R.S. “Rob” Ghio – Of Counsel

On March 18, 2020, the U.S. Senate passed the Families First Coronavirus Response Act, which had passed the House on March 13. President Trump signed the Act into law the evening of March 18, which puts the effective date at April 2.

We wanted to provide information as quickly as possible regarding this new Act and to answer key questions for employers. This is not a comprehensive discussion of the Act, and you should direct specific questions to an attorney.

There are three provisions that are of particular interest to employers. First, there is the Emergency Family and Medical Leave Expansion Act. Second, there is the Emergency Paid Sick Leave Act. Finally, there is a provision that provides employers with tax credits for payments made under the other two provisions.

Expansion of Medical Leave

Which employers are affected?

The Act applies to employers with fewer than 500 employees.

Medical providers and emergency responders are not covered.

There is a provision in the Act by which the DOL can exempt employers with less than 50 employees, but that will require implementing regulations. At present, you are affected if you employ 1-499 employees.

Which employees qualify?

Employees must have been with the employer for 30 days (there is no specific guidance on how that is to be calculated).

Employees must request “qualifying leave related to a public health emergency.” This means that the employee is unable to work or telework due to the need to care for a child under 18 years of age if their school is closed, or the childcare provider is unavailable, due to COVID-19.

How long is the leave?

The leave may be for the full 12 weeks generally available under the FMLA.

What portion of the leave is paid?

The first two weeks (10 working days) are unpaid. During that time, employees may elect to use any accrued PTO. But unlike other FMLA leave, they cannot be required to do so.

The next ten weeks are paid, but with certain limits, described below.

How is pay calculated?

Qualifying employees must be paid a minimum of 2/3 of their regular rate of pay for the number of hours that they are usually scheduled to work.

If the employee works a varying schedule, they are to be paid for the average number of hours worked over the last 6 months. (While it is not clearly stated, one assumes that this means either the last 6 months or during the time the individual has been employed, if less than 6 months).

Paid leave is capped at $200 per day and $10,000 in the aggregate.

Is the leave job-protected?

For employers with less than 25 employees, there is no job protection if the position previously held does not exist due to economic conditions or other changes in operating conditions of the employer. However, the employer must make reasonable efforts to restore the employee to an equivalent position.

For employers with more than 25 employees, the leave is job-protected just like any other FMLA leave.

Emergency Paid Sick Leave

Which employers are affected?

The Act applies to employers with fewer than 500 employees.

Medical providers and emergency responders are not covered.

There is a provision in the Act by which the DOL can exempt employers with less than 50 employees, but that will require implementing regulations. At present, you are affected if you employ 1-499 employees.

Which employees qualify?

Employees must be paid sick time if they:

1. Are subject to Federal, state or local quarantine;

2. Have been advised by a health care provider to self-quarantine;

3. Are experiencing symptoms of COVID-19 and are seeking a medical diagnosis;

4. Are caring for an individual under (1) or (2);

5. Are caring for a son or daughter because their school is closed or the childcare provider is unavailable; or

6. They are in a substantially similar condition as determined by the Department of Health and Human Services, the Department of the Treasury, or the Department of Labor.

How long is the leave?

For full-time employees, the maximum leave is eighty (80) hours.

For part-time employees, the maximum leave is the average number of hours worked in the last six months times 10 days.

How is the leave paid?

Leave must be paid at the regular rate of pay for reasons (1)-(3). It is to be paid at 2/3 the regular rate of pay for reasons (4)-(6).

Sick leave for reasons (1)-(3) above is capped at $511 per day and $5110 in the aggregate.

Sick leave for reasons (4)-(6) is capped at $200 a day and $2000 in the aggregate.

May employers require employees to use existing paid sick leave first?

No. This means that the benefits under the Act are in addition to any existing paid leave.

May employers require employees to find coverage for their shifts?

No. The burden is on the employer to find coverage for the lost time.

Other Important Provisions

Non-retaliation

Employees are protected from discrimination or retaliation resulting from them exercising their rights to Emergency FMLA or Emergency Sick Leave.

Tax credit

You should discuss with your accountant or tax advisor the tax credit provisions of the Act, which generally provide dollar-for-dollar tax credits for paid Emergency FMLA and Emergency Sick Leave. There is also a provision in the law which appears to exempt payments under the Act from the definition of “wages” or “compensation” for the purpose of payroll taxes.

Again, this new Act is literally “hot off the presses,” and doubtless there will be implementing guidance to come from the Department of Labor. In the meantime, this Alert should provide you with the preliminary guidance you need.

If you have questions or need assistance implementing these changes, please feel free to call me at 817-857-4933.

Please be safe during these challenging times.