On March 18, 2020 President Trump signed the Families First Coronavirus Act (“Act”), which expands the Family Medical Leave Act (“FMLA”), provides emergency unemployment insurance, emergency paid sick leave and tax credits to employers for paid FMLA leave and paid sick leave. The legislation is to be effective not more than 15 days after it is signed (which would be April 3). Set forth below is our preliminary analysis of the paid leave provisions so that you can consider this legislation in your decision making relating to employee leaves due to the coronavirus.
Emergency FMLA Leave. Employers with 500 or fewer employees are required to provide employees, who have been employed for at least 30 calendar days, with up to 12 weeks of job-protected leave (for employers with 25 or more employees) if 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 (as defined to cover the coronavirus). While the first 10 days of leave under such circumstances is unpaid unless the employee elects the employer’s available paid time off, thereafter a full-time employee must be paid an amount that is not less than two-thirds of an employee’s regular rate of pay with a cap of $200 per day and $10,000 in the aggregate. Adjustments are made for part-time employees based on the employees average number of hours worked during the six months (or two weeks if the employee worked less than six months) prior to taking emergency FMLA leave.
Paid Sick Leave. Employers are required to provide all employees with up to 80 hours of emergency paid sick time at the employee’s regular rate (subject to caps described below) for full-time employees and up to the average number of hours worked during a two week period for part-time employees. An employer shall provide to each employee employed by the employer paid sick time to the extent that the employee is unable to work (or telework) due to a need for leave 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 seeking a medical diagnosis.
(4) The employee is caring for an individual who is subject to an order as described in subparagraph (1) or has been advised as described in paragraph (2).
(5) The employee is caring for a son or daughter of such employee if the school or place of care of the son or daughter has been closed, or the child care provider of such son or daughter is unavailable, due to COVID–19 precautions.
(6) The employee is experiencing any other substantially similar condition specified by the Secretary of Health and Human Services in consultation with the Secretary of the Treasury and the Secretary of Labor.
This sick leave pay can be substituted for the 10 days of unpaid Emergency FMLA described above. The pay rate for this leave is capped at $511 per day and $5,110 in the aggregate for employees taking leave generally described in (1)-(3), above and two-thirds of the employee’s pay at a cap of $200 per day and $2,000 in total for leave generally described in (4)-(6), above. An employer may not require an employee to use other paid leave provided by the employer to the employee before the employee uses the paid sick time and the legislation contains anti-retaliation provisions for use of sick pay or complaining about a violation.
General comments. Both of these leave programs currently expire December 31, 2020. The Secretary of Labor shall have the authority to issue regulations for good cause to exclude certain health care providers and emergency responders from the definition of eligible employee and to exempt small businesses with fewer than 50 employees from the requirements if they would jeopardize the viability of the business as a going concern. Although not entirely clear it appears that employers that provide sick leave covering these absences may be able to use that leave to comply. We have not yet fully analyzed the tax credit provisions, but the legislation seems to provide for refundable tax credits equal to the qualified wages paid pursuant to these leave programs and against the employer portion of Social Security taxes.
As always, this is a preliminary analysis for informational purposes only. It does not constitute legal advice regarding any particular situation and should not be relied on as such. Please contact one of our labor and employment lawyers if you have any questions or if you would like assistance applying this legislation to a particular situation.
This update was prepared by Charles S. Elbert.