Yesterday the U.S. Senate overwhelmingly passed the Families First Coronavirus Response Act, H.R. 6201, which the U.S. House of Representatives had passed in a bipartisan vote on March 14 (with further changes made by the House by unanimous consent on March 16). President Trump signed the bill shortly after it cleared Congress. Now that the legislation has been signed into law, its provisions become effective within 15 days.
There are a couple specific changes since our last post:
Unpaid leave under the FMLA portion was shortened from 14 days to 10 days;
Emergency Sick Leave has a much more stringent list of qualifying events;
Health Care Providers and First Responders may be excluded.
Also of note, employers will have to post a notice containing information regarding the emergency sick leave provisions; the Labor Department is to create a model notice no later than 7 days after the Act was enacted. Let's take a look at the specifics:
Coverage and Effective Dates
Covered Employees and Employers: For purposes of this leave, H.R. 6201, or the Families First Coronavirus Response Act ("The Act") amends the FMLA definitions of covered employees and employers. Under The Act, eligible employees include those who work for employers with fewer than 500 employees and government employers who have been on the job for at least 30 days. The legislation further gives the Secretary of Labor the authority to exempt small businesses with fewer than 50 employees from the bill’s paid leave requirements if those requirements would jeopardize the viability of the business.
Exception for Health Care Providers and Emergency Responders: Employers who are health care providers or emergency responders may elect to exclude their employees from the public health emergency leave provisions of the bill.
Effective Date and Expiration: The requirements set forth under the act are in effect 15 days after the enactment of the legislation through December 31, 2020.
Expansion of FMLA Leave
The Act amends the Family and Medical Leave Act (“FMLA”) to provide for as many of 12 weeks of job-protected leave for employees who are unable to work (or telework) because they must:
Care for a son or daughter under 18 years old if the school or place of care for the child has been closed, or the child care provider of such son or daughter is unavailable, due to a public health emergency. (Earlier versions of the Act provided for additional qualifying situations and did not provide for telework).
Employee Eligibility: An employee who has been employed for at least 30 calendar days. Note that this is a much lower threshold than the 12 month/1,250 hour tenure requirement that otherwise applies to FMLA leave.
Job Restoration: The FMLA’s job restoration requirements generally apply, with limited flexibility for employers with fewer than 25 employees.
Paid Leave Requirement: Unlike FMLA leave under the 1992 Act, leave lasting longer than 10 days must be paid at two-thirds an employee’s regular rate of pay. In more detail:
The first 10 days of leave may be unpaid. During this unpaid 10 day period, an employee may elect, but cannot be required, to substitute any accrued vacation leave, personal leave, or medical or sick leave for the unpaid leave. After 10 days of leave have been taken, the employer must provide paid leave. Paid leave must be an amount that is not less than two-thirds an employee’s regular rate of pay for the number of hours the employee would otherwise be normally scheduled to work; provided, however, that such paid leave is capped at $200/day. Paid leave must continue until the qualifying condition no longer exists, or after twelve weeks of leave have been taken. Finally, there is a $10,000 cap on the aggregate amount of paid leave paid to an employee.
Emergency Sick Leave
Complementing the FMLA amendment, the Act requires emergency sick leave for employees who cannot work for any of the following reasons:
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 either (1) subject to a Federal, State, or local quarantine or isolation order related to COVID-19 or (2) has been advised by a health care provider to self-quarantine due to concerns related to COVID-19;
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.
Employee Eligibility: The full allotment of paid sick time provided for by the Act must be available for immediate use by an employee, regardless of how long the employee has been employed by the employer.
Allotment of Sick Leave: For full-time employees, 80 hours. For part-time hours, emergency sick leave is the number of hours an employee works, on average, over a 2-week period.
No Carryover: Emergency paid sick time provided by the Act does not carry over from one year to the next.
No Payout at Termination: Paid sick time not used at the time of an employee’s termination, resignation, or retirement does not need to be paid out to the employee.
May be Used Before Other Paid Leave: Employers may not require an employee to use other paid leave provided by the employer to the employee before the employee uses paid sick time provided for by the Act.
Pay Rate: Paid sick leave must be paid as follows:
At the employee’s regular rate, subject to a maximum of $511 per day and $5,110 in the aggregate for qualifying conditions (A), (B), or (C) described above.At two-thirds the employee’s regular rate, subject to a maximum of $200 per day and $2,000 in the aggregate for qualifying conditions (D), (E), or (F) described above.
Unemployment Insurance: The bill provides for the Secretary of Labor to make emergency administration grants to states in the Unemployment Trust Fund. States are directed to demonstrate steps toward easing eligibility requirements and expand access to unemployment compensation for claimants directly impacted by COVID-19. The legislation also appropriates funds for states that aim to establish work-sharing programs that permit employers to reduce employee hours rather than laying them off. Under such programs, employees would receive partial unemployment benefits to offset the wage loss.
Tax Credits
To help offset the cost of paid leave, the Act provides for credits against quarterly payroll taxes imposed on the employer in an amount equal to 100 percent of the qualified family leave wages and paid sick leave wages paid by an employer, subject to the requirements of forthcoming Treasury Department regulations.
Conclusion
These are trying times for everyone and employers are having to deal with difficult decisions. We hope this information provides you with some guidance and we navigate through together. Nothing in this post should be construed as legal advice. If you have any questions or concerns, please contact your legal counsel or contact HAI at jiosue@harvlaw.com.