To address the Coronavirus emergency, on March 18, 2020, president trump signed into law the Families First Coronavirus Response Act.  The act makes 2 primary changes to existing law:  It expands rights already existing under the federal Family and Medical Leave Act (FMLA); and, establishes the first ever federal right to paid sick leave. The Act takes effect on April 12, 2020.

 

EMERGENCY FAMILY AND MEDICAL LEAVE ACT (EFMLA)

The original FMLA provided the following:

Eligible Employees of covered employers (defined as employers with over 50 employees in a 75-mile radius) can take unpaid, job-protected leave for specified family and medical reasons, with continuation of group health insurance coverage, under the same terms and conditions, as if the employee had not taken leave.

An Eligible Employee is anyone who had worked for the same employer for a 12 month minimum period, during which time they had worked a minimum of 1250 hour.

Such employees would receive 12 workweeks of leave in a 12-month period for:

• the birth of a child and to care for the new-born child within one year of birth;
• the placement with the employee of a child for adoption or foster care and to care for the newly placed child within one year of placement;
• to care for the employee’s spouse, child, or parent who has a serious health condition; or,
• a serious health condition that makes the employee unable to perform the essential functions of his or her job;

 

The EFMLA makes key changes to the FMLA, effective through December 31, 2020:

• Amends the definition of “Eligible Employee” to anyone who has been employed by an employer for at least 30 days.
• Changes the definition of “Covered Employer” from “50 or more employees” to “fewer than 500 employees.” No mile radius is included.
• Provides leave to care for a minor child of an employee if the school or place of care has been closed, or if the care provider of such child is unavailable due to coronavirus precautions. Care for family members other than children is not included in the act, but can be included in sick leave provisions, discussed below.
• Defines an “inability to work” during a childcare-related leave to include an inability to telework.

 

Additional provisions of EFMLA include:

• Leave after the first 10 days of any coronavirus-related family leave is to be paid in an amount that is not less than two-thirds of an employee’s regular rate of pay for the number of hours the employee would have worked. Those first 10 days can be paid with sick leave, but employee can also use accrued vacation/personal days as well.
• There are available exemptions for health-care workers and small employers (less than 50 employees where EFMLA payment would jeopardize viability of the business – discussed further below).
• Caps the amount of paid EFMLA at $200 per day, or $10,000 in the aggregate.
• Requires job restoration following any such leave for any employee of an employer with 25 or more employees.
• Discrimination and retaliation are prohibited. That is, employers must not withhold, alter, grant or otherwise administer rights and duties under FFCRA with any discriminatory purpose and may not take any retaliatory action toward am employee for availing themselves of rights under FFCRA.

 

Small Company Exemptions:

Employers with less than 25 employees don’t have to provide job protection if:

• The employee’s position no longer exists following the EFMLA leave, due to an economic downturn;
• The employee’s position no longer exists following the EFMLA leave, due to other circumstances caused by a public health emergency during the period of emergency FMLA.

With regard to employers who employ between 25 and 50 employees, the following applies:

• The US Secretary of Labor may exempt small businesses with fewer than 50 employees when the imposition of such requirements would jeopardize the viability of the business “as a going concern”.

 

PAID SICK LEAVE (PSL)

Aside from EFMLA, the government created the first ever federal paid sick leave law, designed exclusively to deal with Coronavirus.

The act provides 80 hours of paid sick leave for full-time employees (or pro-rata for part-time employees) who are unable to work or telework for the following reasons:

• The employee is subject to a federal, state or local quarantine or isolation order;
• The employee is experiencing symptoms of coronavirus and seeking a medical diagnosis;
• The employee is caring for an individual who is quarantined or self-isolating because of coronavirus concerns;
• The employee is caring for a child whose school or place of care has been closed, or the care provider is unavailable due to coronavirus precautions; or,
• The employee is experiencing any other substantially similar condition specifies by Secretary of Health and Human Services.

Payment amounts for sick leave depend upon certain particulars of the employee’s absence form work:

• For employees who are absent for the first 2 reasons listed above (quarantine/isolation, employee symptoms):
  • Payment caps out a $511/day or $5,110 in the aggregate.
• For employees who are absent for the last 3 reasons listed above (caring for another, caring for a child, suffering a similar condition):
  • Payment caps out at $200/day and $2000 in the aggregate.
• Part-time workers pay based on average weekly hours for 2 weeks

 

Additional provisions of the new sick leave act include:

• If an employer already offers paid sick leave to its employees, coronavirus paid sick leave must be in addition to the already-existing leave.
• An employer cannot force employees to use other Paid Time Off leave before receiving these sick leave benefits.
• While an employer can theoretically amend its sick leave policy to avoid offering additional leave, this maybe a dangerous course of action and should be done only with prior expert legal advice.
• There are two basic exemptions to the act: Health care workers and employers with under 50 employees, the latter of which can apply to the US Secretary of Labor to seek relief where complying with the law would threaten the viability of the business.
• Discrimination and retaliation are prohibited.
• Posting: Employers must post the notices of this Act in a conspicuous place. Model notices will be provided by the Secretary of Labor.

 

REIMBURSEMENT FOR FFCRA PAYMENTS BY EMPLOYERS:

Employer payments to employees pursuant to FFCRA are reimbursed to employers through tax credits the employer can take from payroll taxes.  While it’s not entirely clear yet, it appears that if PSL or EFMLA payments by employers are greater than the EFMLA or PSL payments to employees, the federal government will reimburse the employer via direct payment.

 

LIMITATIONS OF THE ACT:

Because they’re mostly paid for by tax credits, small businesses have to apply to the IRS to get a credit, or a refund if the employee’s tax bill is not large enough to cover the PSL and EFML.  Businesses dependent on cash flow may therefore be placed in a difficult position, unless they have under 50 employees and can apply for exemption.

 

ADDITIONAL POINTS

Employers should inquire about state and local laws that may require employers to provide paid or unpaid leave to employees with children in the event of an unexpected school closure.

Be sure to remain compliant with any applicable state or city and local laws governing sick leave. The following states already provide some form of paid and/or unpaid sick leave:  Arizona, California, Connecticut, D.C., Maryland, Massachusetts, Michigan, Nevada, New Jersey, Oregon, Rhode Island, Vermont, Washington.

FINALLY, BE CAREFUL TO NOT TERMINATE, LAYOFF OR FURLOUGH ANY EMPLOYEES PRIOR TO EFFECTIVE DATE OF 2 APRIL IN AN ATTEMPT TO ESCAPE THESE LAWS.  THE LAWS ARE SILENT ON THIS TOPIC, SO YOU MAY HAVE AN UPHILL BATTLE TO DEFEND SUCH ACTION. CONSULT LEGAL ADVICE BEFORE TAKING ANY SUCH ACTION.