On March 18, 2020, Congress passed H.R. 6201: Families First Coronavirus Response Act-a relief package that, among other things, contains several provisions affecting employers. President Trump signed the bill later that same evening, which enacted it into law effective April 2, 2020. Below is a summary of the key employment-related aspects of the Act.
1. Emergency Family and Medical Leave Expansion Act
The Act provides employees of:
Private sector employers with fewer than 500 employees; or
Public agencies (regardless of the employee threshold)
with the right to take up to 12 weeks of job-protected leave under the Family and Medical Leave Act ("FMLA") for COVID-19 related matters as set forth below.
The Act provides that the first ten days of leave can be unpaid but requires that the remainder of the 12 weeks of FMLA leave be paid at a rate of no less than two-thirds of the employee's usual rate of pay. FMLA leave for all other purposes remains unpaid. The Act also provides a limit on this pay entitlement: $200 per day and $10,000 in aggregate per employee. Employees who work part-time or irregular hours are entitled to be paid based on the average number of hours the employee worked for the six months prior to taking Emergency FMLA. For employees who have worked less than six months, they are entitled to be paid based on the employee's reasonable expectation at hiring of their average number of hours.
To be eligible for paid leave, employees must have been:
On the employer's payroll for 30 days; and
Uses the emergency FMLA leave to care for an employee's child, under the age of 18, if the child's school or place of care has been closed, or the childcare provider is unavailable, due to the coronavirus.
Requests for FMLA leave for any other purpose should continue to be handled through normal FMLA procedures (i.e. up to 12 weeks of unpaid leave).
During the initial ten-day period of unpaid leave, the employee may choose to substitute accrued paid time off or other medical or sick leave during this period. After the first ten days of unpaid leave, employers must continue paid FMLA leave at a rate of no less than two-thirds of the employee's usual rate of pay.
As with traditional FMLA leave, this leave is job-protected, and an employer must return the employee to the same or equivalent position upon their return to work. While the Act outlines an exception for employers with less than 25 employees if the employee's job no longer exists due to the coronavirus pandemic, employers are still required to make reasonable efforts to restore the employee to an equivalent position over a one-year period beginning on the earlier of (a) the date on which the qualifying need related to a public health emergency concludes, or (b) the date that is 12 weeks after the date the employee's leave started.
The Act grants the Secretary of Labor the authority to issue regulations exempting: (1) certain health care providers and emergency responders from taking leave under the Act; and (2) small businesses with fewer than 50 employees from the requirements of the Act if it would jeopardize the viability of the business.
Please note that this amendment to the FMLA would expire on December 31, 2020.
2. Emergency Paid Sick Leave Act
The Act separately provides employees of:
Private entities employing fewer than 500 employees; and
Public agencies (or any other entity that is not a private entity or individual) which employ 1 or more employees
with the right of up to 80 hours of paid sick leave (or the equivalent of two weeks of hours for part-time employees) for use if an employee is unable to work (or telework) due to a need for leave because:
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 subject to an order as described in subparagraph (1) or has been advised as described in paragraph (2).
The employee is caring for a son or daughter of such employee if the school or place of care of the son or daughter has been closed, or the child care provider of such son or daughter is unavailable, due to COVID-19 precautions.
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.
Employers must compensate employees for any paid sick time they take at their regular rates of pay (unless the leave is taken pursuant to reasons 4, 5, and 6 above, in which case the employee is only entitled to two-thirds of his or her regular rate of pay). The sick leave is available for immediate use by employees, regardless of length of employment.
Additionally, part-time employees are entitled to the number of hours of paid sick time equal to the number of hours they work, on average, over a two-week period.
Wages pursuant to the Emergency Paid Sick Leave Act are capped at $511 per day up to $5,110 total per employee for their own use (see subparagraphs (1)-(3) above) and at $200 per day up to $2,000 total to care for others and any other substantially similar condition (see subparagraphs (4)-(6) above).
Notably, employers must provide the paid leave provided by the Act in addition to any paid leave already provided and cannot require employees to utilize other paid leave before using the paid leave provided by this bill.
Like the amendment to the FMLA, this aspect of the Act would also expire on December 31, 2020.
What happens if employees are unable to work solely due to business determinations or closures?
In other words, if it is a layoff or closure of the business, based on a literal reading of the Act, those employees would not be eligible for paid sick or FMLA leave. To qualify under the Act, employees must fall into one of the above leave situations. If an employer prohibits employees from physically reporting to work due to Coronavirus/COVID-19 concerns, and employees are unable to work remotely and do not otherwise fall within the leave reasons discussed above, it appears they would not be eligible for benefits under this Act. In such circumstances, leave will be governed by state or local statutory sources and the company's policies or collective bargaining agreements.
Who pays for the leave or sick time?
Employers must pay these benefits, however, there are provisions in the bill that provide tax credits to employers in certain circumstances and with certain caps.
Exclusions:
Under the Act employers, at their discretion, to exclude any employee "who is a health care provider or an emergency responder" from the benefits set forth in those Acts. The DOL is expected to issue regs to address the issue and (hopefully) add more clarity but each Act expressly affords employers of such employees the discretion regardless.
What's Next?
Once the bill is enacted, covered employers as described abovewill have to adhere to the above leave requirements within 15 days and they will be required to provide notice to their employees through postings and policies. In addition to this federal Act, many states are proposing similar emergency legislation to enact or expand their own paid sick leave or FMLA laws to cover COVID-19 related issues. These state laws, if enacted, would be in addition to these new federal requirements.
We will continue to monitor this situation as it continues to rapidly change and develop.