In response to work stoppages and slowdowns related to the coronavirus, the United States Congress is requiring small employers to provide employees with paid leave – potentially up to 12 weeks. On March 14, 2020, the House of Representatives passed House Resolution 6201, the “Families First Coronavirus Response Act.” After extensive criticism, the House implemented “technical corrections” to the Act on March 16, 2020. Today (March 18, 2020), the United States Senate approved the House’s legislation, unchanged. The provisions of the Act were negotiated between Treasury Secretary Steven Mnuchin and Speaker of the House Nancy Pelosi. President Trump has tweeted his support for the Act and is expected to sign it.
The Act will become effective 15 days after it is enacted. Therefore, employers need to get ready for the following requirements.
I. Emergency Family and Medical Leave Expansion Act
The first provision of the Act is called the Emergency Family and Medical Leave Expansion Act. It expands the Family and Medical Leave Act and makes crucial changes to the ordinary framework of the FMLA. The Emergency FMLA is detailed, but the following are the most important requirements:
Eligible employees. Under the “traditional” FMLA, an employee must work for a year and at least 1,250 hours to obtain unpaid leave. Under the Emergency FMLA, an employee only has to work 30 days to be eligible for paid leave.
Covered employers. Under the “traditional” FMLA, all employers with 50 or more employees must provide unpaid leave. Under the Emergency FMLA, all employers with fewer than 500 employers must provide paid leave.
Qualifying need for leave. An employee is only entitled to paid leave if they have a “qualifying need” for leave, which means “the employee is unable to work (or telework) due to a need for leave to care for the son or daughter under 18 years of age of such employee if the school or place of care has been closed, or the child care provider of such son or daughter is unavailable due to a public health emergency.” This is a substantial change from the original version passed by the House on March 14 – which was much more expansive.
Amounts of paid and unpaid leave. The first period of leave required by the Emergency FMLA is a 10-day period of unpaid leave. During that time, the employee can substitute vacation, personal or sick leave, but the employer cannot require the employee to do so. After 10 days, the employer is required to provide 10 weeks of paid leave, paid at two-thirds (2/3) of the employee’s regular rate of pay. The revised Act limits the dollar amount of paid leave to $200 per day and $10,00 in the aggregate.
Exception for smaller employers. The Act authorizes the Secretary of Labor to enact regulations exempting employers with fewer than 50 employees if the leave would jeopardize the viability of their business as a going concern.
Job restoration after leave. Generally, employers must restore employees to their prior positions after the expiration of their need for leave. There is an exception for employers with fewer than 25 employees if the employee’s position no longer exists due to operational changes occasioned by a public health emergency (i.e., downturn in business).
II. Emergency Paid Sick Leave Act
In addition to the Emergency FMLA, the new Act also contains the Emergency Paid Sick Leave Act, which implements the following additional requirements.
Eligible employees. There is no 30-day payroll requirement. All employees are immediately eligible for this leave.
Covered employers. Any employee with fewer than 500 employees must provide Emergency Paid Sick Leave.
Qualifying need for leave. Unlike the Emergency FMLA, there are numerous qualifying reasons for leave. The employee must be unable to work (or telework) because:
(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 health care provider to self-quarantine due to concerns related to COVID-19;
(3) the employee is experiencing symptoms of COVID-19 and is seeking a medical diagnosis;
(4) the employee is caring for an individual who is subject to quarantine or isolation order, or who has been advised to self-quarantine due to COVID-19;
(5) the employee is caring for a son or daughter whose school or place of care is closed, or the child care provider is unavailable, due to COVID-19 precautions; or
(6) the employee is experiencing substantially similar conditions as specified by the Secretary of Health and Human Services, in consultation with the Secretaries of Labor and Treasury.
Amounts of paid and unpaid leave. Full-time employees are entitled to 80 hours (two weeks) of paid sick leave. Part-time employees are entitled to leave equaling the number of hours the employee works, on average, over a 2-week period. The rate of pay for paid sick leave is the employee’s regular rate of pay unless the employee takes leave for reasons (4), (5) or (6). Then, the rate is two-thirds (2/3) of the regular rate.
There are two different monetary limits. If an employee takes leave for reasons (1), (2) or (3) above (i.e., quarantine or symptoms while seeking diagnosis) leave is limited to $511 per day and $5,110 in the aggregate. If an employee takes leave for reasons (4), (5), or (6) (care for others or school closure), leave is limited to $200 per day and $2,000 in the aggregate.
Exceptions. The Secretary of Labor is authorized to draft regulations: (1) excluding certain health care providers and emergency responders; (2) exempting businesses with fewer than 50 employees where imposition of the paid leave requirements would jeopardize the viability of the business as a going concern; and, (3) ensuring consistency with paid family leave, paid sick leave and tax credit requirements.
Limitations on employers. The Emergency Paid Sick Leave Act does not expressly require restoration to the same job, but it does prohibit discharge, discipline or discrimination against employees who request paid leave. The Act also prevents employers from requiring employees to find a replacement or using accrued PTO or sick leave instead of the Emergency Paid Sick Leave.
III. Tax Credit
The Act includes refundable tax credits for employers who are required to provide Emergency FMLA or Emergency Paid Sick Leave. Obviously, those credits are only awarded to covered employers and not to larger employers who gratuitously offer such leave.