Federal “Families First Coronavirus Response Act” Signed into Law: What Does it Mean for Employers?

By: Christian P. Jones

After a few days of negotiation, the federal “Families First Coronavirus Response Act” (Act) passed the Senate and was signed into law by President Trump late Wednesday.  Of particular importance to employers are provisions related to paid sick leave and paid Family Medical Leave Act (FMLA) leave.  Both provisions will become effective not later than 15 days after enactment and will remain in effect until December 31, 2020.  Set forth below are some of the key aspects of these provisions.

Which Employers are Covered?

Both the paid FMLA and paid sick leave provisions apply only to private employers with fewer than 500 employees, as well as most public employers.  The 500-employee requirement is company-wide, not location specific.

Both provisions permit an employer of an employee who is a healthcare provider or an emergency responder to elect to exclude the employee from the application of these two provisions.

In addition, they both allow subsequent U.S. Department of Labor regulations to exempt small businesses with fewer than 50 employees when the provision would jeopardize the viability of the business as a going concern.

Emergency Paid Sick Leave

Covered employers must make available 80 hours of paid sick leave for full-time employees (or the equivalent of the average number of hours over two weeks for part-time employees) for the following reasons:

  1. The employee is subject to a federal, state, or local quarantine or isolation order related to COVID-19.
  2. The employee has been advised by a healthcare provider to self-quarantine due to concerns related to COVID-19.
  3. The employee is experiencing symptoms of COVID-19 and seeking a medical diagnosis.
  4. 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).
  5. The employee is caring for their son or daughter if the school or place of care of the son or daughter has been closed, or the childcare provider of the son or daughter is unavailable, due to COVID-19 precautions.
  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.

There is no accrual or waiting period for an employee to be eligible for paid sick leave under the Act.  The paid sick leave requirements apply to all employees of covered employers.

Paid sick leave is paid at the employee’s regular rate, but it is capped at $511 per day and $5,110 in the aggregate per employee for a use described in paragraph (1), (2), or (3) and $200 per day and $2,000 in the aggregate per employee for a use described in paragraph (4), (5), or (6).

While the enacted bill removed language from an earlier version which made the 10 paid sick days additional to any paid time already provided by the employer, the final version of the law still provides that “[a]n employer may not require an employee to use other paid leave provided by the employer to the employee before the employee uses the paid sick time under [the Act].”

Emergency Family and Medical Leave Expansion Act

Any individual employed by the employer for at least 30 days before the first day of leave may take up to 12 weeks of job-protected leave due to a need to care for the employee’s child under 18 years of age if the child’s elementary or secondary school or place of care has been closed, or the childcare provider is unavailable due to a “public health emergency.” A public health emergency means an emergency with respect to COVID-19 declared by a federal, state, or local authority.

Closure of the child’s school or childcare is the only reason allowed for leave under the new FMLA provision.

Under these new FMLA provisions, when qualifying leave is needed, the employer can provide the first 10 days of leave unpaid.  During this10-day period, an employee may elect to substitute any accrued vacation leave, personal leave, or medical/sick leave for the unpaid leave.  An employer cannot, however, require an employee to use such paid leave. After the 10-day period, employees absent for this reason must be paid at 2/3 the employee’s regular rate of pay. The new Act includes a cap of $200 per day and $10,000 in aggregate per employee.

Much like the traditional FMLA, employers must make reasonable efforts to restore the employee to the same or an equivalent position.  Under the new provision, if the reasonable efforts fail, the employer must make efforts to contact the employee and reinstate the employee if an equivalent position becomes available within 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.

Notably, however, the job restoration provisions do not apply to an employer with fewer than 25 employees if the employee’s position no longer exists due to economic conditions or other changes in the employer’s operations that affect employment and are caused by the public health crisis during the period of leave.

Tax Credits for Paid Sick and Paid Family and Medical Leave

Covered employers will be able to utilize payroll tax credits to cover the cost of wages paid to employees under the emergency FMLA leave and emergency paid sick leave programs.

Employers should also be aware that New York State has its own newly enacted COVID-19 laws providing for paid leave during certain periods of mandatory or recommended quarantine (post coming soon!).  Mackenzie Hughes will continue to keep you apprised of developments as warranted.