To follow up on our recent blog post, “Workplace Planning for Coronavirus Concerns,” we are summarizing for our clients the Families First Coronavirus Response Act (FFCRA), which President Trump signed into law on March 18, 2020. The House of Representative passed an earlier bill on March 14, but – two days later – revisited and significantly altered the bill on March 16, before sending it to the Senate for consideration. On March 18, the Senate passed the revised House version with no changes, and, that same day, the amended bill was signed into law. The FFCRA takes effect not later than April 2, 2020 (15 days after its enactment) and expires on December 31, 2020. With respect to employers, it contains certain provisions of particular note, including the Emergency Family and Medical Leave Expansion Act and the Emergency Paid Sick Leave Act, discussed below.
Emergency Family and Medical Leave Expansion Act
The Emergency Family and Medical Leave Expansion Act (“Emergency FMLA” or the “Act”) applies to employers with fewer than 500 employees (“covered employers”). Employees who have been employed by a covered employer for 30 calendar days are eligible for up to 12 weeks of emergency paid family medical leave due to a “qualifying need” arising from “a public health emergency” with respect to COVID-19 declared by a federal, state, or local authority.
As compared to the earlier bill, the Emergency FMLA, to some extent, limits the reasons for which an employee qualifies for leave. For example, the Act narrows the earlier House bill’s definition of a “qualifying need related to a public health emergency” by making such leave available to employees who are unable to work or telework because of a need to care for children under age 18, if the childrens’ schools or places of care have been closed or if the child care providers are unavailable due to a public health emergency. Unlike the earlier bill, the Act does not provide coverage for those in quarantine or to care for others in quarantine.
While the Act provides for 12 weeks of “paid” job-protected emergency FMLA leave, the initial 10 days of leave (as compared to 14 days in the earlier bill) are unpaid. Employees, however, may use accrued personal or sick leave during those first 10 days but are not required to do so.
The remainder of emergency FMLA leave must be paid, up to the full 12 weeks of leave, at a rate of at least two-thirds of an employee’s regular rate of pay under a normal work schedule. Importantly, unlike the prior bill, the Act caps the amount of pay for emergency FMLA leave at $200 per day and $10,000 in the aggregate per employee.
As with all other types of FMLA leave, covered employers must restore an employee who takes emergency leave to his or her same or equivalent position upon the employee’s return to work. Although the Act covers employees with fewer than 500 employees, it provides an exception, subject to certain specified conditions, for employers with fewer than 25 employees who are unable to offer an employee reinstatement from leave because the position no longer exists due to circumstances caused by the public health emergency.
Employers of healthcare workers and emergency responders may exclude such employees from emergency FMLA entitlement. Finally, employers with fewer than 50 employees may also be eligible for exemption due to financial hardship if the required leave would be detrimental to their businesses.
Emergency Paid Sick Leave Act
The paid sick leave portion of the FFCRA applies to private employers with fewer than 500 employees and to public agencies having at least one employee (“covered employers”). These covered employers are required to provide emergency paid sick leave for a “qualifying emergency” to any employee who is unable to work or telework, regardless of how long they have been employed (thus providing expanded coverage as compared to state paid sick leave laws, which generally include a length of service eligibility requirement).
An employee qualifies for emergency paid sick leave if the employee:
- Is subject to a federal, state, or local quarantine or isolation order related to COVID-19
- Has been advised by a healthcare provider to self-quarantine due to concerns related to COVID-19
- Is experiencing symptoms of COVID-19 and seeking a medical diagnosis
- Is caring for an individual who is subject to a quarantine or isolation order (as described in the first bullet above), or has “been advised” to self-quarantine (as described in the second bullet above)
- Is caring for a child because the child’s school or place of care has been closed or the child’s regular care provider is unavailable due to COVID-19 precautions
- Is experiencing any other substantially similar condition specified by the Secretary of Health and Human Services in consultation with the Secretary of the Treasury and the Secretary of Labor
Full-time employees are entitled to 80 hours of emergency paid sick leave, and part-time employees are entitled to an amount based on the average number of hours they work in a two-week period. Sick leave benefits are capped at a certain amount per employee depending on the reasons for leave. For example, if the employee takes leave due to any of the reasons set forth in the first three bullets above, paid sick leave is capped at $511 per day and $5,110 in the aggregate per employee. If, however, the employee is out for any of the covered reasons set forth in the last three bullets above, paid sick time is capped at $200 per day and $2,000 in the aggregate per employee.
As with the earlier bill, employers may not require an employee to use “other paid leave provided by the employer” before using emergency sick leave, and may not require an employee to find a replacement during emergency paid sick leave.
Much like emergency FMLA leave, employers that employ healthcare providers or emergency responders may elect to exclude such employees from paid sick leave. In addition, the Secretary of Labor is authorized to issue regulations for good cause to exclude: (1) healthcare providers and emergency responders from the Act; and (2) small businesses with fewer than 50 employees when the imposition of such requirement would jeopardize the viability of the business.
The Emergency Paid Sick Leave Act includes employer posting requirements and directs the Secretary of Labor to make publicly available a model notice to be used by employers. To the extent that all or a part of an employer’s workforce is working remotely, covered employers should consider distributing the notice to employees.
Tax Credits for Payments for Emergency Family and Sick Family Leave
The FFCRA provides tax credits to employers who provide paid sick and emergency family and medical leave. The credits are to be claimed on an employer’s quarterly payroll tax return. Such credits are refundable where the credits are greater than the amount an employer owes in payroll taxes.
As the new law will take effect not later than April 2, 2020 (15 days after its enactment), employers with fewer than 500 employees must act quickly to implement emergency paid sick leave and provide for expanded FMLA leave to ensure compliance with the law’s requirements.
With the passage of these laws, advocates for employers and employees alike have expressed concerns about coverage and requirements. For example, employees are questioning the exclusion of large companies from paid leave requirements and seeking to expand the reasons for which paid leave may be taken. And employers are concerned about additional expenses in these challenging times.
Lawmakers and the White House are discussing a new phase of legislation related to the coronavirus, to address continued challenges in today’s environment. Such legislation may or may not impact the laws discussed above. We will continue to monitor any new developments.
Given the evolving nature of the current situation and rapidly evolving laws, employers with questions are advised to consult with counsel regarding their specific questions or concerns, and also to consider state leave that may come into play. If you have any questions or need assistance, please feel free to contact Elizabeth Cowit.
To view all client alerts in Gibbons “The Coronavirus Pandemic and Your Business: How We Can Help” Series, click here.