03/19/2020

Families First Coronavirus Response Act Signed Into Law, Will Quickly Impact Employers

Provided by OSAE Member Marc Fishel, Esq., FDAR

On Wednesday, March 18, 2020, the U.S. Senate passed H.R. 6201, the Families First Coronavirus Response Act. President Donald Trump signed the bill into law that night. Provisions of the act take effect in 15 days and automatically expire on Dec. 31, 2020.

The measure passed by the Senate keeps intact the majority of provisions discussed in our March 16, 2020 blog about the bill passed by the House of Representatives. However, the House passed minor changes in an effort to ensure easier passage through the Senate. The bill requires the Secretary of Labor to issue additional regulations before the act takes affect, which will assist employers in determining leave eligibility and entitlement.

Paid Sick Leave
The act provides two weeks of paid sick leave to workers. To be eligible for paid sick leave, workers must be employed by an employer with 500 or fewer employees or a public employer. Healthcare providers or emergency response agencies may elect to exclude their employees from the new sick leave benefit (regulations issued by the Secretary of Labor are expected to further clarify the terms “healthcare providers” and “emergency response agencies”).

While employers with 500 or fewer employees are required to pay employees while they are out on leave, employers with 50 or fewer employees may apply for a waiver from the Secretary of Labor when “the imposition of such requirements would jeopardize the viability of the business…”

Full-time workers are entitled to 80 hours of paid sick leave. For part-time employees, the leave is calculated as “a number of hours equal to the number of hours that such employee works, on average, over a 2-week period.” This means, for example, that if a part-time worker typically works 55 hours over a 2-week period, they are entitled to 55 hours of paid sick leave. This is in addition to paid leave already offered by the employer, if any. Critically, the final version of the bill prohibits employers from requiring employees to exhaust other accrued leave prior to taking leave under the bill. This means that employers cannot require employees to use vacation or accrued sick time before using the new sick leave benefit.

Eligible employees may begin taking sick leave immediately with no waiting period. Eligible employees may take sick leave for the following reasons: 1) the employee is subject to a federal, state or local quarantine or isolation order related to the pandemic; 2) the employee has been advised by a healthcare provider to self-quarantine due to the pandemic; 3) the employee is experiencing symptoms of COVID-19 and is seeking a medical diagnosis; 4) the employee is caring for an individual who is subject to a federal, state or local quarantine or has been advised by a healthcare provider to self-quarantine; 5) the employee is caring for a son or daughter if the child’s school has been closed or their child care provider is unavailable due to the pandemic; and, finally, 6) 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 last item is confusing and simply indicates, as mentioned above, that there are forthcoming regulations which may specify additional situations which qualify a worker for paid sick leave.

Leave must be paid at an employee’s regular rate of pay. However, paid sick leave need not exceed $511.00 per day and $5,110.00 total per employee if the employee is taking leave for reasons 1-3, described above. Paid sick leave shall not exceed $200.00 per day and $2,000.00 total per employee if the employee is taking leave for reasons 4-6, described above. In addition, an employee taking leave for reasons 4-6 need only be compensated at 2/3 their regular rate of pay.

 Paid FMLA Leave
The version passed by the Senate includes paid  Family Medical Leave (FMLA leave). This is a significant departure from typical FMLA leave, which is unpaid. The leave is available to workers who have been employed for 30 days or more and who work for employers with fewer than 500 employees or a public employer. The Secretary of Labor may issue regulations which exclude from eligible employees those employed as healthcare providers and emergency responders. Employees who is able to work from home while caring for a child whose school has closed are not eligible for the new FMLA leave.

Under this act, eligible workers may take FMLA leave only due to a need for leave to care for a son or daughter under 18 years of age if the child’s school or place of care has been closed, or the child’s care provider is unavailable due to the Coronavirus. This is significantly narrower than the original version of the bill, which would have allowed workers to take FMLA leave in several other situations. This limitation does not apply to non-coronavirus-related FMLA leave already available to qualified employees, which remains unpaid.

Under the act, the first 10 days of FMLA leave taken by an employee for child care related reasons is unpaid. Employees may elect to use other accrued paid leave during these first 10-days of FMLA leave. The leave is then paid at 2/3 of their regular rate of pay for the remainder of the 12-week period. Full-time employees are entitled to 2/3 of their regular rate of pay. Part-time employees are entitled to 2/3 of their regular rate of pay based on the number of hours the employee works, on average, over a normal 2-week period. Paid leave shall not exceed $200.00 per day or $10,000.00 total, per employee. Working together with the sick leave benefit described in the previous section, which allows workers to take paid sick leave to care for a child whose school has closed or whose care provider is unavailable (see item 5 above), employees are immediately eligible for paid leave with no waiting period.

As with the paid sick leave provisions, employers with 50 or fewer employees may apply for a waiver form the Secretary of Labor when “the imposition of such requirements would jeopardize the viability of the business…”

For the vast majority of employers, FMLA leave is job-protected leave, meaning that employees have the right to return to the position they left to go on leave. This rule does not apply to employers with 25 or fewer employees when the employee is taking FMLA leave under the bill and the position held by the employee when the leave commenced does not exist due to economic conditions or other changes in operating conditions caused by the pandemic. The employer must still make reasonable efforts to restore the employee to a position similar to the one the employee left to take leave.

Tax Credits
The act also includes tax credit provisions that will reimburse employers for 100 percent of the qualified sick leave wages paid to employees. The credit does not apply to the federal government or any state or municipal governments.

OSAE Member FDAR will continue to monitor for the issuance of any regulations by the Secretary of Labor. Please select this link to read the original article from FDAR's blog.