On March 18, 2020, H.R. 6201, the “Families First Coronavirus Response Act,” was signed into law. This emergency measure provides benefits for the many Americans that have been (or soon will be) affected by COVID-19. The Act primarily address the following concerns: access to food, paid leave, and costs of testing and treatment.
This article will address the changes that are most likely to affect employers – the Emergency Family and Medical Leave Expansion Act and the Emergency Paid Sick Leave Act. As will become clear, these changes place a financial burden on businesses employing fewer than 500 people. The Acts do not apply to larger employers. Division G attempts to address this financial burden by allowing a tax credit equal to 100% of the qualified sick leave wages paid. Consultation with labor counsel and tax advisors is recommended.
Emergency Family and Medical Leave Expansion Act
The Family and Medical Leave Act of 1993 (“FMLA”) entitles employees to 12 workweeks of leave during any 12 month period:
- for the birth of a child,
- for adoption,
- to provide care for an immediate family member with a serious health condition,
- due to one’s own serious health condition, or
- due to “any qualifying exigency” determined by regulation arising from an immediate family member’s active duty in the Armed Forces.
To be eligible, the employer must have “50 or more employees for each working day during each of 20 or more calendar workweeks in the current or preceding calendar year.” (Section 101(4)(A)(i)). Also, the employee must have at least 12 months of employment and 1,250 hours of service within the preceding 12 months of employment. (Section 101(2)). An eligible employee that contracts COVID-19 such that he or she has to be hospitalized would likely be eligible for FMLA under the original statute.
The Emergency Family and Medical Leave Expansion Act (“the Expansion Act”), focuses on the impact to families of the preventative measures taken to address the COVID-19 pandemic including school closures and shelter in place orders.
The Expansion Act temporarily adds to the reasons for leave “a qualifying need related to a public health emergency.” The statute is careful to limit the scope of the term “emergency” to those declared by a Federal, State, or local authority relating to COVID-19. California Governor Gavin Newsom declared a state of emergency relating to COVID-19 on March 4, 2020 and the President of the United States declared the same on a national level on March 13, 2020. Therefore, the “qualifying need” must arise from the effects of the current COVID-19 pandemic addressed in those declarations.
What is a “qualifying need?” Under Section 102(a)(1)(F)(A) a “qualifying need” means, “the employee is unable to work (or telework) due to a need for leave to care for the son or daughter under 18 years of age of such employee if the school or place of care has been closed, or the child provider of such son or daughter is unavailable, due to a public health emergency.” Therefore, any schooling or child care that is disrupted as a result of the declared states of emergency may make an employee eligible for FMLA. If the need for leave is foreseeable, the Expansion Act requires the employee to provide the employer with notice “as is practicable.” (Section 110(c)).
Leave on a public health emergency basis is different than the other types of leave in two notable ways. First, an employee becomes eligible for leave on public health emergency grounds after just 30 calendar days of employment. (Certain health care providers and emergency responders may be ineligible at the election of their employer pursuant to section 2105. They could also be deemed ineligible in the future by the Secretary of Labor under section 110(a)(3)). Second, the Expansion Act applies to all employers with “…fewer than 500 employees.” It does not apply to large businesses. Considering that small businesses are less likely to have remote work options and the Expansion Act places a large financial burden on the employers, it includes a gateway to exempt small businesses with fewer than 50 employees if it “would jeopardize the viability of the business as a going concern.” (Section 110(a)(3)).
What benefits are due? Under the Expansion Act, the first ten (10) days of leave for a public health emergency may be unpaid and during that time the employee may use accrued time. After that, the employer “shall provide” paid leave of not less than two thirds of an employee’s regular rate of pay based on the number of hours he or she would normally work, “not to exceed $200 per day and $10,000 in the aggregate.” (Section 110(b)). Consult your labor counsel with any questions regarding calculating amounts due as they may vary based on specific facts. In the case of multi-employer collective bargaining agreements, the payments may be made to a multi-employer fund that provides paid leave to employees.
Although the Expansion Act increases the burden on small businesses in some ways, it loosens it in others. First, it exempts businesses that do not have “50 or more employees for each working day during each of 20 or more calendar workweeks in the current or preceding calendar year” from the enforcement provisions of the FMLA. (Section 110(a)(1)(B)). Those provisions make an employer civilly liable if it interferes with an employee’s ability to obtain FMLA benefits. (Section 107). Second, it exempts businesses with fewer than 25 employees from the requirement that an employee’s position be restored upon return from FMLA leave in these scenarios: a) when leave is taken under the “public health emergency” provision, b) when the position no longer exists due to economic conditions or other changes in operating conditions, c) when the employer makes reasonable efforts to restore the employee to a similar job, and d) when the employee contacts the employee to offer an equivalent position. (Sections 104(a), 110(d)).
Notably, leave under the Exemption Act is limited and will be allowed only through December 31, 2020. Hopefully, school closures and other shelter in places orders will be lifted long before that. If not, we may see an amendment to that deadline.
To summarize, the Emergency Family and Medical Leave Expansion Act generally allows any employee working for an organization with fewer than 500 employees, that has been employed for at least 30 calendar days, to request FMLA in order to care for a minor child who’s school or daycare has become unavailable due to the current COVID-19 pandemic. When eligible, an employer must pay at least two-thirds of that employee’s regular pay (excluding the first ten days) not to exceed $200 per day or $10,000 total.
Emergency Paid Sick Leave Act
Until December 31, 2020, this new legislation mandates private employers with fewer than 500 employees and non-private employers with more than 1 employee, to provide non-carry over paid sick time (80 hours for full-time employees and for part-time employees what they would have worked over two weeks) for any employee that cannot work due to one of the following reasons:
- The employee is subject to a government-mandated COVID-19 isolation order or quarantine,
- The employee has been advised to self-quarantine by a health care provider,
- The employee is experiencing symptoms of COVID-19 and seeking a medical diagnosis,
- The employee is caring for an individual who (a) is subject to a government-mandated COVID-19 isolation order or quarantine, or (b) has been advised to self-quarantine by a health care provider,
- The employee is caring for their child whose school has been closed or child care provider is unavailable due to COVID-19 precautions, or
- “The employee 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.”
The benefits are paid at the employee’s regular rate of pay or the minimum wage, whichever is higher. (Section 5110(5)(B)(i)). Benefits are limited to $511 per day or $5,110 in the aggregate if leave is taken for items 1, 2, or 3. They are limited to $200 per day or $2,000 in the aggregate if leave is taken for items 4, 5, or 6. (Section 5110(5)). Also, if leave is taken under items 4, 5, or 6, compensation is paid at two-thirds of the applicable pay rate. (Section 5110(5)(B)(ii)). The Secretary of Labor may exempt small businesses with fewer than 50 employees if it would “jeopardize the viability of the business…” (Section 5111)./p>
An employer or the Secretary of Labor may elect to exclude health care provides or emergency responders. (Sections 5102, 5111). Also, employers participating in multi-employer collective bargaining agreements may fulfill the requirements by contributing to a multi-employer fund that provides the employee with sick time. (Section 5106).
However, an employer may not require an employee to find a replacement employee to cover his or her shift. An employer also may not require an employee to first utilize accrued time. (Section 5102). An employer also may not “discharge, discipline, or in any other manner discriminate against” an employee that takes leave under the Act or institutes proceedings under the Act. (Section 5104). Employers are mandated to keep a posted of these benefits, which will be available in the near future. (Section 5103).
An employer that fails to pay sick leave or terminates an employee for use of this Act will be considered to be in violation of the Fair Labor Standards Act of 1938 subject to penalties. (Section 5105).
The Emergency Paid Sick Leave Act is very similar to the Expansion Act described above, but far broader. Pursuant to section 5107, it does appear that an employee can seek benefits under both Acts./p>
Keep an eye on our website for additional analysis and webinars, including the state of Temporary Disability Indemnity issues following COVID-19.
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