Emergency Legislation: Families First Coronavirus Response Act

What it is: Emergency FMLA and sick leave legislation designed to protect employees and employers affected by COVID-19.

When it takes effect: by April 2, 2020.

What you need to know: For many employers, you may be responsible for providing your employees with additional benefits, including paid leave related to COVID-19.

The Big Picture

On March 18, 2020, Congress passed and the President signed the Families First Coronavirus Response Act in response to the coronavirus (COVID-19) outbreak.

At a high level, this new emergency law (1) extends and expands the protections of job-protected leave under the federal Family Medical Leave Act for certain coronavirus-related absences, including requiring paid FMLA leave benefits; (2) provides a new paid sick leave entitlement for certain absences related to school closures; and (3) provides tax credits to help employers offset the costs of these paid leave benefits.

The law will affect employers with fewer than 500 employees.  Some employers with 50 or fewer employees may be able to get an exemption from the law.

The law will go into effect by April 2, 2020 and remains in effect through December 31, 2020.  Employers have a short window to comply.

Which employers are covered under the law?

• Employers with fewer than 500 employees (company-wide)
• • The FMLA’s minimum requirement of 50 employees does not apply, but employers with fewer than 50 employees may be excused from complying with certain provisions of the law if complying would jeopardize the viability of the business.
• Certain public employers.
• Employers may exclude employees who are healthcare providers and emergency responders.

Who is eligible for these benefits?

• For FMLA protections, employees working for at least 30 days for a covered employer. This includes part-time employees.
• The paid sick leave requirements apply to all employees of a covered employer.

How are the FMLA leave protections expanded?

• Eligible employees who are unable to work (or telework) may take job-protected FMLA leave to care for a child (under 18 years old) if the child’s school or place of care has been closed, or the childcare provider is unavailable, due to a declared public health emergency related to COVID-19. Employees are entitled to take a 12-week leave in total.

How much COVID-19 paid sick leave must be provided to employees?

• All full-time employees (subject to limited exceptions) regardless of their length of employment are entitled to take 80 hours paid sick leave immediately.
• Part-time employees are entitled to pay for a number of hours equal to the number of hours that such employees work, on average, over a two-week period.
• These new sick leave amounts are in addition to—and not in lieu of—any other employer-provided paid sick leave benefits.
• Employers must allow employees to use COVID-19-related sick leave before other paid leave.
• Employers do not have to pay unused COVID-19 paid sick leave if an employee separates from employment.

Who pays for the paid leave?

• Employers pay for the paid leave, but they will receive a tax credit equal to 100 percent of qualified paid leave benefits paid by an employer subject to certain limitations.  Employers should consult with their tax advisors regarding the tax effect.

Under what circumstances can employees use COVID-19 paid sick leave?

• Employees may use this sick leave if:

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 healthcare 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 their son or daughter if the school or place of care of the son or daughter has been closed, or the childcare provider of the 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.

• Employees may not be required to find a replacement worker when they take COVID-19 sick leave.

Amount of Pay

• When employees take sick leave, employers are required to pay employees

• • at the employees’ regular rate of pay during the sick leave period regarding their own COVID-19-needed leave; the pay is capped at $511 per day and $5,110 in the aggregate (See paragraph (1), (2) and (3) above), and
  • at two-thirds of their regular rate of pay if they are taking leave to care for a family member or because of school closure or childcare-related issues; the pay is capped at $200 per day and $2,000 in the aggregate (See paragraph (4), (5) and (6) above).

• Under the FMLA provisions, when leave is needed due to a school or day care closure,

• • the first 10 days of FMLA leave is unpaid, but employees may elect to substitute accrued vacation, personal leave, or sick leave for leave under this section.  An employer may not require such substitution.
  • After the 10 days are exhausted, employers must pay the employee at least two-thirds of an employee’s regular rate of pay for each additional day of FMLA leave, up to 12 weeks in total. The benefit is capped at $200 per day or $10,000 in the aggregate.

Is the leave job-protected?

• Yes, with an exception for employers with fewer than 25 employees:
  • the FMLA’s requirement that an employee be restored to the same or equivalent position after leave does not apply if the employee’s position no longer exists due to economic conditions or other changes in the employer’s operations that affect employment and are caused by the public health crisis during the period of leave.
  • The employer has to make reasonable efforts to restore the employee to the same or an equivalent position, and if the reasonable efforts fail, the employer has to make efforts to contact the employee and reinstate the employee if an equivalent position becomes available within a one-year period beginning on the earlier of (a) the date on which the qualifying need related to a public health emergency concludes, or (b) the date that is 12 weeks after the date the employee’s leave started.

Notice requirements

• Employers must post a notice related to this section in a conspicuous place in the workplace.  A model notice will be provided by the Department of Labor within seven days of enactment of this bill.

What should employers be doing?

• Employers should consider, among other things,
  • Reviewing their existing paid leave policies and benefits and potentially adjusting as appropriate to comply with the law and support the needs of their employees and business;
  • Consider potential fluctuations in staffing levels in anticipation of employees taking advantage of these leave entitlements this calendar year; and
  • Preparing to account for the new paid FMLA and sick leave entitlements from a financial/accounting perspective.

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