Congress Passes Families First Coronavirus Response Act – Mandates Paid Sick Leave

As the country reels from the coronavirus pandemic, the economic impact on businesses and employees has become painfully evident.   Whether due to personal or family illness with the virus, self-isolation, school or business closures, or a downturn in business, employees are expected to be facing extended absences from the workplace.   Many employees, especially hourly workers, may not have available paid time off or the economic cushion to weather the loss of income during the absence. Employers may not have the financial wherewithal to pay employees during these absences. In anticipation of these and other  dire economic consequences brought on by the virus, the U.S. House of Representatives passed the Emergency Paid Leave Act with the support of the President. On March 16, 2020 the House substantially revised the bill to significantly narrow the relief available to employees under the original version.  The Senate passed the bill two days later and it is now headed to the President for his signature.  The Families First Coronavirus Response Act will provide economic relief to employees affected by coronavirus-related absences.

The Act will apply to employers with 500 or less employees.   Larger employers are not covered. Administration and Senate leaders have commented that these larger employers typically provide sick leave benefits to their employees,  but many may not provide for two weeks of leave. If not, these employees may be unprotected. Employers with less than 50 employees can apply for an exemption through the Department of Labor if it would “jeopardize the viability of the business”, a vague standard that has yet to be defined.

We have outlined below key provisions of the Act that we hope will assist employers in making difficult staffing decisions going forward.

Public Health Emergency Paid Sick Leave Benefits:  In the event of a declared public health emergency, all employers must provide employees with additional paid sick leave benefits (beyond what employees may have accrued under state earned sick leave statutes or company policies) , as described below.

• Using Paid Sick Leave: Paid sick leave is immediately available to all employees who are unable to work or telecommute for the following reasons related to the public health emergency:
  • the employee is subject to a coronavirus quarantine or isolation order, or is caring for another individual subject to such order
  • the employee has been advised by a health care provider to self-quarantine because of the virus
  • the employee has symptoms of the virus and is seeking a medical diagnosis
  • to care for the employee’s child in the event of a school or place of childcare closure, including circumstances where education continues to be provided remotely.
• Amount of Paid Sick Leave Benefits: 10 days/80 hours of paid sick leave at 100% of the employee’s regular salary, with a cap of $511 per day (or $5,110 in the aggregate) if the employee’s own condition makes him/her unable to work.   When the employee takes leave to care for others or to care for child in the event of a school or place of childcare closing, the cap is $200 per day (or $2000 in the aggregate).
• Interplay with Statutory and Private Paid Time Off Benefits:  After the employee has used the 10 days of Emergency Paid Sick Leave Benefits, employees may then elect to use or retain any other accrued sick time for the balance of the emergency.  Employers may not require employees to use any statutory or company provided paid time off benefits during the 10-day period that the employee is using Emergency Paid Sick Leave benefits.
• Exclusion of Health Care Workers and Emergency Responders: The Secretary of Labor is permitted to exclude these workers from the definition of those employees eligible for emergency sick leave benefits.  In addition, employers are permitted to deny paid sick benefits to these employees.
• Expiration of Emergency Paid Sick Leave Benefits:  If passed, these enhanced sick leave rights will go into effect 15 days after enactment and expire on December 31, 2020.

Amendments to the Family and Medical Leave Act (FMLA) to Include Public Health Emergency Leave:  Currently under the FMLA, employers must provide employees with up to 12 weeks of unpaid leave to care for a newborn child, or care for oneself or a family member in the event of illness.  The bill temporarily expands FMLA protection to include  a public health emergency due to Coronavirus issues.

• Expanded Public Health Emergency Leave:  Beginning with the passage of the Emergency Paid Leave Act, a qualifying FMLA event shall include the inability of the employee to work or telework due to the need to care for the child during a school closure or place of child care, or the unavailability of a child care provider, due to a public health emergency.
• Employee Eligibility for Public Health Emergency Leave:
  • Unlike tradition FMLA eligibility requirements that require 12 months of service and 1250 hours worked, the employee is eligible for Public Health Emergency Leave after 30 days of service
  • Unlike traditional FMLA which applied to employer of 50 or more employees, public Health Emergency Leave rights will be available to all employees, regardless of the employer’s size
• Payment During Leave:
  • The initial 10 days of leave can be unpaid.  Employees may elect to substitute any accrued paid time off benefits during the Public Health Emergency Leave, but employers may not require substitution.
  • The remainder of the FMLA Public Health Emergency Leave must be paid at two-thirds of the employee’s regular rate, with a cap of $200 per day and $10,000 in the aggregate
• Job Security: As with traditional FMLA, employees exercising their Public Health Emergency Leave rights are protected from any form of retaliation and must be returned to the same or a comparable position.   However, the job security provisions of traditional FMLA leave will not apply to employers with fewer than 25 employees if:
  • The employee takes Public Health Emergency Leave.
  • The position held at the start of the leave no longer exists due to economic conditions  or other changes in operations that affect employment and are caused by the public health crisis.
  • The employer makes reasonable efforts to restore the employee to an equivalent position for a one-year period beginning on the earlier of i) the date the public health emergency is ends OR ii) 12 weeks after the leave commenced.
• Exclusion of Health Care Workers and Emergency Responders: The Secretary of Labor is permitted to exclude these workers from the definition of those employees permitted to invoke FMLA Public Health Emergency Leave.   In addition, employers are permitted to exclude these workers from this leave entitlement.
• Small Employer Exemption: Although not entirely clear in the text of the current bill, employers with fewer than 50 employees in a 75-mile radius appear to be exempted from the Public Health Emergency Leave Requirement.
• Expiration of Public Health Emergency Leave:  If passed, these enhanced FMLA rights will go into effect 15 days after enactment and expire on December 31, 2020.

Employer Tax Credits: To alleviate the economic impact upon employers who are mandated to provide these relief measure, the current version of the bill provides for refundable tax credits for employers.