On March 18, 2020, President Trump signed into law H.R. 6201, the Families First Coronavirus Response Act. The main provisions of the Act that will have the greatest impact on employers will be in effect within 15 days (no later than April 2nd) and will remain in place through December 31st, 2020.
There are new requirements for Paid Sick Leave and expanded FMLA provisions. The paid sick leave requirements are in addition to those already in effect at the state or local level and the new FMLA provisions apply to almost all employers (not just those with 50 or more employees within 75 miles).
The highlights of the Act:
The Act Applies to companies with fewer than 500 employees.
There is no requirement for tenure of employment and the leave is a grant (not accrued) so the appropriate full amount is available immediately.
Full-time employees must be provided with 80 hours of paid sick leave and part-time employees are eligible for paid sick leave equivalent to the average number of hours they work over a two-week period.
The paid sick leave is for COVID-19-related issues. There are six designated justifications for an employee using the leave and they have differing pay requirements as indicated below:
• The employee is subject to a federal, state, or local quarantine or isolation order for Coronavirus – paid at the regular rate of pay capped at $511 per day and/or $5,110 in the aggregate;
• The employee is advised by a health care provider to self-quarantine due to Coronavirus concerns – paid at the regular rate of pay capped at $511 per day and/or $5,110 in the aggregate;
• The employee is experiencing symptoms of Coronavirus and seeking a medical diagnosis – paid at the regular rate of pay capped at $511 per day and/or $5,110 in the aggregate
• The employee is caring for an individual who is under a quarantine or isolation order or has been advised to self-quarantine – paid at 2/3 of the regular rate of pay and capped at $200 per day and/or $2,000 in the aggregate;
• The employee is caring for a child whose school or child care has been closed due to Coronavirus – paid at 2/3 of the regular rate of pay and capped at $200 per day and/or $2,000 in the aggregate;
The employee is experiencing any other substantially similar condition specified by the Secretary of Health and Human Services – paid at 2/3 of the regular rate of pay and capped at $200 per day and/or $2,000 in the aggregate.
For employees that do not have a set schedule, paid sick leave is based on the average number of hours the employee was scheduled per day over the six-month period prior to the use of the leave
Because the federal paid sick leave is in addition to other statutory paid sick leave, an employer cannot incorporate it into an existing PTO policy. The additional time off must be separate. Further, the employer cannot require an employee to exhaust other forms of paid sick or PTO before utilizing the new leave.
Guidelines for calculating the amount of sick leave pay are to be provided by the Secretary of Labor within 15 days.
The ability to use this new leave ends when the qualifying event ends. It does not carry over to the next year and is not payable upon termination.
The bill ensures employees who work under a multiemployer collective agreement and whose employers pay into a multiemployer plan are provided with leave.
Employers are required to post a notice informing employees of their expanded sick leave rights. This notice is scheduled to be published within seven days.
Leave will be in place through December 31, 2020.
The Families First Coronavirus Response Act also includes a temporary expansion of the Family and Medical Leave Act (FMLA) through December 31, 2020
The expanded FMLA leave entitlement only applies to employers with fewer than 500 employees. At the time of signing, the Act does not exempt businesses with fewer than 50 employees (those normally not subject to FMLA), but the Secretary of Labor has authority to issue regulations to provide an exemption. This will be an important follow up item for employers with under 50 employees.
The expanded FMLA is specifically intended for childcare-related issues and has pay implications significantly different from the regular FMLA:
Allows FMLA leave (up to 12 weeks) to be used for a qualifying need related to a public health emergency concerning Coronavirus, as declared by federal, state, or local authorities.
A “qualifying need” is limited to circumstances where the employee is unable to work or telework due to the need to care for a child under 18 if the child’s school or childcare is closed due to a Coronavirus-related public health emergency.
Employees are eligible for the leave if they have worked for the employer for at least 30 calendar days. Note that this is a considerably wider eligibility rule that existing FMLA.
The rules for when this Coronavirus-related FMLA leave is paid versus unpaid differ greatly from existing forms of FMLA leaves, all of which are unpaid:
o If an employee takes leave to care for a child due to a Coronavirus-related school closure, the first 10 days of the leave may be unpaid. The employee may elect (but may not be required) to use accrued vacation or sick leave during this time;
o After this first 10 days, the employer must provide PAID leave of no less than 2/3 of the employee’s regular rate of pay, capped at $200 per day and $10,000 aggregate.
An employee who uses this FMLA leave is entitled to reinstatement to the same or equivalent position UNLESS the employer has fewer than 25 employees, the position held by the employee at the time the leave started no longer exists due to economic conditions or other operating condition caused by the public health emergency, and the employer has tried to restore the employee to an equivalent position. If there is no position available, the employer still must make reasonable effort for one year to contact the employee if an equivalent position becomes available.
Employers of health care providers and emergency responders may elect to exclude such employees from the provisions of this law.
Payroll Tax Credits are available to employers that provide paid sick leave or paid family leave to employees for the specific Coronavirus-related purposes defined by the Act. Employers will be entitled to a payroll tax credit for each calendar quarter in an amount equal to 100% of the qualified paid sick leave wages paid by the employer in the quarter, and the amount of qualified family leave wages paid by the employer, not to exceed $200 per day and $10,000 aggregate per employee.
The Act also provides for $1 billion in 2020 for emergency grants to states for activities related to unemployment insurance benefits.
The Act requires private health plans, Medicare, Medicaid, CHIP, TRICARE, Coverage for Veterans and Coverage for Federal Civilians to provide coverage at no cost sharing for COVID-19 testing and additionally provides for reimbursement by the National Disaster Medical System to reimburse testing costs for uninsured individuals. American Indians and Alaskan Natives are also entitled to testing without cost sharing including when sent for care away from the tribal health care facility.
The information presented in this email is provided for informational purposes only and does not constitute as legal advice.