What Employers Need to Know About the Families First Coronavirus Response Act

CLIENT ALERT

By: Liz Bailey and Karen Whitley

March 20, 2020

On March 18, 2020, President Trump signed into law the “Families First Coronavirus Response Act” (H.R. 6201) (“the Act”) after this legislation passed in the Senate.  The Act takes effect “not later than 15 days after its enactment,” or April 2, 2020.  The Act will expire on December 31, 2020.  The Act contains revisions to the legislation initially passed by the House of Representatives on March 14, 2020.

The Act contains two important obligations for many employers – (1) Emergency Paid Sick Leave, and (2) Public Health Emergency Leave under temporary expansions of the Family and Medical Leave Act (“FMLA”).  In summary, many employers will be required to offer up to 80 hours of Paid Sick Leave to full-time employees who are subject to quarantine, are self-quarantining, or have symptoms or a diagnosis of the coronavirus (COVID-19), with a pro-rated amount of leave for part-time employees.  Amounts are capped at $511 per day for an employee’s own health condition, or $200 per day if they are caring for someone else.  Additionally, unless the Department of Labor issues exceptions for smaller employers, the same employers who must provide sick leave must also offer Public Health Emergency Leave under the FMLA of up to $200 per day for up to 12 weeks (but 2 weeks potentially unpaid) if an employee is unable to work due to childcare or school closures caused by the COVID-19 outbreak.

We address each of these provisions below, but both the Paid Sick Leave and Public Health Emergency Leave under the expanded FMLA leave provisions of the Act:

• Apply to all private employers with fewer than 500 employees overall, and certain public employers.
• Allow an employer of an employee who is a healthcare provider or an emergency responder to elect to exclude the employee from these two provisions of the Act, subject to future regulations.
• Require employers to pay for the Paid Sick Time and Public Health Emergency Leave required by the Act, but they will receive a tax credit for doing so.
• Allow the U.S. Department of Labor to issue regulations to exempt small businesses (fewer than 50 employees) if the viability of the employer’s business as a going concern would be jeopardized if the employer provided the leave required under the Act.
• Provide that an employer to a multi-employer collective bargaining agreement may fulfill the employer’s obligations, consistent with its bargaining obligations and the CBA, by making contributions to a multi-employer fund, plan or program based on the paid leave available to each of its employees working under the multi-employer CBA. The fund, plan or program must enable employees to receive pay for the FMLA leave.

Employers’ Obligations Concerning Emergency Paid Sick Leave

Paid Sick Leave applies to all employers with fewer than 500 employees.  Under the Act’s Paid Sick Leave requirements, employers must (beginning on April 2) make 80 hours of Paid Sick Leave available for full-time employees.  For part-time employees, employers must make Paid Sick Leave available in an amount which is the equivalent of the part-time employee’s average number of hours over two weeks.

An employer must provide this Paid Sick Leave for the following reasons:

1. The employee is subject to a COVID-19 related federal, state, or local quarantine or isolation order.
2. The employee’s healthcare provider has advised the employee to self-quarantine due to COVID-19 related concerns.
3. The employee experiences COVID-19 symptoms and is seeking a medical diagnosis.
4. The employee is caring for a person who is subject to a federal, state or local quarantine or isolation order, or who has been advised by his/her healthcare provider to self-quarantine due to concerns related to COVID-19.
5. The employee is caring for the employee’s son or daughter (as those terms are defined in the FMLA) if the son or daughter’s school/place of care has been closed, or the son/daughter’s child care provider is unavailable, due to COVID-19 precautions.
6. The employee is experiencing any substantially similar condition that has been specified by the U.S. Secretary of Health and Human Services.

This Paid Sick Leave is available immediately, and no accrual rates or accrual waiting periods apply. Employers may not require employees to use other types of paid leave that the employer provides (such as sick leave or PTO) before the employee uses Paid Sick Leave pursuant to the Act. Also, an employer may not require the employee who needs Paid Sick Leave to find a replacement worker when the employee takes such leave.

The following pay considerations apply to Paid Sick Leave under the Act:

• Paid Sick Leave is to be paid at the employee’s regular rate.
• There are caps of $511 per day and $5,110 in the aggregate for the types of leaves outlined in Nos. 1, 2 and 3 above.
• There are caps of $200 per day and $2,000 in the aggregate for the types of leaves outlined in Nos. 4, 5 and 6 above.
• Because this leave is expected to sunset at the end of 2020, unused Paid Sick Leave does not carry over to the next calendar year.
• Employers are not required to pay unused Paid Sick Leave if an employee separates from employment with the employer.

After the first workday (or a portion of the first workday) that an employee receives Paid Sick Leave under the Act, the employer may require the employee to follow reasonable notice procedures in order for the employee to continue to receive Paid Sick Leave.

Employers’ Obligations Concerning Public Health Emergency Leave

The Act also amends the FMLA to include additional protections related to an employee’s inability to work as a result of the COVID-19 public health emergency.  In contrast to the existing forms of FMLA leave which require an employee to have been employed for 12 months, this Public Health Emergency Leave is available to all employees who have been employed for at least 30 calendar days.

Under this FMLA expansion, an employee may take Public Health Emergency Leave to care for the employee’s son or daughter (who is under 18 years of age) if the child’s elementary school, secondary school or place of care has been closed, or if the childcare provider is unavailable, due to a defined “public health emergency” and the employee is unable to work or work remotely/telework.  For purposes of the Act, a “public health emergency” is an emergency declared by a federal, state or local authority regarding COVID-19.  An employee who needs to take Public Health Emergency Leave must provide the employer with notice of leave “as is practicable.”

When Public Health Emergency Leave is needed due to these school/day care closure provisions, the following employee pay requirements apply:

• The employer may provide the first 10 days of this leave as unpaid leave, and then subsequent absences for this reason may be paid at 2/3 of the employee’s “regular rate of pay.” Please note that “regular rate of pay” has its own legal meaning under wage and hour law, and it may include, as applicable, more than the employee’s hourly base wage.
• There is a cap of $200 per day and $10,000 in the aggregate.
• If the first 10 days are unpaid, then the employee may decide to substitute any accrued vacation leave, personal leave, or medical/sick leave for the unpaid time.

Job Protection Considerations

The Act affords employees job protection. However, the FMLA’s existing requirement that an employee must be restored to the same or an equivalent job position after FMLA leave does not apply if an employer has fewer than 25 employees and if the employee’s position no longer exists due to economic conditions or other operational changes which both affect employment and are caused by the public health crisis during the leave period.  In that case, however, the employer  must make reasonable efforts to restore an employee to the same or equivalent position.  If these reasonable efforts are unsuccessful, the employer must attempt to contact and reinstate the employee if an equivalent position becomes available in a one-year period.  This one-year period begins on the earlier of either (1) the date on which the qualifying need related to a public health emergency concludes; or (2) the date which is 12 weeks after the date on which the employee’s leave started. This new requirement to make “reasonable efforts” to reinstate affected employees for up to one year does not apply to employers with more than 25 employees.

The Act expressly prohibits retaliation.  An employer cannot discharge, discipline or discriminate against any employee who takes Paid Sick Leave or Public Health Emergency Leave or who engages in other protected activity relating to the leaves required under the Act.

The Secretary of Labor will issue a poster, within the next 7 days, outlining these requirements.

An employer who violates the Act will be deemed to have violated the Fair Labor Standards Act, and will be subject to penalties for failure to pay minimum wages.

The legal landscape related to the COVID-19 pandemic continues to evolve rapidly.  Employers await regulations from the U.S. Department of Labor, as well as a Notice form.  Our COVID-19 Response Team remains ready to help employers as they navigate these new and developing legal requirements.