On March 18, 2020, President Trump signed the Families First Coronavirus Response Act into law. The Act significantly amends and expands the Family and Medical Leave Act (FMLA) on a temporary basis and addresses a number of topics relating to the COVID-19 pandemic. The Act’s provisions regarding paid leave are of paramount interest to employers. Employers must be prepared to comply with the Act’s requirements on April 1, 2020.
Expansion of FMLA Benefits
The Act provides for as many as 12 weeks of job-protected leave (including up to 10 weeks of paid leave) for employees who are unable to work in order to care for a child under 18 years of age if the child’s school or place of care is unavailable due to the COVID-19 situation.
Employer Eligibility
This requirement applies to private employers with fewer than 500 employees and most public employers. For smaller employers, this may introduce FMLA coverage to their workplace. The law limits the FMLA expansion to these amendments only. There is language allowing the Secretary of Labor to exclude healthcare providers and emergency responders, and to exempt businesses with fewer than 50 employees where the requirements would jeopardize the viability of their business. At this time, however, no such exclusions apply.
Employee Eligibility
An employee must have been employed for at least 30 calendar days to be eligible for the new FMLA benefits. Please note, this is a much lower threshold than the 12 month/1,250 hour requirement that typically applies to FMLA leave.
Job Restoration
The FMLA’s job restoration requirements generally apply, with limited flexibility for small businesses with fewer than 25 employees.
Paid Leave Requirement
Unlike other types of FMLA leave, the Act requires employers to pay employees during qualifying COVID-19 related leaves of absence. In more detail:
- The first 10 days of leave may be unpaid. During this unpaid 10-day period, an employee
may elect, but cannot be required, to use other paid time off benefits
(including sick leave, PTO, vacation, etc.). - After 10 days of leave have been taken, the
employer must provide paid leave. Paid
leave must be at least two-thirds an employee’s regular rate of pay for
the number of hours the employee would otherwise be normally scheduled to work;
provided, such paid leave is capped at $200 per day. There is a $10,000 cap on the aggregate
amount of paid FMLA leave that must be provided to an employee.
Effective Dates
The expanded FMLA benefits must be available to employees on or before April 1, 2020 and will expire on December 31, 2020.
Emergency Sick Leave
The Act also requires employers to
provide emergency sick leave for employees who cannot work for the following
reasons:
- 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
seeking a medical diagnosis; - The employee is caring for an individual who is
either (i) subject to a Federal, State, or local quarantine or isolation order
related to COVID-19, or (ii) has been advised by a health care provider to
self-quarantine due to concerns related to COVID-19; - The employee is caring for a child of such employee if
the school or place of care of the child has been closed, or the child care
provider is unavailable due to COVID-19 precautions; and - 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.
Employer Eligibility
The law applies to private employers with fewer than 500 employees and most public employers. As with the expanded FMLA benefits, there is language allowing the Secretary of Labor to exclude healthcare providers and emergency responders, and to exempt businesses with fewer than 50 employees where the requirements would jeopardize the viability of their business. At this time, however, no such exclusions apply.
Employee Eligibility
All employees are eligible for emergency paid sick leave benefits, regardless of length of employment.
Amount of Sick Leave and Interaction with other Benefits
For full time employees, the Act requires 80 hours of emergency paid sick leave. Part time employees are entitled to a prorated amount of leave, based on the employee’s regular work schedule. The emergency paid sick leave benefits may be in addition to other paid leave benefits currently provided by employers.
No Carryover
The emergency paid sick time does not carry over from one year to the next.
No Payout at Termination
Emergency paid sick time does not need to be paid out to an employee at termination.
Pay Rate
Paid sick leave must be paid as follows:
- At the employee’s regular rate of pay, up to a
maximum of $511 per day for conditions 1, 2, and 3 described above. - At two-thirds the employee’s regular rate,
subject to a maximum of $200 per day for qualifying conditions 4, 5, and 6
described above.
Effective Dates
Covered employers must begin providing emergency sick leave benefits by or before April 1, 2020. The emergency paid sick leave requirements will expire on December 31, 2020.
Penalties
Any employer that fails to comply with the emergency paid sick leave requirements will be in violation of the federal Fair Labor Standards Act.
Cost Mitigation
To help offset the costs of providing
the paid leave requirements, the Act allows employers to use tax credits
against the quarterly payroll taxes imposed on the employer in the amount equal
to 100% of the qualified FMLA paid leave and paid emergency sick leave wages
incurred by an employer, subject to the requirements of the forthcoming
Treasury Department regulations.
For more information on the Families First Coronavirus Response Act, please contact an attorney in MPBA’s employment practice group, including Tammy Roe (troe@mpba.com) or Sara Campbell (scampbell@mpba.com).