Wednesday afternoon, the Senate passed the Families First Coronavirus Response Act, and President Trump signed it into law. The act contains several provisions that will significantly impact employers with fewer than 500 employees.
If this applies to you, your obligations become effective no later than April 2, 2020 – 15 days from the date of enactment – and will automatically expire on December 31, 2020. Within seven days (by March 25, 2020), you are required to post a notice informing your employees of their rights under this new law.
Obviously, no one has a crystal ball on how all of this will play out. What we can tell you is what the law says.
Here is a summary of select provisions of the bill that entitles qualified employees to job-protected paid sick leave and extended leave to care for children.
Family & Medical Leave Act Expansion
- Employers with fewer than 500 employees will provide 12 weeks of potentially job-protected (see exception below) paid FMLA leave. The first 10 days may be paid by other relief (see below).
- You do not have to provide this leave for healthcare providers (as that term is defined by the FMLA) or emergency responders.
- During the first 10 days of this leave, your employees may use accrued personal or sick leave (including Emergency Paid Sick Leave under the new regulation outlined below), but you cannot require employees to do so.
- To qualify for this expanded leave benefit, an employee must have been working for at least 30 calendar days. There is no minimum number of hours worked required.
- This leave applies only for employees to care for a child whose school or daycare has been closed, or whose childcare provider is not available, as a result of the COVID-19 pandemic.
- Leave is not available if employees are able to telework, but whether an employee is “able” to do so will undoubtedly be subject to debate (i.e., if the employer provides remote work capabilities but the employee’s children are at home).
- The first 10 days are generally unpaid (but see the Emergency Paid Sick Leave requirement of 10 days of paid sick leave below).
- After the first 10 days, you must compensate employees in an amount that is not less than two-thirds of the employee’s regular rate of pay for the remaining time of protected leave.
- These pay requirements apply to only the COVID-19-related leave reasons listed above.
- Employees are entitled to pay not to exceed two-thirds of the employee’s regular pay rate, not to exceed $200 per day or $10,000 total.
- The U.S. Secretary of Labor may develop regulations to exempt small businesses (fewer than 50 employees) when the imposition of the new requirements would jeopardize the business as a going concern. Note that the normal FMLA exemption of employees who work at a site with fewer than 50 employees within a 75-mile radius does not apply here.
Restoration to Position
- Employers with 25 or more employees must generally return employees to the same or substantially equivalent position under existing FMLA rules.
- Employers with fewer than 25 employees are not required to return the employee to work if:
- The position held by the employee when the leave commenced does not exist due to economic conditions or other changes in operating conditions that affect employment and are caused by a public health emergency during the period of leave.
- You (the employer) make a reasonable effort to restore the employee to a position equivalent to the position the employee held when leave commenced with equivalent benefits, pay and other terms and conditions of employment.
- If your reasonable efforts fail, you make reasonable efforts to contact the employee if an equivalent position described above becomes available. This “contact period” remains in effect for 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 on which the employee’s leave commences.
- The provisions are expected to go into effect on April 2, 2020, and they will expire on December 31, 2020.
Emergency Paid Sick Leave
- Employers with fewer than 500 employees and government employers will be required to provide full-time employees with 10 days (80 hours) of paid sick leave for specific circumstances related to COVID-19, including:
- Responding to quarantine requirements or recommendations;
- Experiencing COVID-19 symptoms and seeking medical diagnosis;
- Caring for family members who are responding to quarantine requirements or recommendations; and
- Caring for children whose school or daycare is closed, or whose childcare provider is not otherwise available, due to COVID-19.
- Part-time employees get paid sick leave equal to the number of hours they work, on a daily average, over the last six months (or if they have not been employed that long, based on the number of hours they would have reasonably expected to work).
- Immediate use: Paid sick time is available for immediate use regardless of length of employment.
- Rate of pay:
- For absences related to the employee’s own condition, sick pay is the greater of the employee’s regular rate of pay or the applicable minimum wage, not to exceed $511 per day or $5,110 total.
- For absences to care for others, sick pay is the greater of two-thirds of the employee’s regular rate or the applicable minimum wage, not to exceed $200 per day or $2,000 total.
- You (employers) must post a notice informing employees of their rights to leave. The DOL will be creating a required posting.
- The law expressly provides that it does not preempt existing state or local paid sick leave entitlements. Also, this paid sick time is in addition to time available under an employer’s existing policies.
- The provisions will go into effect on April 2, 2020, and will expire on December 31, 2020.
- A violation of the law is a minimum wage violation under the FLSA.
Collective Bargaining Agreements
- Employers with employees subject to collective bargaining agreements may be able to fulfill their obligations to fund paid sick leave by contributing to an applicable multi-employer fund, so long as the employees subject to the agreement are able to secure pay from the fund consistent with hours worked under the collective bargaining agreement.
Employer Tax Credit
- You will receive a refundable tax credit against your share of Social Security taxes equal to 100% of qualified paid sick leave wages paid for each calendar quarter under the Emergency Paid Sick Leave Act or the FMLA Expansion.
We will continue to provide guidance and updates on the status of these emergency measures as they rapidly evolve over the coming weeks.ages paid for each calendar quarter under the Emergency Paid Sick Leave Act or the FMLA Expansion.
It is important to note the proposed bill is not the final word on whether, when or how laws may change or how an employer’s obligations under these new regulations might change. There may be significant revisions to the current version of the bill or new regulations altogether, including new tax provisions, additional response measures, or new industry-specific relief provisions issued over the next several weeks.
We will continue to provide guidance and updates on the status of these emergency measures as they rapidly evolve over the coming weeks.