New York, N.Y. (March 20, 2020) - The Families First Coronavirus Response Act was approved by the U.S. Senate and signed by President Trump on March 18, 2020 (the Act). The Act requires that covered employers grant up to 12 weeks of emergency family medical leave and 80 hours of sick leave to employees impacted by the coronavirus. A substantial portion of the leave is paid, and extends to employees with children whose schools or day care providers have been closed due to a corona-virus related public health emergency. We will first discuss how the final bill differs from the version passed by the House of Representatives, and then recap what the law provides.
The Key Changes in the Final Version of the Act
We previously reported on the version of the Act passed by the House on March 13, 2020. The final version of the Act includes revisions that, among other things:
- Limit Emergency Family and Medical Leave Expansion Act (EFMLEA) leave to circumstances in which the employee is needed to care for a child whose school or place of care has been closed due to a public health emergency;
- Cap EFMLEA payments to employees are capped at $200 per day and $10,000 in the aggregate;
- Cap Emergency Paid Sick Leave Act (EPSLA) pay at $511 per day and $5,110 in the aggregate for employees who have been quarantined and employees who have symptoms of COVID– 19 and are seeking a medical diagnosis;
- Cap Emergency Sick Leave pay at $200 per day and $2,000 in the aggregate for an employee who is caring for a quarantined family member, caring for a son or daughter whose school or daycare has been closed or is experiencing a condition that is “substantially similar” to COVID-19 as specified by the Secretary of Health; and
- Allow employers to exclude employees who are healthcare providers or emergency responders from coverage under the EFMLEA or the EPSLA.
The Act continues to provide tax credits, in the amount of 100 percent of the pay required by the EFMLEA and EPSLA, that employers may take against their payroll taxes.
The Act becomes effective on April 1, 2020.
Emergency Family and Medical Leave Expansion Act
The EFMLEA requires that employers grant Family and Medical Leave Act (FMLA) leave to employees who require leave “because of a qualifying need related to a public health emergency.” The EFMLEA, however, drastically redefines many of these familiar terms.
How is EFMLEA leave different from FMLA leave?
The FMLA provides for 12 weeks of unpaid leave. Under the EFMLEA, however, leave is unpaid only for the first 14 days. For the remainder of the 12 weeks, the employee must be paid at a rate that is “not less than two-thirds of an employee’s regular rate of pay” and, in most cases, for the number of hours the employee would otherwise be normally scheduled to work.
The final version of the law contains a “clarification” stating that payments under the EFMLEA are capped at $200 per day and $10,000 in the aggregate.
Who is covered?
As in the version of the bill passed by the House, the EFMLEA covers only employers with “fewer than 500 employees.” The EFMLEA extends coverage to any employee of a covered employer who has been employed for 30 or more calendar days prior to the date from which leave is being requested.
The final bill provides that an “employer of an employee who is a healthcare provider or an emergency responder may elect to exclude such employee from” the leave requirements of the EFMLEA.
What circumstances create a basis for leave?
The final version of the Act provide that EFMLEA leave is available to an eligible employee who is unable to work or telework because the employee is needed to care for a child (under 18 years of age) whose school or place of care has been closed, or the child care provider of the employee’s child is unavailable, due to a public health emergency.
Unlike the version approved by the House of Representatives, the EFMLEA as enacted does not extend leave to circumstances in which (i) a public official recommends or orders that the employee’s presence in the workplace would jeopardize the health of others because the employee was exposed to or exhibited symptoms of the coronavirus; or (ii) an employee is caring for a family member who is the subject of such an order.
Does the EFMLEA apply differently to employers with fewer than 25 employees?
The EFMLEA states that, after an employee takes EFMLEA leave, an employer with fewer than 25 employees is not required to return the employee to his or her original position if: (i) the position does not exist due to changes in the employer’s economic or operating condition that affect employment and were caused by a public health emergency; (ii) the employer makes “reasonable efforts” to restore the employee to an equivalent position; and (iii) if these efforts fail, the employer makes an additional reasonable effort to contact the employee if an equivalent position becomes available for a period of one year.
The Secretary of Labor may issue regulations that exempt businesses with less than 50 employees from the requirements of the EFMLEA “when the imposition of such requirements would jeopardize the viability of the business as a going concern.”
Finally, the EFMLEA provides that section 107 of the FMLA, which allows employees to file private lawsuits against their employers for violations of the FMLA, does not apply to employers with fewer than 25 employees who fail to comply with the leave requirements of the EFMLEA.
How does EFMLEA leave interact with other forms of leave?
The EFMLEA continues to provide that only the employee can elect to substitute any accrued vacation, personal, medical or sick leave for EFMLEA leave. The employer may not require an employee to substitute any other leave for EFMLEA leave.
How are rights under the EFMLEA communicated to employees?
The EFMLEA does not contain an express notice provision. However, it appears that the notice provisions of the FMLA require employers to provide notice of EFMLEA rights.
The Emergency Paid Sick Leave Act
The EPSLA provides for 80 hours of paid sick leave for reasons similar to those described in the EFMLEA. Part-time employees will be entitled paid sick leave in an amount equal to the average number of hours worked, on average, over a 2-week period.
Like the EFMLEA, the EPSLA applies to employers with fewer than 500 employees. An employer of an employee who is a healthcare provider or an emergency responder may choose to exclude that employee from the application of the EPSLA.
Unlike the EFMLEA, the grounds for taking paid sick leave under the EPSLA were not scaled back in the final version of the legislation. Emergency sick leave is available when:
- 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 healthcare 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 has been ordered to isolation, or advised by a healthcare provider to self-quarantine; or
- the employee is caring for a son or daughter because the school or place of care of the son or daughter has been closed due to COVID–19 precautions.
Furthermore, the EPSLA now provides that an employee can take Emergency Sick Leave if the employee is experiencing “any other substantially similar condition specified by the Secretary of Health and Human Services”.
When an employee takes Emergency Sick Leave due to the employee’s own healthcondition, the leave is paid at the employee’s regular rate or the minimum wage (which ever higher). If the employee takes leave (i) to care for another individual, (ii) due to the closing of the school or place of care of a child or (iii) because of condition determined to be “substantially similar”, that leave is paid at two-thirds of the regular or minimum wage rate.
The EPSLA continues to require employers to provide an additional 80 hours of paid leave, regardless of their preexisting policies. The EPSLA states that “the employer may not change such paid leave on or after” the date the EPSLA is enacted to avoid providing additional leave.
An employee may first use Emergency Sick Leave before the employee uses other accrued paid sick time, and an employee cannot require the employee to use other paid sick time first. Employers are not required to permit employees to carry over Unused Emergency Sick Leave from one year to the next and employers are not required to pay Sick Leave out at the end of an individual's employment.
In addition, employers are required to post a notice informing employees of their rights to Emergency Sick Leave.
Tax Credits for Paid Sick and Paid Family and Medical Leave
Payroll tax relief remains available for employers who make wage payments pursuant to the Emergency Family and Medical Leave Expansion Act or the Emergency Paid Sick Leave Act. Through a payroll tax credit, employers will be reimbursed for the full amount of their payments to employees within three months.
Because the Emergency Family and Medical Leave Expansion Act and the Emergency Paid Sick Leave Act are effective on April 1, 2020, and many employees are already in the midst of school and daycare closings that trigger the requirements of the Act, employers must quickly gear up to implement and communicate new policies that comply with these laws. Please contact your Lewis Brisbois counsel or members of the firm’s COVID-19 Response Team to discuss how we may provide assistance in this challenging time.
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