The Families First Coronavirus Response Act (“Act”) was passed by the Senate and signed by President Trump on March 18, 2020. According to recent guidance issued by the Department of Labor, the Act will go into effect on April 1, 2020, employers must immediately determine its impact on their policies and employees. As it relates to employers, the Act includes provisions relating to sick leave and emergency paid leave under the Family and Medical Leave Act (“FMLA”). Summaries of these provisions appear below:
Paid Sick Leave
The sick leave provisions of the Act require covered public employers and private employers with less than 500 employees to provide 80 hours of paid sick time (for employees who work less than 40 hours/week, the paid leave is the typical number of hours the employee is scheduled to work in a two-week period) to employees who are unable to work (whether in person or from home) due to the following reasons:
The Act caps the paid leave at $511/day (up to $5,110 per employee) when the leave is taken for the first three reasons listed above and 2/3 of the employee’s regular rate of pay or minimum wage, whichever is greater, capped at $200/day (up to $2,000 per employee) when leave is taken for any of the last three reasons. Failure to pay the paid leave required under the Act is deemed to be a violation under the Fair Labor Standards Act.
Employees are immediately eligible for these leave benefits, but certain exclusions apply. Health care providers and emergency personnel may be excluded from coverage. In addition, under the Act, the Secretary of Labor is permitted to promulgate regulations to: further exclude medical personnel and emergency responders; in certain instances, exempt businesses with less than 50 employees; and provide consistency between the paid leave and the tax credits. The Act further prohibits retaliation against employees who take leave under the Act.
This paid leave will not carry over into the next calendar year and the provisions sunset on December 31, 2020.
Emergency Family and Medical Leave
The sick leave provisions of the Act require covered public employers and private employers with less than 500 employees to provide up to 12 weeks of leave under the FMLA for "a qualifying need related to a public health emergency." "Qualifying need" refers to a situation where an employee is unable to work (whether in person or at home) because he/she must care for a minor child whose school or day care is closed or otherwise unavailable due to a public health emergency.
Employee who have been employed for at least 30 calendar days are eligible for this leave. The first 10 days (2 weeks) of this leave may be unpaid unless the employee opts to run paid leave concurrently with the emergency leave under the FMLA. While an employee may opt to run paid time off concurrent with this time (in order to receive pay for the first 10 days), an employer cannot force an employee to do so. The remainder of the leave (10 weeks) is paid leave, paid at two-thirds of the employee's regular rate for the typical number of hours the employee would normally be scheduled to work. The pay is capped at no more than $200/day ($10,000 aggregate per employee). For employees who work part-time or inconsistent schedules, their paid leave should be determine based on the average number of hours worked per week for the six months prior to the leave. If an employee has worked less than six months, the employee is entitled to what was his/her reasonable expectation with regard to weekly work hours upon hiring.
Generally speaking, leave taken under this provision is job-protected (employee must be returned to same or similar position upon returning for leave). However, for employers with less than 25 employees, subject to certain conditions, if a position no longer exists as a result of changes made due to a public health emergency (i.e., business slowdown due to COVID-19), the job protection provision may not apply. In addition, the Act also permits the Secretary of Labor to exempt health care providers and first responders and small businesses (those with less than 50 employees) if the leave would threaten the viability of the business as a going concern. Finally, the Act excludes employers with less than 50 employees in a 75-mile radius from civil damages under the FMLA if an employee initiates a lawsuit.
All of these provisions have a December 31, 2020 sunset date.
Tax Credits
Under the Act, employers who are required to provide paid sick leave and emergency leave under the FMLA will be entitled to a tax credit against the employers' payroll tax.
This article provides an overview and summary of the matters described therein. It is not intended to be and should not be construed as legal advice on the particular subject.