The Federal Government passed two emergency laws that may apply to your business. On March 14, 2020, the House of Representatives passed the Families First Coronavirus Response Act, as amended on March 16, 2020 (the “Act”). On March 18, 2020, the Senate passed the Act and President Trump signed it that day. The law is effective 15 days after enactment (April 2, 2020) through December 31, 2020.
We understand and appreciate this is a lot of information. As with all new laws, there will be questions regarding how to apply and enforce. Preovolos Lewin, ALC is ready to assist if you have any questions.
The following is the current guidance on the Act.
Summary – The Act Contains Two Emergency Laws Applicable to Small Businesses
- New Paid Sick Leave Act (80 Hours of Paid Sick Leave)
- Extension of the Family Medical Leave Act (Paid Leave for 10 Weeks)
The Act contains TWO EMERGENCY LAWS that may apply to your business.
The TWO EMERGENCY LAWS:
- go into effect Thursday, April 2, 2020 and runs through December 31, 2020.
- cover all private employers with fewer than 500 employees and all government employers.
The Secretary of Labor is authorized to issue regulations for good cause that:
- Exempt businesses with fewer than 50 employees may be exempt under the Act if providing it would jeopardize the viability of the business as a going concern. We will continue to monitor if the Secretary of Labor authorizes regulations exempting your business. Currently we do not have guidance.
- Exclude certain health care providers (as defined in the FMLA) and emergency responders from the definition of covered employee or allow their employers to opt out of the paid sick leave requirements.
NEW PAID SICK LEAVE RULES
As of April 2, 2020, Paid Sick Leave is available for immediate use, regardless of how long the individual has been employed by the employer. Therefore, all your employees are covered under the new Paid Sick Leave. Covered full-time employees are entitled to 80 hours of paid leave. Part-time employees are entitled to the average number of hours the employee works during a two-week period.
Sick Leave Used for Purposes Related to Coronavirus
Covered employees are entitled to paid leave for specified purposes related to coronavirus. Employers must provide Paid Sick Leave if the employee is unable to work or telework because the employee:
- Is under a federal, state, or local quarantine or isolation order related to COVID-19.
- Has been advised by a health care provider to self-quarantine because of COVID-19 concerns.
- Is experiencing COVID-19 symptoms and seeking a medical diagnosis.
- Is caring for an individual subject to a quarantine or isolation order or advised to self-quarantine because of COVID-19 concerns.
- Is caring for a son or daughter (as defined in the FMLA) where, due to COVID-19 precautions, the child’s: (a) school or place of care has been closed; or (b) child care provider is unavailable.
- 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.
Rate of Pay for Sick Leave
Leave is paid at the employee’s regular rate of pay, except that leave used to care for another is paid at two-thirds the employee’s regular rate of pay. Paid leave is capped at:
- $511 per day and $5,110 in total for the employee’s own health condition or quarantine.
- $200 per day and $2,000 in total for leave necessitated to care for another individual.
Employer Restrictions & Requirements
Employers cannot require that employees:
- Use other available paid or unpaid leave before allowing paid leave available under this emergency provision. Therefore, Paid Sick Leave under the Act would be in addition to any paid time off policy, vacation plan, and potentially California state-mandated paid sick leave. We will continue to monitor inconsistent application of the Paid Sick Leave with California law.
- Find a replacement to cover the employee’s hours or shift before allowing paid leave.
After the first use of leave, employers may require the employee to follow reasonable notice procedures in order to continue receiving paid sick time. Unused leave cannot be carried over to the following year.
The law expressly states that it does not diminish any employee rights under an existing law, employer policy, or CBA. While this suggests that employers with existing paid leave policies must provide leave under the emergency act in addition to leave already provided, explicit language to this effect was deleted from prior versions of the bill. Regulations issued before any effective date may help clarify this point.
- Employers must post a notice regarding employees’ rights under the emergency law (to be made available by the Secretary of Labor). The law prohibits retaliation against employees who use leave under the law or complain about violations of the law.
- Failure to comply with the emergency law constitutes a failure to pay minimum wages in violation of the FLSA.
EXTENSION OF THE FAMILY MEDICAL LEAVE ACT (“FMLA”)
The Emergency FMLA:
- expands coverage by including employees who have been employed by the employer for at least 30 days.
- expands coverage by including all businesses of under 500 employees.
- amends the FMLA to create a new category of protected leave for employees with a “qualifying need related to a public health emergency.” A qualifying need under this provision means the employee cannot work or telework due to the need to care for a son or daughter under 18 years of age if, because of a public health emergency regarding COVID-19, the child’s: (a) School or place of care has been closed, and (b) Child care provider is unavailable.
Under the Emergency FMLA, the first ten days of leave necessitated by a public health emergency related to COVID-19 is unpaid. An employee may elect to substitute accrued paid leave during that time period under the leave provisions of the FMLA (allowing an employer to require an employee to take unpaid leave).
Leave after the first ten days must be paid at a rate at least two-thirds the employee’s regular rate of pay based on the employee’s regular schedule. For each employee, paid leave cannot exceed:
- $200 per day.
- $10,000 in total.
Leave Amount and Usage
The total amount of available leave is therefore the same as under the FMLA (12 weeks in a 12-month period). Under the Emergency FMLA, the first two weeks are unpaid (see above) and the remaining ten weeks are paid leave.
Employees must provide notice to their employers as soon as practicable when the need for leave is foreseeable.
Employees returning from FMLA leave generally have the right to return to the same or an equivalent position. The Emergency FMLA contains an exception to the job restoration right for employers with fewer than 25 employees when their employees take public health emergency leave if all the following conditions are met:
- The employee’s position no longer exists because of economic or other operating conditions affecting employment and caused by a public health emergency.
- The employer makes reasonable efforts to return the employee to an equivalent position.
- If unable to return the employee to an equivalent position, the employer makes reasonable efforts to contact the employee about available equivalent positions for one year beginning on the earlier of: (a) the end of the employee’s qualifying need; or (b) 12 weeks after the employee’s leave began.
Employer Tax Credits
Private employers can claim a tax credit against the employer’s portion of Social Security taxes for 100% of the emergency Paid Sick Leave wages paid to employees, with per employee caps of:
- $511 per day when leave is taken for their own self-isolation, diagnosis, or care.
- $200 per day when leave is taken to care for a family member or because of a school closure or unavailability of child care provider.
Private employers can claim a tax credit against payroll taxes for the Emergency FMLA wages paid to employees such to the employee caps of:
- $200 per day.
- $10,000 in total.
Many employers are actively assessing whether their existing paid sick and leave benefits adequately support employee needs in this unprecedented public health crisis and adjusting benefits as appropriate for their business and potential coverage under the Act. Preovolos Lewin, ALC is ready to assist if you have any questions.