Employer’s Guide to the Families First Coronavirus Response Act

E-mployment Alert

Congress has passed the Families First Coronavirus Response Act and it has been signed by President Trump. The new law is effective on April 2, 2020 . There are two provisions that provide paid sick leave to employees who are forced to miss work due to the COVID-19 outbreak: (a) the Public Health Emergency Paid Sick Leave, and (b) the Emergency FMLA Expansion.

Both the paid FMLA and paid sick leave provisions apply only to private employers with fewer than 500 employees (as well as most public employers).

The Emergency Paid Sick Leave Act

1. Which employees are eligible for paid sick leave?

The new law requires employers to provide paid sick time to an employee who is unable to work (or telework) because of one 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 is seeking a medical diagnosis.
  4. The employee is caring for an individual who is subject to a quarantine or isolation order or has been advised by a health care provider to self-quarantine.

    Comment: The prior versions of the bill made sick pay available to employees to care for a family member who is subject to an isolation order or who is advised to self-quarantine. The law as enacted significantly broadened this coverage to apply to an “ individual,” rather than a family member.
  5. The employee is caring for a son or daughter because the child’s school or place of care has been closed or the child’s childcare is unavailable due to COVID-19 precautions.
  6. The employee is experiencing any other substantially similar condition specified by the Secretary of the HHS in consultation with the Secretary of the Treasury and the Secretary of Labor.

Unlike the emergency FMLA leave described below, an eligible employee is immediately entitled to the paid sick leave, and there is no length of employment requirement.

Comment: This is not an automatic grant of paid sick time to all employees. In order to be entitled to sick pay, the employee must fall into one of the six categories described above, and the sick pay is paid only for the period of time that the qualifying reason continues. In addition, it appears that this is a one-time use of leave – once the employee returns to work from leave, no further sick leave is required.

Employers of health care providers or emergency responders may elect not to provide this leave to employees.

2. How much paid sick leave am I required to allow?

Full-time employees are entitled to a total of 80 hours of paid sick time; part-time employees are entitled to pay for the average hours they work over a two-week period.

This sick leave does not accrue or carryover from year to year, and it is not paid out at the termination of employment.

Comment: This is a separate and additional grant of paid sick leave, in addition to any existing sick leave policies of the employer. If other paid leave from the employer is available, the employee may opt to use the Emergency Paid Leave and the employer may not require the employee to use the other paid leave first.

3. How much do employees get paid while they are on this sick leave?

  • If the employee takes time off for their own self-care – items a-c of the qualifying reasons above – they are to be paid up to 80 hours at their regular rate of pay. There is a cap of $511/day, or $5,110 in the aggregate for these individuals.
  • If the employee takes time off to care for a quarantined individual, or a child whose school or daycare is closed or unavailable – items d and e of the qualifying reasons above – the employee must be compensated at 2/3 of their regular rate of pay. The cap for these individuals is $200/day, or $2,000 in the aggregate.

4. What if I don’t want to comply?

  • Employers are not allowed to discriminate or retaliate against those who take the emergency paid sick leave. An employer who fails to provide the required paid sick time, or who terminates an employee for discriminatory reasons, is subject to the penalties set forth in the Fair Labor Standards Act, which include back pay, double damages, and attorney fees. In addition, but not commonly, fines of up to $10,000 and/or imprisonment for up to 6 months are possible.

Emergency Family and Medical Leave Expansion Act (the “E-FMLA”)

1. What is this?

The E-FMLA Act expands the protections of the FMLA, on a temporary basis, to include a public health emergency leave (i.e., coronavirus).

2. Who is covered?

All employers with fewer than 500 employees must provide this leave.

3. Who can take E-FMLA leave?

  • Employees who are unable to work (or telework) because they need leave in order to care for (a) the employee’s son or daughter who is under age 18, (b) because the child’s school or place of care has been closed, or their childcare provider is unavailable.
  • An employee is eligible to take the leave if they have been employed for at least 30 days. (As with paid sick leave, employers of health care providers or emergency responders may exempt those employees from coverage.)

Comment: This new FMLA is only available to care for the employee’s children in the circumstances outlined above. Unlike prior versions, this is now the only qualifying reason for E-FMLA leave and pay.

The FMLA generally requires covered employers to provide 12 weeks ofunpaid leave for, among other reasons, (a) providing care for a family member who has a serious health condition, or (b) for a serious health condition that renders the employee unable to perform their job. This FMLA leave may still be available in the coronavirus setting, if the underlying reason for the absence qualifies under the FMLA, such as where the employee may be affected with COVID-19 or has to care with an infected family member, and the illness meets the criteria of a “serious health condition.”

Under the FMLA, a regimen of continuing treatment that includes over-the-counter medications, bed rest, etc. is usually not itself sufficient to constitute a serious health condition. This would apply to most flus, colds, and viruses. However, given the uncertainty surrounding the COVID-19 virus, employers would be well-advised to err on the side of treating COVID-19 absences as serious health conditions.

Regardless, no pay is required for this normal FMLA leave, as the E-FMLA mandate does not apply to regular FMLA leave, even for an illness of the employee or a family member .

4. Do I have to pay employees who take E-FMLA?

The Act provides for both paid and unpaid leave:

  • The first 10 days of E-FMLA leave may be unpaid. However, an employee may elect to use any accrued paid time off (vacation, sick, personal, PTO, etc.) available under the employer’s general policies to cover pay during this leave (but an employer is not permitted to require an employee to do so). In addition, employees may choose to be paid for the 10 days under the Emergency Paid Sick Time Act; and
  • After 10 days, the employer must provide paid leave for additional leave days at the rate of at least 2/3 of the employee’s regular pay, for the number of hours the employee would otherwise have worked.

The cap for E-FMLA pay to employees is $200/day and $10,000 in the aggregate.

Comment: After the first 10 days has elapsed, the law requires that any additional leave for school/child care closure, up to the 12-week entitlement under the FMLA, must be paid leave.

5. Can I require employees to take or exhaust any paid leave provided by the Company’s policies before receiving E-FMLA leave pay?

No. An employee can opt to substitute accrued paid leave to cover some or all of the unpaid portion, but an employer cannot force the employee to do so.

Comment: This is contrary to the FMLA generally, where employers may require employees to substitute paid leave.

6. Do I have to return the employee to their job after they take E-FMLA leave?

Yes. The standard job restoration requirements of the FMLA apply to all employers who employ 25 or more employees. If the job or no equivalent positions are available, the employer must offer an equivalent position to the employee if one becomes available in the next year. For employers with less than 25 employees, job restoration is not required if (a) the position held by the employee no longer exists, (b) because of economic or operating conditions caused by the public health emergency during the time of the employee’s leave.

7. Are there any notice requirements for employees?

Where the need for E-FMLA leave is foreseeable, the employee must provide as much notice as is practicable (rather than the 30-day notice requirement for the FMLA generally).

8. How long does this continue?

The E-FMLA provisions end on December 31, 2020.

9. What is the risk if I do not comply with the E-FMLA requirements?

Most employers who violate the E-FMLA requirements can be held liable to affected employees for FMLA penalties. However, unlike normal FMLA enforcement, employers with fewer than 50 employees cannot be sued by an employee for violations of the E-FMLA Act, but they may be subject to administrative enforcement or suit by the Secretary of Labor.

Additional Questions

1. Can you give me an example how this paid leave works?

Sure. Suppose you employ a single mom with school children and she asks for leave after the school closes for the remainder of the school year. She would fit the narrow class of employees eligible for E-FMLA leave. The first 10 days (usually 80 hours) of her leave would be unpaid. However, she could elect to use any accrued paid time from your Company policies and, because she meets criterion (e) for eligibility for paid sick leave she could elect to be paid for 80 hours under the Emergency Paid Sick Leave Act.

On the other hand, suppose that you have an employee on leave because they have been advised to self-quarantine. That employee would be entitled to 80 hours of paid sick leave [under criterion (a)], but they would not be entitled to any E-FMLA leave or pay because they are not an eligible employee under that Act.

2. Do I have to do any postings on this?

Yes. The notice and employer-designation requirements of the FMLA apply. Employers will be required to post a notice prepared by the Secretary of Labor, which describes the new law’s requirements.

3. I heard about a possible exemption for small employers – what is that?

We’re not sure yet.  The Act empowers the Secretary of Labor to exempt small businesses, those with fewer than 50 employees, if the required leave would “jeopardize the viability” of their business. The Secretary has said that Regulations will be issued by the date the new law takes effect.

4. Will there be any tax credits for what I have to pay in paid sick time?

The Act provides for a payroll tax credit equal to 100% of the required Paid Sick Leave, up to the cap of $511/day for leave taken for the employee’s own personal needs, and $200/day for leave to care for a family member because of school closure or childcare unavailability. In addition, the Act provides for a payroll tax credit equal to 100% of the required paid E-FMLA leave, up to $200/day or an annual aggregate of $10,000.

The tax credits are available only to employers who are required to provide the benefits called for by the new law.

5. What is the time period that these two new laws will be in effect?

Both of the new laws are effective on April 2, 2020, and they both “sunset” or expire on December 31, 2020.