on which the employee’s qualifying leave began.
When does this law take effect and is it a permanent amendment to the federal Family and Medical Leave Act? The law takes effect 15 days after signing (which means it is effective April 2, 2020) and sunsets on December 31, 2020.
Emergency Paid Sick Leave Act requires covered employers to provide paid sick time to an employee who is unable to work (either at the employer’s place of business or remotely) because: (1) the employee is subject to a federal, state, or local quarantine or isolation order related to COVID-19; (2) the employee has been advised by a health care provider to self-quarantine because of COVID-19; (3) the employee is experiencing symptoms of COVID-19 and is seeking a medical diagnosis; (4) the employee is caring for an individual subject or advised to quarantine or be in isolation; (5) the employee is caring for a son or daughter under the age of 18 whose school or place of care is closed, or the child care provider is unavailable, due to COVID-19 precautions; or (6) the employee is experiencing substantially similar conditions as specified by the Secretary of Health and Human Services, in consultation with the Secretaries of Labor and Treasury.
What employers and employees are covered? The requirements for employer coverage for Emergency Paid Sick Leave are the same as the provisions for Emergency Family and Medical Leave Act, including the same exceptions for health care providers and emergency responders, as well as the small business employer exemption.
Unlike the Emergency Family and Medical Leave provision, however, all employees are eligible for Emergency Paid Sick Leave upon the Act’s effective date; there is no requirement to be on the employer’s payroll for at least 30 days.
What benefit is provided under Emergency Paid Sick Leave?
In general, an employee would be entitled to up to two weeks (80 hours) of paid sick time (pro-rated based on the employee’s regular work hours).
The Act limits an employer’s requirement of paid leave to $511 per day ($5,110 in the aggregate) where leave is taken for reasons (1), (2), and (3) noted above (generally, an employee’s own illness or quarantine); and $200 per day ($2,000 in the aggregate) where leave is taken for reasons (4), (5), or (6) noted above (care for others or school closures).
Employers are prohibited from retaliating against any employee who takes leave under the law and indicates that the failure to pay required sick leave will be treated as a failure to pay minimum wages in violation of the Fair Labor Standards Act.
Note: Any paid leave provided by an employer before the law is effective cannot be credited against the employee’s paid leave entitlement.
How will these paid leave benefits be paid for? Covered employers are responsible for the applicable employee payments (for Emergency Family and Medical Leave and/or Emergency Paid Sick Leave) and would be eligible for a “refund” through a tax credit. The credit is computed on a quarterly basis, and the employer would take the total amount of qualified sick leave wages paid and qualified family leave wages paid during that quarter, and would be able to use that as a credit against the employer portion of the social security taxes (at 6.2%) that would otherwise be due from the employer. Any excess amounts above and beyond the employer-portion of the social security taxes would be refunded as a credit (as if the employer had overpaid the employer-portion of the social security taxes for that period.)
Note that these credits are only available to those employers that are required to offer these benefits under the new law, and these new credits are not generally extended to employers not subject to the new mandates under the Act.
Are there any employer notice requirements? Yes, every employer shall post a notice of the requirements of the Act, to be prepared or approved by the Secretary of Labor. The model notice is to be made available no more than seven (7) days after the enactment of this Act.
If an employer has been providing paid leave for a reason related to Covid-19, can it be credited toward this new requirement? No, any paid leave provided by an employer before the law is effective cannot be credited against the employee’s paid leave entitlement.
What’s Next? HR Works will continue to monitor and provide updated information, as it becomes available. Clients should consult with legal counsel regarding specific application of these provisions within their workplace.
Additionally states may pass additional legislation providing relief, as well.