On March 18, 2020, after it passed in the Senate, the Families First Coronavirus Response Act (the “Act”) was signed into law by President Trump, with the goal of providing economic assistance to employees and their families in response to the 2019 novel Coronavirus (COVID-19). The Act, among other things, (i) expands benefits under the Family and Medical Leave Act (“FMLA”), including paid family leave benefits; (ii) provides emergency paid sick leave benefits; and (iii) enhances the availability of unemployment insurance to certain affected workers.
As we previously reported, the initial bill was passed by the House of Representatives on March 14. On March 16, the House approved a revised bill, which narrowed some of the provisions contained in the initial bill, particularly with respect to paid family leave. Here are some of the key aspects of the Act, in its final form:I. AMENDMENTS TO THE FMLA
The Act amends the FMLA by providing up to 12 weeks of family leave to eligible employees of covered employers based on a qualifying need due to a public health emergency ("Public Health Emergency Leave"). However, as compared to the initial bill, the Act significantly reduces the reasons an eligible employee may be entitled to such leave.
Reasons for Leave
Under the Act, an eligible employee may be entitled to Public Health Emergency Leave ONLY WHEN (i) the employee is unable to work because the employee must take care of his/her son or daughter under the age of 18 whose school or place of care has closed, or whose child care provider is unavailable due to a public health emergency; and (ii) the employee is unable to work, either onsite or remotely. Unlike what was provided in the initial bill, there are no other qualifying reasons for Public Health Emergency Leave.
Eligibility requirements under the FMLA with respect to employees seeking Public Health Emergency Leave remain the same as in the initial bill: the employee need only have been employed by a Covered Employer for at least 30 days. A “Covered Employer” includes all public employers, and private employers with less than 500 employees.
Small Business Exemption/Exemption for Health Care Providers
The Act provides that small businesses with less than 50 employees will be eligible for an exemption from the Public Health Emergency Leave requirements, where compliance with the requirements would jeopardize the ability of the business to continue as a going concern.
In addition, certain health care providers and emergency responders may be excluded from the definition of "Eligible Employee," and therefore will not be entitled to Public Health Emergency Leave.
The Department of Labor is expected to issue further guidance on these exemptions.
Pay During Public Health Emergency Leave
Employees are not entitled to pay for the first 10 days of Public Health Emergency Leave. However, an employee may choose to use accrued paid leave, or the employee can utilize the new sick leave benefits, as described below, for the first 10 days.
After the first 10 days, paid leave will be calculated at a rate not less than two-thirds the employee’s “regular rate of pay” (as defined by the Fair Labor Standards Act), based on the hours the employee would otherwise be scheduled to work. If the employee has a schedule that varies week to week, the rate of pay will be based on the average hours worked per day for the six month period preceding the leave, or the reasonable expected schedule, if the employee did not work for that time period.
Pay for Public Health Emergency Leave is capped at $200 per day, and $10,000 in the aggregate, which matches the cap on allowable tax credits available to the employer to offset the costs of these benefits (discussed below).
Reinstatement of Employment After Public Health Emergency Leave
Reinstatement of employment after Public Health Emergency Leave is required for employers with at least 25 employees. For employers with fewer than 25 employees, the requirement to reinstate employees does not apply when certain conditions, as set forth in the Act, are met.II. PAID SICK LEAVE
The Emergency Paid Sick Leave Act (“EPSLA”), part of the Act, applies only to public employers and private employers with fewer than 500 employees. The EPSLA provides covered employees with up to 80 hours (two weeks) of paid sick leave for reasons related to the Coronavirus pandemic. As with the FMLA amendments, employers will be entitled to a tax credit to reimburse for the costs of the leave.
An employee would be entitled to use EPSLA leave if:
- The employee is subject to a federal, state or local quarantine or isolation order related to COVID-19;
- The employee has been advised by a health care provider to self-quarantine due to concerns related to COVID-19;
- The employee is experiencing symptoms of COVID-19 and is seeking a medical diagnosis;
- To care for or assist an "individual" subject to a federal, state or local quarantine or isolation order related to COVID-19, or who has been advised by a health care provider to self-quarantine due concerns related to COVID-19 (Note: the individual need not be a family member);
- To care for the employee’s son or daughter under the age of 18 because the child’s school or place of care has been closed, or the child’s care provider is unavailable due to COVID-19; or
- The employee is experiencing any other "substantially similar condition," as specified by the Secretary of Health and Human Services.
Full-time employees would be entitled to up to 80 hours (two weeks) of paid sick time for a covered purpose, regardless of how long the employee has been employed by the employer. Part-time employees would receive a number of hours equal to the number of hours that the employee works, on average, over a two-week period.
Note: An employee is not entitled to EPSLA leave if he/she is able to work remotely.
Rate of Pay
Under the Act, employees will be compensated at either their regular rate of pay, the federal minimum wage, or the local minimum wage, whichever is greater, based on the number of hours the employee would otherwise normally be scheduled to work over a two-week period. The Secretary of Labor will be issuing further guidance on compensation for EPSLA leave.
EPSLA leave benefits are capped at (i) $511 per day, and $5,110 in the aggregate, for leave taken due to an employee's own personal condition; and (ii) $200 per day, and $2,000 in the aggregate, when the leave is taken to care for another person, or due to the employee's "substantially similar condition", as identified by the Secretary of Health and Human Services.
Employers With Existing Paid Leave Policies
EPSLA leave is in addition to any paid leave program a covered employer may already have in place, as well as any paid sick leave benefits an employee may be entitled to under any other federal, state, or local law. Moreover, an employer may not require an employee to use other paid leave provided by the employer before the employee takes EPSLA leave, though an employee may choose to do so.
III. EFFECTIVE DATES
The Act's amendments to the FMLA and the provisions of EPSLA will become effective on April 2, 2020 and expire on December 31, 2020.
IV. TAX CREDITS
Employers will be entitled to a tax credit equal to 100 percent of the EPSLA leave and Public Health Emergency Leave under the FMLA paid by the employer, subject to the caps referenced above. Further guidance and regulations will be forthcoming.V. UNEMPLOYMENT INSURANCE
The Emergency Unemployment Insurance Stabilization and Access Act of 2020 (“UI Act”), another portion of the Act, would allow states greater access to emergency grants to provide unemployment compensation to employees who lose their jobs due to the coronavirus pandemic, subject to certain conditions. The UI Act would add a total of one billion dollars in funds for state unemployment programs.VI. WHAT’S NEXT?
Employers should review the key provisions of the Act, as well as their internal leave policies, and determine how these policies, and their businesses as a whole, are impacted.
Things are moving quickly, and new developments, rules and restrictions seem to come in by the minute. We are monitoring these unprecedented events closely, and will report back significant developments as they unfold. In the meantime, we are here to help.
For more information on how the Coronavirus outbreak may impact your business, contact Ron Rolleri at firstname.lastname@example.org.