In response to the novel Coronavirus (COVID-19) pandemic, on March 14, 2020, Congress passed the Families First Coronavirus Response Act (the “Act”). This Act not only requires private health insurance companies and government-funded programs to provide free Coronavirus testing, it also includes employment-related provisions, which will likely impact employers. Specifically, the Act (1) amends the Family and Medical Leave Act (“FMLA”); (2) creates an Emergency Paid Sick Leave Act; and (3) provides certain reimbursements for employers.
If Enacted Into Law, How Would the Act Amend the FMLA?
If enacted into law, the Act, which would stay in effect until December 31, 2020 (unless renewed by Congress), would create a new type of leave under the FMLA for public health emergencies. Specifically, the Act would allow eligible employees to take FMLA leave for the following reasons:
Below are additional changes the Act would make to the FMLA, if enacted into law:
| Traditional FMLA | Amended FMLA | |
| Employer Coverage | · Private employers with 50 or more employees in 20 or more workweeks
· All public agencies and public and private elementary and secondary schools, regardless of the number of employees
|
All employers with fewer than 500 employees[1] |
| Eligible Employees | Any employee who:
· Works for a covered employer; · Has worked for the employer for at least 12 months; · Has worked at least 1,250 hours for the employer during the last 12 months; and · Works at a location where the employer has at least 50 employees within 75 miles |
Any employee (full-time or part-time who has worked for the employer for at least 30 calendar days |
| Paid or Unpaid Leave? | Unpaid | First 14 days of leave: unpaid[2]
After 14 days: paid at a rate of at least two-thirds of the employee’s regular rate of pay for the number of hours the employee would otherwise normally be scheduled to work |
| Definition of “Family Member” | Spouse, child[3], or parent[4] with a serious health condition | An individual who is:
(1) A pregnant woman, senior citizen, individual with a disability, or has access or functional needs; and (2) Who is a son or daughter of the employee, a next of kin of the employee or a person for whom the employee is next of kin, or a grandparent or grandchild of the employee |
| Job-Protected Leave? | Yes. | Yes.
Exception: employers with less than 25 employees may be exempted if the employee’s position does not exist anymore because of the public health emergency. |
What is the Emergency Paid Sick Leave Act?
If enacted, the Act would require employers to give employees paid sick leave, available for immediate use, for the following reasons:
The Emergency Paid Sick Leave Act is further summarized below.
| Effective Date | Effective until December 31, 2020 (if passed and unless renewed by Congress) |
| Employer Coverage | · Any private employer with fewer than 500 employees and
· Any government or public agency with at least 1 employee |
| Eligible Employees | All employees, regardless of length of employment |
| Amount of Leave Received | · Full-time employees: 80 hours
· Part-time employees: Number of hours equal to the average hours they work over a 2-week period |
| Leave Pay Rate | Leave to self-quarantine or to seek diagnosis or care: Employee must be paid his or her regular rate of pay
Leave to care for an afflicted family member or a child whose school has been closed: Employee must be paid at two-thirds his or her regular rate of pay |
| Is this emergency paid sick leave provided in addition to the employer’s existing paid leave policies? | Yes. Further, employers cannot change existing policies after the date of the Act to avoid these requirements. |
| Can an employee substitute this emergency paid sick leave for the new paid FMLA leave? | Yes. Employees can choose use this emergency sick leave to cover the first 14 days of unpaid FMLA leave for Coronavirus. |
| Can an employer require an employee to use other paid leave before using this emergency paid sick leave? | No. Employers must permit employees to use this emergency paid sick leave before using any other paid leave. |
What Reimbursements Are Available for Employers Under this Act?
The Act provides (1) tax credits to reimburse employers for the costs of the paid FMLA leave and emergency paid sick leave and (2) emergency grants for processing and paying unemployment insurance benefits and to provide immediate funding for staffing, technology, systems, and other administrative costs of state unemployment agencies. The tax credits are applicable to all employers covered by the Act (i.e. private employers with fewer than 500 employees and any government or public agency with at least one employee).
With respect to paid FMLA leave, the Act creates a payroll credit for required family leave, allowed against the employer’s portion of Social Security taxes. Further, the amount of the FMLA leave credit on a per-employee basis, is limited to $200 per day and $10,000 total for all calendar quarters. These tax credits would cover one year and could not be used in combination with the existing credits for employers that provide paid FMLA leave.
With respect to emergency paid sick leave, the Act creates a payroll credit for the paid sick leave. Specifically, the amount of the credit on a per-employee basis is limited to $511 per day for employees that self-isolate, have Coronavirus symptoms, or are ordered to stay home (in all other circumstances, the credit is limited to $200 per day). There is a two-week cap on this credit, after which the new FMLA tax credit would kick in.
What Does This Mean For Employers?
Should the Act be enacted into law, until December 31, 2020 (if not renewed), virtually all employers with less 500 employees will have to provide their employees with paid FMLA leave and emergency paid sick leave to combat the Coronavirus. Though this new paid leave requirements benefit those employees impacted by the Coronavirus, small business may be adversely affected. Luckily, to ease the financial burden, the Act provides reimbursement for the costs of the leaves by way of tax credits.
For more information on the Families First Coronavirus Response Act, please contact the attorneys at York Bowman Law, LLC.
[1] The Act permits the U.S. Department of Labor (“DOL”) to issue regulations for good cause that could exempt small business (i.e. fewer than 50 employees) if imposing the new regulations would “jeopardize the viability of the business as a going concern.”
[2] The employer has the discretion to substitute any available paid leave during this time.
[3] “Child” is defined as biological, adopted, or foster child, a stepchild, a legal ward, or a child of an employee standing in loco parentis (i.e. the employee puts himself or herself in the situation of a parent by assuming and discharging the obligations of a parent to a child).
[4] “Parent” is defined as the biological, adoptive, step, or foster parent of an employee or an individual who stood in loco parentis to the employee when the employee was a son or daughter. “Parent” does not include the employee’s parents-in-law.